Whether you’re still in school or you’re eager to transition into a career in which your earning potential is on the rise, it’s important to have an accurate idea of what you’re capable of earning. If you don’t know how much you can potentially earn, or what kind of lifestyle you’d be able to sustain without sacrificing your current lifestyle, you could be missing out on a lucrative opportunity to set yourself up for retirement or to supplement your family’s income.
The only way to make an informed decision about salary is to know what sort of job you have an opportunity to secure, how much you can reasonably expect to earn and how much you’d be willing to accept.
In addition to helping you figure out your worth, this will also help you have an honest assessment of how much you can afford to spend each month. This will help you allocate your resources and determine how much time you need to save in order to eliminate any saving gap.
For instance, if you’re a first-time job seeker who fears going back to school to further your education, you shouldn’t accept a low salary offer just because it will make you earn more in the future. Developing a strategy to help you determine what you can realistically earn and then evaluate it with how much you can manage.
According to Save for Retirement Advisor Research, you need to allocate a minimum of 3% of your paychecks annually for retirement savings. Before you begin the process of earning more, or even look into options that could help you achieve that goal sooner, make sure you have a solid estimate of how much you can realistically afford to spend each month. This will help you identify, prioritize and integrate opportunities to achieve the retirement goals you have.
For example, if you currently make $50,000 per year and look at how much time it will take you to save enough to retire, you may need to live in a modest home that would let you have room for one or two cars, use public transportation to get to and from work and continue to work while saving a significant portion of your paychecks. If that’s not enough, developing a strategy to help you reach your target may be required.
If you’re an experienced, working professional, you’re in better shape than many. As a professional, you’re probably earning between $50,000 to $150,000. Although you may need to make adjustments to your lifestyle and outlook in order to reach that initial financial security goal (or to maintain it), you’ll likely be OK. Here are some ways you can keep your lifestyle in line with your salary:
• Don’t pay for extras. There are many expenses in life that you don’t need to pay for. Take the example of the post-secondary education you could obtain in a relatively affordable program that allows you to earn more money and work less. You’ll be on the road to financial stability by earning more money and spending less (and still maintaining your lifestyle).
• Save for the future. Financial rewards come in a variety of ways, so start off by building a nest egg. You may be surprised at how much you can earn if you invest even small amounts toward achieving more immediately achievable goals — even setting aside a little bit for a down payment on a home, or potential education expenses down the road.
• Create a financial roadmap. With the current political climate, it’s easy to get overwhelmed by many of the financial decisions you will have to make in the coming years. Simply be open to the chance to make some smart financial decisions, and your bank account will begin to swell. Having a clear financial roadmap can set you on a path to attain higher earning potential and spend more time with those you love and love to entertain.
It’s important to meet with a financial advisor to assist you in making smart investment decisions in order to attain the financial security you deserve. Identify a competent agent who understands your needs and budget and has experience evaluating financial products. Once you reach a point where you can confidently recommend your chosen agent to others, find a post-work opportunity to commit to so you can achieve financial independence without having to settle for less than you deserve.