Financial Learning | August 24, 2022 |3 minutes read
Around 60% of all workers in the United States earn an hourly wage. While it may seem like the only way to earn more is to work more, that’s not the case. Today’s competitive hiring environment may just help you increase your hourly income.
Here’s a look at how a $1 raise could impact your finances, along with tips for getting a raise.
Understand Your Income and Other Compensation
It’s crucial to understand precisely how much you’re taking home at your current pay rate. Calculate the number of hours you work per year, and multiply that by your hourly rate.
For example, someone who works 2,000 hours per year and makes $21.50 an hour after taxes takes home $43,000 annually.
Many employers offer health, dental, and vision coverage to their employees. Calculate how much they contribute and add that number to your annual compensation. This will help you create a more accurate picture of how much your current employer is investing in you. If you’re unsure what benefits you have, or how much they’re worth, reach out to your company’s human resources department.
How $1 Per Hour Impacts Your Earnings
If you get a raise of $1 per hour, whether by getting a promotion or changing jobs, you get that dollar every hour you work. That’s why measuring and tracking your earnings with care can add thousands of dollars to your pocket throughout your career.
Let’s break it down:
| Period | Additional Income |
| 8-hour work day | $8 |
| 40 hour work week | $40 |
| 4 week month | $160 |
| 12 months in a year | $2,000 |
| Over 5 Years | $10,000 |
| Over 10 Years | $20,000 |
| Over 20 Years | $40,000 |
| Over 30 Years | $60,000 |
While $1 may not seem like much, it can add up to a lot over time. If you can get a raise larger than $1, you’ll see your lifetime earnings go up even more. That’s why a promotion or raise can make a difference in your finances.
Common Methods to Increase Your Hourly Rate
Do you want to get that promotion or raise? Here are some tried and true methods of getting a raise.
- Ask for a raise or promotion. While this conversation may be intimidating to broach, sometimes asking for a raise works. When asking for a raise or promotion, come prepared, showing that you’re reliable and make an excellent contribution to the company. Don’t forget to include health benefits when calculating your new potential earnings.
- Seek out education or training. Earning a degree or certificate is a great way to increase your income. Consider applying to your local community college or trade school. Some employers even offer tuition reimbursem*nt for continuing your education.
- Change jobs. If you’re not seeing an opportunity for a raise at your current company, it could be time to look elsewhere. Only change jobs if the new job comes with a pay or responsibility increase.
The Sky’s the Limit
When dealing with financial stress, it can be easy to focus on areas to cut. While budgeting is an integral part of managing your income, there’s only so much you can save. Your income can grow forever. Over your lifetime, it could add up to tens of thousands, or even hundreds of thousands.
That’s something anyone can get excited about.
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