Career growth is great. Wealth growth? Also great.
But as it turns out, the two go hand in hand in more ways than you might expect. Obviously, progressing your career can lead to increased wealth in the form of a higher salary (though not always — sometimes, career growth means a job that pays less money but is more personally fulfilling).
But professional growth can also make you more confident, courageous, and light on your feet, ready to tackle new opportunities as they arise. This, of course, can also have a positive impact on your financials, to say nothing of your general wellbeing.
In other words, setting yourself up for success in all areas of life often comes down to honing the same basic set of skills — skills like negotiating, networking, and planning.
As we swing into a whole new year of potential, here are some of the best moves to make to help bolster both your professional life and your financial status, along with everything else.
1. Set a Good Foundation
Whether you’re sitting down at the table with the HR representative at your new job or sitting down in front of your expense chart, setting a solid foundation offers you the leverage you need to move in the direction you want.
Negotiation is one of the most important steps in the hiring process for both recruiters and employees — but unfortunately, many job seekers simply aren’t doing it.
In fact, according to a recent survey of 1,200 Americans by staffing firm Randstad, more than half of workers have never negotiated their pay, and more than 60% say they’d leave their company for a pay raise.
That combination of statistics suggests that failing to negotiate may lead to more job-hopping for candidates and a higher turnover rate for hiring managers, both of which can be frustrating realities to deal with. All to say nothing of the fact that negotiating could lead to more money in your pocket, which is basically never a bad thing.
So, step one: actually negotiate. But how, exactly?
Career coach Kathlyn Hart, whose specific mission is to help women earn more in their businesses and careers, said that one of the secrets of excellent negotiation is the simple sound of silence. When you’re being peppered by questions like how much you made in previous roles, it’s easy to feel obligated to respond to everything.
“You don’t actually have to put all those cards on the table,” Hart said.
She also mentions that many of us have a bad habit of negotiating ourselves down before we even give the other party the chance to do so: Maybe instead of asking for the salary we want, we knock it down a percentage to not appear too greedy. That talking-down part of the negotiation, she said, is not your job.
Obviously, though, it can be scary to breach the conversation at all, especially if you’ve just been offered a truly knockout opportunity. But even if you don’t talk hard figures at the table, Hart recommends asking for some time to review the role and make sure it’s a good fit, even if you know, in your heart, you’re going to take it. That way, you’ve set a tone with the company signaling you’re going to carefully consider your options and not just take whatever comes your way.
After all, it’s been said many times before, but an interview truly is a two-way street. “We have just as much power in that conversation,” Hart said.
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Although it’s more likely to occur at a kitchen table than a conference table, budgeting is just as important as negotiating. In fact, you might even think of budgeting as dealing with yourself.
While the basics of budgeting might seem simple in theory — figure out your expenses; ensure you’re spending less than you earn — in practice, it can be downright difficult to chip away at those monthly costs.
You’re only going to get so far by cutting back on lattes and ditching your Netflix subscription. (Which is another reason negotiating is so important: you could earn thousands more in a single conversation, Hart said, as opposed to saving a few dollars here or there.)
One great way to maximize your savings, she suggested, is to set up an automatic deposit into a high-yield savings account regularly, preferably once each pay period shortly after your check is disbursed. That way, the money will be out of your hands before you’ve even had the chance to think about it, and it’s a little bit harder to access it than it would be if it were in your regular checking account.
If you’re using a budgeting tool like Mint, Hart even suggests leaving that savings account out of your total tabulation. That way, the money is out of sight, out of mind, which means you’ll be a lot less likely to make the transfer and blow it on a vacation or new TV.
2. Prepare for Future Success
Like it or not, reputation is everything, both personally and professionally. Here are two tactics to help ensure you’re putting your best face forward in all areas of your life.
i. Grow Your Network
According to that adage, what you know pales in comparison to who you know, and that’s not an urban legend. According to some experts, as many as 80% of available jobs aren’t advertised in the first place. Instead, they’re found through — you guessed it — networking.
While it’s obvious that having a solid network in place can be a boon, getting there can seem overwhelming, particularly in today’s increasingly isolated world. But the good news is, everywhere there are people, there’s networking potential: “You never know who’s going to be a window of opportunity,” Hart said.
While striking up a conversation with somebody you meet at the grocery store or while waiting in line at the bank may prove to be fruitful on occasion, there are also dedicated networking spaces — many of which, helpfully, is now available online, thanks to the pandemic.
To find the group that works best for you, Hart recommends asking yourself what, exactly, you’re looking for. Do you need support and community, or are you actively looking for opportunities to jump into?
Then, take to the internet and see what’s available in your field. Local groups are great, but you probably won’t be limited to solely what’s in your area, thanks to the internet.
iii. Build Your Credit Score
Ensuring that important little number — or set of numbers, more accurately — is as high as possible could put you in a better position for meeting long-term goals like affordable homeownership or financing a new vehicle.
Whether you’re starting from scratch or working with some not-so-perfect existing credit, ramping up your score is possible, if time-consuming. Paying your debts on time every month will give you a credit boost in the long run… but there are also some quick ways to improve it.
For example, paying off one or more of your revolving balances will lower your credit utilization ratio, which accounts for 30% of your FICO score — second only to payment history, which accounts for 35%.
Another way to lower that ratio: expand your overall credit limit by asking for an increase on an existing credit card you own or considering opening a new one. (Be careful with this latter strategy, though; hard inquiries can harm your score, as you’re giving yourself one more card to max out potentially.)
3. Play The Long Game
Paving the way for success is all about long-term planning in the here and now. Here are some ways to look toward the future today.
i. Career Development
When you need a job, it’s easy to get caught up in the here and now: whatever is available is likely to be the most attractive option.
But creating a career plan can help ensure your professional life grows and develops over time in a way that will increase your wealth and life satisfaction.
Plus, this process can be fun: it all starts with thinking seriously about what you want your future to look like. It’s never too late to chase your dreams, no matter where your life has led you thus far. However, it will take some strategizing to get there.
Once you know where you’d like to go, consider the gap between that position and your current one. You may need to take on some continuing education courses or obtain additional professional qualifications to make this goal a reality, which will require time and money. It’s not going to happen overnight.
You might also reach out to people who currently inhabit the position you’re angling for and ask them how they made it happen.
Either way, it’s worth finding ways to grow your career — whether you’re simply trying to increase your income or hoping to segue into a field that you’ll find more personally fulfilling.
On the financial side of things, thinking about the long term is often synonymous with investing — and thanks to the power of compound interest, it’s true that investing is one of the most powerful ways to increase your wealth substantially.
For the best risk tolerance, a buy-and-hold approach is better than short-term investing or day trading, which can lead to significant earnings, yes — but big losses as well. Buy-and-hold investors pay less broker and trading fees and also pay capital gains taxes at a lower rate than those who hold their assets for less than a year do.
There are many different types of investment account options to consider, including specialized options for retirement and education. But even if you’re contributing to your 401(k) at work — which we’ll come back to in just a second — you might consider opening a standard brokerage investment account to help increase your wealth over time. (This should be separate from your emergency fund as any money on the stock market is subject to risk.)
4. Cement Your Future
Having a clear picture of what you want your future to look like will make it a whole lot easier to find the right path to that reality.
i. Get that 401(k) Match
Make no mistake about it: if you work for a company that offers an employer-sponsored retirement plan, like a 401(k), you should probably be contributing. And if that employer offers a match — that is, will put in a dollar of their own for every dollar you defer from your paychecks — you’re leaving money on the table if you don’t contribute up to that percentage.
Think about it: simply by stashing a portion of your paycheck away for retirement, which is already a smart money move, you’re getting what’s essentially free money from your employer. And even if you leave your job before you’re fully vested, you may be able to keep a portion of the employer’s contributions.
ii. Define Your Goals
You can’t bring your goals to life if you don’t know what they are! And keep in mind that defining goals means more than coming up with the perfect number for your retirement fund — although that’s important, too.
For one thing, to understand how much you’ll need to retire on, you need to think about what your ideal lifestyle will be like once you meet retirement age and decide what “retirement age” means to you. (Yes, the IRS has its definitions, but that doesn’t mean you can’t aim for an earlier retirement or work later in your life if you choose.)
Sit down with a paper and pencil — and your partner or family, too — and do some brainstorming about what you want your future to look like. Where will you live? What activities will occupy your days? How much money will it take to fund that lifestyle?
Along with long-term goals, like retirement, take into consideration medium- and short-term goals, too. Maybe you hope to purchase a new vehicle in the next three years or a home in the next decade. All of these stops along the way are important in your financial journey’s overall trajectory.
5. Stay Protected
If there’s one guaranteed thing in life, it’s that there are no guarantees. Fortunately, some accessible steps are available to help protect yourself and your family.
While few of us count insurance among our favorite bills to pay, it’s one of those things you’ll be thrilled you have if (and when) you need it. Along with the most prominent and necessary insurance products, like health insurance, you may also need auto insurance, renter’s or homeowner’s insurance, life insurance, or other types of coverage.
It’s important to choose a plan that works with your budget and also offers enough coverage to help you avert financial disaster should the worst occur — which is, after all, the point of an insurance policy. Furthermore, you should review your insurance products on an annual basis to ensure they’re still meeting your needs and that all the correct insured people and beneficiaries are listed on the policy.
ii. Emergency fund
Life happens: cars require expensive and unforeseen repairs; out-of-pocket medical expenses stack up; jobs can be lost. Having a substantial emergency fund in place can spell the difference between an inconvenience and a disaster.
As it stands, more than 40% of Americans would be able to cover a $1,000 emergency from a dedicated savings account, meaning many would turn to credit cards, personal loans, or handouts from friends and family. All of those debts can be dangerous in their own ways, which is why it’s a good idea to create an accessible but untouched, liquid emergency fund.
Many experts recommend saving at least three to six months’ worth of living expenses, though your personal risk tolerance may vary. For example, if you’re an independent contractor whose income fluctuates by nature, having an even larger cushion may behoove you and help you avoid stress headaches.
That said, any emergency fund is better than nothing, and even $1,000 helps. Ensure that your emergency cash is stashed in an accessible, low-risk account, like a high-yield savings account, rather than invested in the stock market or tied up in a CD.
By getting intentional and putting your planning skills to good use, you can grow your wealth, advance your career, and move closer to your dream life all at the same time. An ideal future starts with a single step today.