NerdWallet's Smart Money Podcast - Increase Your Income with Practical Tips for Salary and Career Growth

Episode Date: July 11, 2024

Discover career growth strategies to boost your income, including negotiating raises, and navigating promotions and mentorship. What are some of the best ways to increase your income?  What are strategies for negotiating a higher salary and excelling in your current role?  Hosts Sean Pyles and Alana Benson discuss career growth techniques and salary negotiation strategies to help you understand how to maximize your earnings and achieve financial stability. They begin with a discussion of the importance of increasing your income rather than solely focusing on cutting expenses, breaking down the long-term financial difference that seemingly small increases in your income can make over the course of your career.  Then, “The Job Doctor” Tessa White joins Alana to discuss how to excel in your current role and position yourself for promotions and raises within an organization. They discuss the necessity of understanding the true expectations of your role, measuring your contributions through tangible metrics and effectively communicating your value to your organization. Additionally, they explore the importance of informal mentorship and how to enhance your skills by observing and learning from those who excel in specific areas. In their conversation, the Nerds discuss: career strategies, income potential, salary negotiation, financial stability, career growth, job market, financial future, career success, career advancement, career coaches, raise negotiations, job offers, informal mentorship, skill enhancement, job promotion, financial goals, earnings increase, career metrics, value proposition, workplace visibility, career mentors, market value, career coach, industry experience, job stability, promotion strategies, income jump, salary bump, corporate growth, financial planning, income investment, and company red zones. To send the Nerds your money questions, call or text the Nerd hotline at 901-730-6373 or email [e-mail]. Like what you hear? Please leave us a review and tell a friend.

You've heard it 1 million times. Just cut out the daily Starbucks run and you'll be rich. But more often than not, your financial situation is going to be better aided by fixing what's coming into your budget versus what's going out. If you're, say, 35 years old and you negotiate an extra $5,000 for your job, it's not just $5,000 because in lifetime earnings, that's several hundred thousand dollars in lifetime earnings. And's several hundred thousand dollars in lifetime earnings. And if you invested that difference, it's even more.

Welcome to NerdWallet's Smart Money Podcast. I'm Sean Piles. And I'm Alana Benson. This episode kicks off our nerdy deep dive into what we're calling investing in your income. Another way to say that is investing in yourself by seeking out more ways to make more money. Yeah, Sean, you alluded to this at the beginning, but there's just so much advice out there

giving people flack for spending on like straight up normal stuff, like going to Starbucks or like getting some tacos at a food truck instead of making them in your kitchen. And like, yes, technically all of these things can have a negative impact on your bottom line. But like you have to live. Absolutely. And I mean, we've had a foot in this camp on the show,

advising people to take a hard look at their expenses and see what they can pare back in an effort to get themselves to a better financial situation. We haven't told people to forego a morning latte, but there certainly is a time and place for examining your spending habits. That said, there is another way to affect that bottom line. Exactly. And that is to just make more money. Yes. Okay. So Alana, you pitched this series to us. What prompted you to start thinking about this? I've talked about this on here before, but before I started working at NerdWallet, I worked at a small company where I was making less than $30,000 a year with no benefits. So I actually tried to negotiate to $32,500. And I was told that I was greedy and selfish.

Wow. The gall you must have had. I know. How dare I? To ask for that much more money. Yeah. But it messed me up for like a long time. And to any listeners who have been told something similar, I want to tell you right now that you are not any of those things. I had to check my bank account like every time before I went grocery shopping at that job. And I felt stressed about money all the time. And then when I finally started working at NerdWallet, overnight, I went from that stressed out lifestyle to being able to save for retirement and a down payment on a house, which was just like a fever dream before then. And then it was a reality. Right. Well, we wish everyone could work for NerdWallet. But for those who are looking for other ways to have that kind of income jump, let's talk about what they need to be considering. Yeah, Sean. And this is not to say that this is easy. These are a little more difficult.

They may not happen overnight. But there are some really critical factors that make increasing your income almost imperative if you want to meet particular financial goals. If that's buying a house, if you're making a college fund, investing for retirement, these are all the things that you usually do after you fill out your emergency fund or you pay down high interest debt and cover your day-to-day expenses. And by those metrics, it just makes it really hard for a lot of people to ever get to the point where they can afford to save and invest for those long-term goals. And for a lot of folks, increasing their income is literally the only way they're going to be able to afford to invest for retirement. Right. And increasing your income can also be far more effective than reducing expenses, particularly for those who don't have many expenses left to cut. Yeah, exactly. So here's

an example. If you're making $50,000 a year, the money you actually get on your paycheck after taxes, and generally this is without state taxes and everyone's tax situation is different, but that would come to about $42,000 a year or $3,495 per month. The average monthly mortgage payment in the US is $1,768. Now factor in groceries, bills, car payments, and other necessities, and the truth becomes something that we already know, which is just that life is really expensive and most of us are not making enough to cut it, let alone save for the future or just like, you know, make enough to enjoy life and take a vacation every now and then. Yeah, and the average millennial owes about $6,500 in credit card debt and those in Gen Z owe more than $3,000. Cutting your daily coffee habit and getting rid of streaming services simply cannot make up the differences here. And these

numbers aren't new, but they're sometimes presented with little information about what we can do about them. Increasing your income is one of the biggest ways you can make a dent in those numbers. Exactly. So over this three-part series, we're going to talk about how you can get started increasing your income, some concrete steps you can take regardless of whether you want to change jobs or not, and what you can start to do once your income does increase. We'll be talking about everything from sprucing up your LinkedIn profile to working with a career coach, negotiating, and whether that's for a raise at your current job or a salary bump at a new one. All right, well, we want to hear what you think too, listeners. To share your thoughts around ways to boost your income, leave us a voicemail or text

the Nerd Hotline at 901-730-6373. That's 901-730-NERD or email a voice memo to podcast at nerdwallet.com. So Alana, who are we hearing from today? We are going to the doctor for a checkup, Sean. Oh no, what's the copay going to be? Well, hopefully nothing because today we are talking with the Job Doctor, also known as Tessa White, who spent a good chunk of her career heading up HR departments, mostly for tech companies. She's now founder and CEO of The Job Doctor and author of The Unspoken Truths for Career Success. That's coming up in a moment. Stay with us.

Tessa White, welcome to Smart Money. Hello. Thank you for having me. In this series, we are really focusing on ways to increase your income in kind of any form. So what would you say is the easiest way that people can increase their income? Well, I think they need to be very mindful that they are their best advocate for making money.

The company is not going to magically go in and decide that they are their best advocate for making money. The company's not going to magically go in and decide that they need to pay them more money because a company's always going to err on the side of they'll take as much as you'll give. So making sure that you're advocating for yourself is probably the greatest way that you make money. And you mean that in terms of salary negotiation or like looking for another job? Yeah. Salary negotiation, asking for money, which is uncomfortable for people to do sometimes. Understanding what the value of your role is or the position that you're applying for versus just kind of going with the first thing that people ask. I mean, a little bit of discomfort

on the front end of negotiating on behalf of yourself really has a massive impact on the back end. If you're, say, 35 years old and you negotiate an extra $5,000 for your job, it's not just $5,000 because in lifetime earnings, that's several hundred thousand dollars in lifetime earnings. And if you invested that difference, it's even more. So you need to look at it a little bit differently and say, every penny that I can negotiate on behalf of myself is the new basis for which other offers come in and other raises is based off of. And it really does have a cumulative effect that's significant. I want to go back to something that you said about increasing the value where you're at. Some people may have tried to negotiate or they've hit a

financial ceiling for some ways, but how can you get extra experience at your existing job? For example, if you want a role in management in the future, maybe take on some mentoring to work towards that. For people who negotiating isn't really on the table right now, how can people get some of that extra experience? First, you have to know what to ask for. One of my recommendations is that you mimic a top performer plan. Companies typically put people in this nine box and they have these top performers and

nobody knows who they are except the top performers. They get all these extra things. Some of those extra things are exposure to experiences, which are very valuable to you. That may be sitting in on an executive meeting and just seeing how things operate. And the thing about corporate America is your manager needs help. There's always more to do than people to do it. And so if you ask for your own top performer plan, you can actually ask for and be very directive with your manager to say, can I give part of a

presentation in this executive team meeting? Can I run this little piece of a project that is holding us back that we need to get over the finish line? Can I sit in and listen to how a meeting operates? Can I help develop a dashboard for our department so that we can show progression in some of the key objectives? So there's lots of different ways you can do it. But the key is you have to ask because most managers are not really great at putting together growth plans for people. They've got a lot of people and it gets very murky what they need. But if you actually go to your manager and direct it and say, can I do this one thing? Can you help make this one thing happen? Or these two things happen? Then your odds go way up and your credibility goes up in the organization,

your visibility goes up, and therefore your promotability goes up. I love what you said about visibility because I think that is so, so important, especially a lot of people are now working in remote environments. And so you don't really get that face-to-face time. And so what are some ways that people can kind of increase their visibility? Kind of like you said, talking about a presentation, but just ways to get exposure. And then how does that value come back to them? Well, let's start with something that I think people might find interesting. I've sat in on hundreds of promotion meetings where they decide who gets the promotions that year. And almost without fail, it's like a broken record. The people that don't get the

promotions, people will say, well, they sound great, but I don't know who they are. I haven't worked with them. One of the big keys to getting the promotions is visibility across the organization and being able to collaborate well with other departments. And it's really important that when people know you, you have a greater chance of getting the promotion and when you intersect with them. So that's the first thing is that having that exposure is really important. One of the first practical things that I would do in a job

is to go talk to the people that intersect with my role and say, tell me, what do you expect out of this role? What are the problems that I am helping solve for you? And where are your pain points? And I would get very, very aligned with what those people and constituents need because the job on paper is not the real job. It never is. And this helps you determine what the real job is and how you win more importantly, how you align yourself to win. So I would be having those conversations at least twice a year because that's what's going to point you towards how you actually work on the things that are going to get you promoted in a company and how we're going to get visibility for you and what you do. I think about that a lot where I work in terms of even just posting on Slack

and making sure that I post regularly in the channels that my boss and my boss's boss and even my boss's boss's boss are because that visibility is so important. So they say, oh, I know who this person is. I know what they're working on. I know they're doing X, Y, and Z. So what are some other ways to make sure you're getting that managerial attention that could potentially lead to a raise or a promotion. I'm a big believer in planting seeds in an organization with other managers and other places in the organization so that you know what's coming. Managers are planning six months, eight months in advance, sometimes a year in advance of what they need and what's coming. And you need to be talking with them about how are you going to be evolving?

What are the big problems you're trying to solve? What are big initiatives and things that are going to help you over the next couple of years move into the next level of efficiency? And when you understand those things, then you get a better idea of how you fit into the ecosystem. And you also get a better idea of maybe where you want to go in the future. And then you can begin to craft the kind of experiences that you need so that you will be somebody that they can pay attention to. I would absolutely treat your company like a big homework assignment. And I would be trying to listen to the quarterly reports, listen to the CEO, you know, what are the big objectives that we're trying to accomplish? And it helps you establish that narrative. Because I get mad when people come and say, I interviewed, but it didn't work very good,

or I don't think they understood my value. And I say, if you don't understand your value proposition, I promise you the company won't. It really is your job to figure out what your value proposition is. And in order to do that, you have to have information. So when you go into those meetings, it's so hard to kind of know what your value is or what people call your market value. So how do we figure that out? Like, how do you essentially see if there's space to grow in terms of pay in your existing role? How do you figure out what you should be getting paid? Well, that's a lot of different questions. Let me start with value proposition, first of all.

It's kind of a big word, but how do you know what value you bring to an organization? This is a really hard thing for people, but if you think about leverage, that's what you want to have is leverage to get what you want. Leverage at its core is I have what you need. And so if you can define what is it that I see the company needs, where are they going, and what have I done so far that shows I have that skill, and you can then turn it into numbers. I was able to come into my department and move the needle on these particular criteria. Then you have more leverage. But what most people do is they say, I'm really good at working with customers. Well, that's in and of itself doesn't mean anything. But if you say, my customer service scores are 20% higher than most of the other people in the department,

or I was able to decrease call time by X and increase customer satisfaction by X, then you actually have something that the company understands and you're speaking their language. So part of your job in determining your value proposition is saying, how am I solving problems for the company? And then how do I turn what I've done into metrics or numbers? That's why I tell people you should go to work every day and be measuring. If you don't have a department metric that tells you, am I doing good or am I

not doing good? Figure out what it is and start measuring things because those numbers become so critical to how you position yourself for a company. There's two things, figuring out what the company kind of needs from you and what you can bring to it. And then obviously, what can the company do for you? Well, your market value, it's like a house. When we put a house up for sale, we don't have some neat, perfect numbers to what its value is. What we know is that other houses sold at this amount that were similar. And the same is true with compensation. What other companies are willing to hire this role at is a pretty good indicator that you can bring that helps determine the value of a role. But the other thing that you have quite a bit of control over is being able to tell the company, here's how I

solved the problems in my last company, and here's how I'll solve them for you. So for recruiting, for example, let's just take a general example. If I said I'm a really good recruiter and I was able to manage a recruiting team and fill 200 positions in a year. That doesn't in and of itself mean anything. But if I understand that a company has low resources and they don't have a lot of money to put towards recruiters, I could say in the last company, I turned every employee into a recruiter in our company because we didn't have a lot of funds. And we rolled out this employee referral program that made every employee a recruiter. And it increased the number of applicants that we were

bringing into the company month over month by 60%. Then all of a sudden the company goes, scrappy. I need scrappy. I'm a company that doesn't have a lot of money. I need creativity. Look what that person was able to do. And all of a sudden your leverage went up, which means your compensation probably goes up because you have what the company needs. Yeah, I think it's so important to think about what are the problems that need to get solved here and sort of apply yourself to those and be moldable

and be able to say, yeah, I can help you with that. I feel like that goes so far and feeds into the visibility thing that we were talking about earlier because then you become known as someone who can fix problems. It's everything. Because on resumes, again, one of my pet peeves is a resume will say, say you take an HR person and they say, I'm a 25-year professional who has been able to manage talent management,

training, and employee relations. Well, every single resume says that. But the minute that I can tap into, how do I solve the problems? And I say, I'm the person that you'd hire if you need to go fast and put in place infrastructure so that you can go public or so that you can have a high merger acquisition strategy, for example. If I say that, then I've just tapped into how to solve a problem that that particular small company needs. So much of this is difficult to do and every company is different. And I think it's so important to get help and support along the way as you're trying to not only be better in your

role, but be making more money. So what can you tell me about how you can use mentorship to further your career and help you increase your income? What can mentorship look like and how do you find a mentor? I think every single person needs to have not just a mentor, they need to have a handful of mentors and it's available to everybody. What most people, the mistake they make is they think they need to go up to somebody and say, will you be my mentor? When in fact, the best mentorships that I know of are where you identify people who have really good skill sets in an area. For example, everybody should have a mentor that they can look to for how do you manage people? How do you get conflict over the finish

line? And how do you do it in a way that's productive rather than destructive? Everybody should have a mentor around data and data analytics or presentations and how to give a good presentation or run a meeting. You should identify people who do that well. Watch them. You don't even need to ask, will you be my mentor? Watch them. Watch what they do in that area. And then, for example, before you go give a meeting, say, I've been watching you.

You give really good presentations and I've tried to use some of the principles I see that you utilize. Will you take a look at this presentation and tell me what you change? Can I just give it to you? Spend 10, 15 minutes to run over the high level. That's how you have mentors that make a difference for you is you find people that do good things, you watch them very closely, and then you ask them when the time is right to help you make sure you've done that thing right. And I think that's available to everybody. You don't have to have a company program to do it. You don't have to have somebody necessarily saying they'll be your mentor. Just pick people.

Watch them. So it doesn't need to be nearly as formal as what a lot of people think of when they think of entering a mentorship relationship. It can be as simple as, I saw you do this. You're great at it. Can you help me with this one presentation? Exactly. Or this one conflict. I have a high conflict situation and this is how I was thinking of handling it. How would you do it? Exactly. I think that's far more productive. To that point, obviously a mentorship and mentoring relationship is different than working with a career coach. But how can you find a career coach

who can maybe help you? And how do you navigate that search? There's obviously a widespread of what people charge for career coaching services. Are there any certifications that people should look for when it comes to working with a career coach to kind of make sure they're working with someone who knows their stuff? You know, there are plenty of different certifications, but I don't think that one is necessarily better than another. I think it's a lot like finding a regular therapist. You need to find somebody that you vibe with. You need to find somebody who's been around the block and has some experience. Probably my biggest beef with career coaching as an industry is that a lot of people with five years of career experience are

calling themselves a career coach. You need somebody who has seen lots of situations in lots of different circumstances and watched how those situations play out. And I think when you have somebody that has either been in your industry or has been around the block for a while, they're going to be able to give you a much better idea of the different choices that you have. And more importantly, the likely different outcomes of those scenarios if you handle it different ways. But somebody with five years of experience simply doesn't have enough experience or enough behind the scenes in really high stakes situations to be able to give, I think, information that is really, really helpful or useful.

And so aside from a lack of experience, is there anything else to kind of look out for in this industry? I would find people that know my industry. For instance, tech is a different flavor than blue collar. If I took advice from a career coach that's a high-tech career coach and I'm in a blue collar environment, that advice is not going to play as well because there's just different flavors to different industries. So you try and find somebody that's the best match to the environment that you are working in, I think,

and then you make sure that that person has a lot of experience as well. Is there anything that I didn't ask you about that seems particularly important for people to think about if they're trying to increase their income in a role that they're already in? I will tell you that there is a trend that I'm seeing that I think is really valuable to understand. There's a lot of change happening right now, a lot of layoffs and a lot of people leaving companies. But those people who stay through, I call it a red zone of a company, usually have tremendous

opportunities that come their way because of the people that leave and the gaps that that creates. And even though it may be an uncomfortable period of time to try and do more with less, learning how to work through red zones of companies is really teaching you to innovate and it's teaching resilience. And that skill set is extraordinarily valuable. People who stay in companies often end up with the increases and the promotions that they want because of the vacancies that are left. And so I would tell people, don't think that the grass is greener just by leaving a company through a red zone. A red zone can be a tremendous gift to you. And particularly people who are okay with taking promotions that are lateral and they learn the ecosystem of a company that has delayed

value. While it may seem like you're going backwards or standing still, if you're not getting big raises, if you understand the ecosystem of a company by working in different departments over time, that makes you incredibly valuable to a company. And I'm seeing people use that as a career strategy that ends up paying dividends, if you look at it in the long term, like a four-year horizon, is huge. Even when they leave that company, the ability to understand the different departments and how they work together is something that's very, very valuable. So don't discount the red zone of a company and think, you know, your brain's going to tell you this is the

wrong company, the wrong time. It's terrible. It feels uncomfortable. But discomfort doesn't mean you're in the wrong company. It simply means you have to learn to do things differently. And it really is the trigger for innovation. And if you can stay through that red zone, it can be incredibly valuable to you. Well, Tessa White, aka The Job Doctor, thank you so much for talking with us today. And we really appreciate your time. Yeah, thank you so much for having me. Alana, I so love how you and Tessa talked about what I sometimes think of as the theater of the workplace or narrative building around your job. And I don't mean to be flip or diminish the real work that

goes into building any career. But if you aren't good at presenting the story of your work, building a compelling cast of characters through your colleagues and advocates who support your work, and getting people excited about what you are doing, it's going to be a lot harder to get those big opportunities in your career. Tessa described it as planting seeds, and I kind of think about it as foreshadowing, set building, and fleshing out your narrative arc. Totally. And there's so much that goes into what we do at work and how we can grow and eventually make more money. And if you're looking for inspiration on where exactly to figure out what type of experience you should be getting, try looking at job listings for jobs you'll eventually want but maybe aren't qualified for

now. That will clue you into where you should start looking. For example, if you're in a job that doesn't currently give you management experience but you're looking to work as a manager in the future, you could give informal mentoring a try. So try thinking from your future resume's perspective. Try to think from your future resume's perspective. Try to think from your future resume's perspective. What experience do you need to have to check a box on a job openings list and how can you get it now? Yeah. And once you identify what areas you want to get more experience in, there are thousands of online courses you can take for free or for just a small amount of money to exercise those skills. You can learn how to code,

you can learn about AI, how to use spreadsheets, and pretty much anything else you can think of. So think about what courses could help you out in your current role or help make the case to give you a promotion. And this is a great time to look at other roles again and see what particular skills they're looking for. If you're looking for jobs in IT support, for example, you can take a Google certification course for that. Some companies even offer financial compensation for furthering your education. So be sure to ask your manager if there are any funds available to help you pay for that education costs. That's a great call. So Alana, tell us what's coming up in episode two of the series.

Next up, we are going to hear from an expert from LinkedIn about how to best optimize your profile so you can make the most out of a job search. I think that the number one thing that I would say to folks if you're trying to make your profile more visible and more searchable is over 40% of recruiters say that they are searching for talent based on skills. And so you really have to put your skills in your summary

and use skills and skills language. For now, that's all we have for this episode. Do you have a money question of your own? Turn to the nerds and call or text us your questions at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. And remember, you can follow the show on your favorite podcast app, including Spotify, Apple Podcasts, and iHeartRadio to automatically download new episodes.

This episode was produced by Tess Vigeland. Sean helped with editing. Kevin Barry helped with fact-checking. Sarah Brink mixed our audio. And a big thank you to NerdWallet's editors for all their help. Here's our brief disclaimer. We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. And with that said, until next time, turn to the nerds.