Personal Finance - How to Know If You Need To Get A Higher Salary

Do you often ask yourself, "Is my salary enough?" If you find yourself with little to no savings at the end of every month, then the answer to that question is probably "No, it's not enough." But could it be that you have high salary expectations, or perhaps you're simply living beyond your means?

We naturally aspire for higher salaries but a big part of being a responsible professional is understanding your worth at work.

There's a difference between not being paid enough and spending too much, so before you rush into the HR department's office demanding more pay, sit down and look at your finances carefully.

If you find that you are living beyond your means, then the solution is to trim your unnecessary expenses. If you're living prudently and still end up barely covering your essentials with zero in the bank account, you may wish to consider if there are ways to increase your current salary.

Here are common signs you need to be better paid—or find ways to reduce your expenses.

1. You keep maxing out your credit cards every month.

Managing your credit cards expenses is the test you need to pass to be financially responsible. While they come with plenty of perks, you also need discipline to keep up with payments, track your credit score, and avoid paying your statements late.

If you're one of those people who max out their credit cards every month, then spend five minutes looking at your latest bill and ask yourself the following question for each item: Would I have made this purchase if I didn't use my credit card? If the answers above are no, then you know there's room to reduce unnecessary expenses. Start by cutting back on swiping the plastic. Make a conscious effort to leave the card at home, so you can minimise the pull to swipe.

Another precaution you can take is setting limits to your online spending. Most credit cards now offer this function on your bank's mobile banking app. Just look for the setting that lets you set a lower limit for online and offline shopping to save you from another massive credit card bill.

2. You have zero savings.

Check your savings account. If it's still where it was when you started even though you're not making big purchases, then there's a problem here. Saving takes effort, but it also takes, well, money. If you can't even put aside a small sum every month, then this could be a sign your salary is too low. A comfortable salary should let you set aside at least 20 per cent of what you make for your savings. Anything lower says you're either spending too much or earning too little.

Take a moment to analyse your finances. If you find that you're living beyond your means, then take this as a sign to dial back on the food deliveries and online shopping. Ask yourself this important question before you buy something: Will my life be worse without these expenses?

Your answer to that question is all you need to know. Instead of buying something you don't need, put it away in your savings account. Another way to make sure you hit your savings goal is by setting up a separate account entirely. Usually, you spend what you should save because the money is readily available. If you move it to a different account, then that will hardwire your brain to realise that, no, you can't spend what you should be saving.

3. You're usually out of cash before the end of the month.

If you have a fair salary and you manage your expenses well, then you should be able to end the month with at least a little left in your bank account. If not, then that means you're living paycheck to paycheck, which is a stressful lifestyle to lead.

Sometimes, it's no one's fault, though. You might have just been handed a less than adequate salary package, and have to deal with it until you get a raise. Until then, one way to beat financial stress is with a planned out monthly budget and sticking to it for the rest of the month. That means not diverting from the budget, not making additional expenses, and allotting a small fund every month in case you have an emergency. Keep every receipt, log every expense, and know where your money is going so you never find yourself with zero in the account at the end of every month.

Budgeting is tedious, but if you ever find yourself too lazy or uninspired to strictly follow the budget, ask yourself: Do you want to keep living paycheck to paycheck? That should give you ample motivation to stick with the budget plan so you can eventually work your way toward a higher salary.

4. You're getting paid less than your colleagues.

One vital way of determining whether your salary is too low is if it's below the average pay of your colleagues on the same level as you. If this is the case, then you already argue against hand when asking for a pay rise. Employees in the same rank generally should be paid the same.

Look at your workload. Ask yourself: Does my work correspond with my pay? If you have more or heavier responsibilities than your colleagues, then you should be paid higher. If you have more experience, then you should be paid higher. If you show more expertise or have contributed more to this company, then you should be paid better.

Companies have strict guidelines for salary packages, so study up on this as well. That way, you'll have a better argument prepared for when you negotiate for a higher salary with your superiors. If your argument is solid, then your boss should understand your worth to the company and give you the pay you deserve.

5. You're constantly running behind on your bills.

Another crucial factor in financial responsibilities is having your priorities in order. That means paying your bills before going shopping for food or miscellaneous products. We talked about creating a budget plan, now let's discuss making necessary adjustments after asking yourself, Is this situation avoidable?

Electricity, water, rent, Internet—these should always be first on your list. If these bills are too high, then look at how you can reduce them. For example, turn off the lights before you leave the house, shut down your aircon and let the cooler air cool you down, move to a more affordable house or purchase a more energy-efficient car, and scour the net for better Internet plans.

It's all about being resourceful. Search for more hacks on how to handle your finances so you don't run behind your bills. If you need extra cash in case you anticipate your bills increasing in cost, then cut your grocery budget with the hack of only going shopping on a full stomach. This is so you won't be hungry while shopping and buying things you don't need. Make as many adjustments as you can, but if you still find yourself needing to take out loans or having the electricity cut, then you know for a fact that your salary is indeed not enough.

Once all of these criteria are met, then make your case to ask for higher pay. As the saying goes, we should work to live, not live to work—but that doesn't mean we need to be financial martyrs. If you're in a situation where life is no longer comfortable, then search for opportunities that will give you the comfortable career you deserve.

For more advice, visit JobStreet's Career Resources page, or visit JobStreet's job board to find listings with salaries that you need for your lifestyle.