Join 3,557 readers in helping fund MetaFilter (Hide)


Movin on up
June 24, 2009 9:32 PM   Subscribe

I just got a raise. Yay! So here's my question: how good is it? Will a raise of this size make my life more comfortable? Nitty gritty details (lots of numbers!) inside.

I work in print media in New York City. This is the first raise I have ever received in my life. I'm excited about it, as I pretty much live paycheck to paycheck, so every little bit helps. My salary history:

2006: $34,000 as a marketing manager for an arts organization in Boston.1
2007: $30,000 as an entry-level assistant at a print media company in NYC.
2008: $32,500 when I switched companies. Still an assistant, but for a more important person, and I work on my own projects, too.
2009: $34,500 — the raise! No change in responsibilities, just more money. (I've actually only been at this company for 9 months; not a full year.) I'm finally back to the salary I had three years ago in the job I hated (though, considering the benefits at that job were practically nonexistent, I probably effectively reached that point a while ago).

So, is a 6.15% raise a good raise? Average? Piddling? I have no idea. Will an extra $2,000 ($166/month) actually have any effect on my quality of living? What do you think, MeFi?


1My first job straight out of college. It sucked. I quit and moved to New York.
posted by anonymous to Work & Money (28 answers total) 4 users marked this as a favorite
 
Be happy that you still have a job.

Did this raise come automatically or did you have to do an "employee review" kinda thing, and ace it?

I don't know your industry/location, but a raise is a raise. Inflation has been wavering on the negaative (but recent data has people making more big purchases), Low-one-figures. How's your rent doing - is the annual x% rent increase coming up soon (usually one year after you sign a lease, or whenever the lease is up) - and is it anywhere near 6.15%?

Maybe try to bank the difference between your old paycheck and the new. See if you ever need to dig into the savings. If not, you might end up with a nice chunk of cash with which to make life easier in the long run.
posted by porpoise at 9:39 PM on June 24, 2009


It's great that you got a raise in this economy, so props for that! Most people I know are getting nada or laid off, so pat yourself on the back for being valued at a successful company right now.

In NY, about 1/3 of that 2K is going to go straight back to taxes, leaving you with more like 110/month or and extra $55 in each paycheck.
It's not nothing, but it's not party time yet either.

I'd say it roughly translates to the difference between taking taxis home on the weekend or eating another meal out per week.
posted by rmless at 9:41 PM on June 24, 2009


Generally, I'd consider 6% to be a very decent raise even in a normal economy -- it's pretty awesome in the current meltdown conditions. However, don't get carried away because t's definitely not lifestyle-changing money. Stuff the extra cash into your mattress (or 401k or IRA or whatever).
posted by mhum at 9:57 PM on June 24, 2009


So, is a 6.15% raise a good raise? Average? Piddling? I have no idea.
It's not a bad raise at all.

Will an extra $2,000 ($166/month) actually have any effect on my quality of living? What do you think, MeFi?

At present, no it won't. The reason for this is that you will continue to live on your previous wage (which you know you can do), and put the whole of the raise amount into some sort of savings plan (OK, OK, you'll go out on the booze the first paycheque, congratulate yourself and feel all wealthy and stuff, and then sort out the savings plan for your second week).

This will help get you to the point where you are not living paycheque to paycheque... Making that transition is a good feeling.
posted by pompomtom at 10:01 PM on June 24, 2009 [14 favorites]


6.15% is an awesome raise.

Will it make your life better? Not a whole lot but what I found when I was going through my early, mid-20s (pretty much in the same boat) was that each little bump made things a little bit better until all of a sudden I could pay all my bills each month and have a little bit left over.

After that it was gravy.

Until I lost my job.
posted by Bonzai at 10:05 PM on June 24, 2009


Every time you increase your income, you have a choice: increase your standard of living, or safe the increase.

I think you'll find, if you poll your friends and relatives, that the usual answer -- especially when the raise is small -- that the raise immediately goes into either a small specific standard of living increase (like, say, I have cable now, w00t!) or really small incremental standard of living increases (like, say, I'll have the VENTI coffee today, and tomorrow, and the next day...)

So, to your raise: 6.15% is a good, solid raise, one you can be very happy with, especially in this economy. However, it is also small enough that odds are you'll increase your standard of living a bit, and so quickly you will feel like you deserve another raise/won't have anything to show for that raise.

Be one of the few, the proud: compare your first raise check to your previous couple of checks, and put aside every extra penny into a separate savings account, or as cash into a jar or something. Keep on living the way you are in the meantime. At the end of a year, look at that extra money, as it will have become a large enough amount that you could purchase a big ticket item or pay off a big bill, which will likely improve the quality of your life far more than the small specific/really small incremental improvements you would have gotten if you'd spent it as you got it.

Then, see if you can avoid spending it, and drop it into a CD with a decent interest rate. And, if you can have the discipline, keep doing this with every raise/salary increase you get in the next 5-10 years. If you can do this -- and, let's be clear, most people cannot -- in 5-10 years you're going to be living just as well as you do now, but you'll likely have a lot of money stashed away, probably enough for a down payment on a house or whatnot. Or you'll have a great big emergency fund. Or you'll be able to pay off that stupid, stupid credit card debt you accumulated in the meantime.

Good luck. Here's hoping you elect to go this route, which will make you smarter (or at least seem smarter) about money management than the vast majority of the population of this country. Don't fritter it away.
posted by davejay at 10:13 PM on June 24, 2009


That raise is awesome in a good economy or bad. Congratulations! First, do something special or buy something nice to celebrate.

Next, do you have any high interest debt, like credit cards? Pay that off ASAP with this extra money. Credit card debt sucks.

Third, I would put that extra away in savings - this way you can stop the paycheck to paycheck living. It is a great feeling knowing you aren't scraping the barrel every couple weeks. Plus you'll reduce stress when an unexpected expense comes up and you don't have to scramble to find the money and be less apt to turn to credit cards for those things. There's the standard 3 months of salary "they" say to save, so that's a good initial goal. You could even do part credit card reduction and part savings - to me having that peace of mind of savings is worth holding a bit of credit card debt for a few extra months.

Fourth, I would look into a 401k if your job offers it, ESPECIALLY if they match contributions. Employer matching for 401k is like free money - an additonal raise, if you will. If you can't do a 401k at work, then look into an IRA. The point here is you're young, it's a great habit to start now, and compound interest thrives on time. The sooner you start saving for retirement the quicker it will grow and the more you'll have to retire comfortably.

These are just a few highlights of what you can do from a financial standpoint. All of it basically deals with not spending it...so it's not much fun. But, you'll set yourself up for great security.
posted by JibberJabber at 10:46 PM on June 24, 2009


Don't get too excited and start blowing it off and end-up still going paycheck to paycheck. This is the opportunity to put some cash in the bank and stop the trend so that you don't need to rely on credit when unexpected things crop-up. It's a slippery slope otherwise.
posted by hungrysquirrels at 11:06 PM on June 24, 2009


That's a nice raise.

It won't make a huge difference in your day to day life if you let it slip away on little stuff - an extra latte, an extra lipstick.

If you save it (or even half of it), you'll start building a bit of a nest egg. A cash cushion beyond your next paycheck is a really nice bonus to give yourself.
posted by 26.2 at 11:07 PM on June 24, 2009


In this economy, 6% is great. In print media, 6% is great. It is also a pretty good annual raise to get from one's employer.

That said, it's only $2k. It's not a lot of money. The primary way early in one's career to drive salary upwards is to move from employer to employer. $10k, for example, is a large enough figure to make a big difference in your quality of life, and $44k is still a pretty affordable salary for a marketing manager. However, you would have to switch jobs (and possibly industries) to do that. Personally, I got a 55% raise switching jobs one time and that sure as hell improved my quality of life.

Moral, 6% is good but it doesn't buy your loyalty beyond the end of this recession.
posted by crazycanuck at 11:21 PM on June 24, 2009


The % doesn't matter. You could get a 400% raise, but if you only made $1 an hour, you'd only be making $5 after. A 6% raise to someone who makes a six figure salary != someone working for near-poverty wages.

The thing that strikes me is you make $30k in NYC, which must be pretty tough. I think you can probably answer the question of whether an extra $100 a month is life-changing better than anyone on askme. If you are basically living from paycheck to paycheck now, then you will have $100 of spare cash if you maintain your current lifestyle.

Which is cool. You can eat out with that, get booze, get a hooker, buy some dvds. There's a lot you can do with an extra $100 a month that doesn't take much imagination. But your lifestyle isn't going to change for that amount of money. I don't mean to be a downer though, you actually have a job, seem happy.. you're doing better than a lot of people. I guess I don't understand this question. Short version: No, I don't think an extra $100 a month after taxes will change your life, unless you can't afford to eat currently, in which case I think it will improve greatly because you will be able to afford food.
posted by cj_ at 11:37 PM on June 24, 2009


I got my first "real" job at 28K, got a raise at three months to 30K, at six months to 34K, at one year to 40K, at two years to 54K, and I think I left at about 60K. (That was over a decade ago, the first raise, at three months, may have been to 34K -- I don't recall anymore.)

My life style didn't really change. Sure, I initially splurged on some stupid shit, but mostly I just stopped worrying about budgeting, while still managing to accumulate money in my bank account.

After I passed 60K, I noticed that small (less than 10%) raises generally got mostly taken in taxes, and that bigger "raises" required changing jobs.

But I've found that raises don't change my lifestyle, they just allowed me to worry less about budgeting; the biggest change for me was buying more new books, instead of sifting through the stock at the used book store, and going to better restaurants.
posted by orthogonality at 11:42 PM on June 24, 2009


$2500/6% for an entry-level print media job is amazing. Great job! Buy us all a round of drinks!
posted by greenland at 11:56 PM on June 24, 2009 [1 favorite]


great.
start drinking expensive coffee.
then your life is changed.
posted by edtut at 12:19 AM on June 25, 2009


Congrats on the raise.
I agree with others, it's not a huge difference, but it might mean an extra few dinners out each month if you want, or some extra books to read, maybe a concert or sports event or theater to attend... or saved up for the year, money to travel.
Or, as others have said, save it. If you get that extra $160 per month, say put $100 of it away into savings, automatically, and don't touch it. If you're living okay now, then the raise can entirely go towards the future.
posted by davidnc at 3:05 AM on June 25, 2009


That is a nice raise. But with inflation being what it's been for the past few years, you may find that this doesn't actually raise your standard of living at all. Granted, we're currently experiencing a mild bout of deflation, but I don't know that many people are expecting that to last. So after taxes and inflation, you're only doing slightly better than holding steady.

Be thankful that you've kept your job and that your employer is able to keep you up to speed with the economy at large. Don't get that bigger apartment.
posted by valkyryn at 5:09 AM on June 25, 2009


I'd LOVE a 6% raise right now.

I'm also in New York. My raises are typically around the 10% area, but I've gotten a minor promotion with each of those. I think 4% is/was the basic standard of living raise at my company, so 6% is an indication that you're doing something right and they value you. Good job!

Also, whether ~$150 will make a difference in your standard of living depends on your standard of living. It would make a difference to ME, but it wouldn't make a difference to a good friend of mine. What part of your standard do you feel like needs to be improved?
posted by peanut_mcgillicuty at 5:26 AM on June 25, 2009


Nthing a lot of what's been said. The fact that you have a job - especially in this economy - is good. The fact that your company is able to do raises is even better. A 6% raise, considering you've been there less than a year, is great. (As a frame of reference - I also live and work in NYC, and my company structures the raise percentages by job level. So, entry level positions have the potential to get as much as a 5% raise; managers can get up to 7.5%; directors can get up to 10%, etc etc).

Regarding whether it will make a big change in your life - no, it won't. My raise this year was $1k, which after taxes is roughly $20/paycheck. So I would expect you'll actually be taking home an extra $40-45 every two weeks (if you're on a similar pay cycle, 26 checks/year). Like most people said, it's an extra cab ride or two, or an extra dinner out, if you're going to spend it. Pat yourself on the back and be glad for it, but don't expect anything to change drastically. :)
posted by Kattiara17 at 6:08 AM on June 25, 2009


6% is decent for a "merit increase" - i.e., a raise given when you haven't been promoted, typically driven by a yearly review. When switching jobs to a new company, I'd aim for at least a 10% raise. When being promoted within the same company, something in the area of 8-12% would be good.
posted by skwm at 6:45 AM on June 25, 2009


Seconding Jibber Jabber's recommendation; continue living the same style you are now (don't piss it away on fancy coffee foolishness or overpriced lunches out ever day) and put the amount of your raise either toward paying off all credit card debt ASAP (if you have any) or building your retirement savings (if your company has a 401k, start one; if you have a 401k, increase your contribution; otherwise look into a Roth IRA or something like that). You will be incredibly happy you did this in about 40 years, and if you don't saving now, you'll curse yourself for blowing you cash on coffee and fast food. Not glamorous, but it will dramatically improve the quality of your life, post-career.

Also, congrats. With the end of the fiscal year zooming up fast, neither I nor my domestic partner anticipate getting a raise this year from our employers.
posted by aught at 6:55 AM on June 25, 2009


If you do decide to Be Smart and sock away some or all of that extra money, use direct deposit to a special, separate bank account for this. Out of sight, out of mind -- and out of danger from the debit card!
posted by wenestvedt at 7:05 AM on June 25, 2009


6.15% is great. Continue your same SOL and save more. That way when if you keep up your raise hurdle, you will have a real chance of building savings and then slowly increasing your Standard of Living. Should put you in better financial shape in the long haul.
posted by stratastar at 7:17 AM on June 25, 2009


I think the biggest way it can change your life is to take away the stress of living paycheck to paycheck. If you save the raise instead of spending it on coffee, meals or whatever you can start to accumulate a monetary cushion for yourself. I think having that cushion will help you live a freer life where you aren't worrying nearly as much.
posted by Bunglegirl at 7:25 AM on June 25, 2009


It's loke compound interest. Every raise builds on the ones before. Continue your current standard of living, and use the extra money to pay down debt and build a nest egg/ retirement fund. You won't miss it, and having savings or being debt-free is a great way to reduce anxiety.
posted by theora55 at 7:30 AM on June 25, 2009


orthogonality, what industry was that and does it still exist?
posted by kittyprecious at 7:59 AM on June 25, 2009


I was getting 6-7% every year for a few years, and found that it was good enough to offset rent and other unavoidable cost of living increases while still providing a little extra to play around with or redirect into savings. Nothing life changing, however. One year, my required monthly student loan payments conveniently doubled concurrent with the raise, essentially putting me right back where I started, if not a little worse off.

Honestly, it took a 15-20% raise with a promotion before I felt like I was getting ahead in any particular way. Still, 6% is better than average (especially in this economy) and should at least allow you to keep up with rising costs and/or provide you a little extra cash assuming you keep your standard of living constant. Keep banking those 6% raises year after year (as opposed to increasing your standard of living to match), and they'll eventually add up - especially if you're simultaneously paying off debt.
posted by jal0021 at 8:45 AM on June 25, 2009


So, is a 6.15% raise a good raise? Average? Piddling? I have no idea.
It's not a bad raise at all.

Will an extra $2,000 ($166/month) actually have any effect on my quality of living? What do you think, MeFi?

At present, no it won't. The reason for this is that you will continue to live on your previous wage (which you know you can do), and put the whole of the raise amount into some sort of savings plan (OK, OK, you'll go out on the booze the first paycheque, congratulate yourself and feel all wealthy and stuff, and then sort out the savings plan for your second week).

This will help get you to the point where you are not living paycheque to paycheque... Making that transition is a good feeling.
posted by pompomtom at 10:01 PM on June 24 [11 favorites +] [!]


LISTEN TO THIS GUY!
Truer words were never spoken. Congratulations on your raise!
posted by WeekendJen at 11:32 AM on June 25, 2009


NYS employees got a 3% raise this year and that was considered good. Yours is double that so not bad. You've only just begun. Good luck.
posted by madstop1 at 5:02 PM on June 25, 2009


« Older Asking for a co-worker I wish ...   |  Beer cozy? Beer coozy? Which o... Newer »
This thread is closed to new comments.