If you’re working hard at your job and being reasonable with your spending, you may still find it’s hard to make ends meet and hit your savings goals.
One question to ask yourself is whether you’re making enough money. Can you really afford to keep plugging along at your current salary? Here, you’ll learn some helpful ways to tell if you should be making more money and, if you should, how to get there.
10 Red Flags That Signal That Your Income Is Too Low
Do you frequently ask yourself whether you should be making more money — or feel as if you’re not making money work for you? If so, it’s possible you aren’t making enough or managing it optimally. Here are some signs that you need to be earning more in order to thrive financially.
1. Not Being Able to Pay Your Bills
As long as you aren’t renting a luxurious penthouse or leasing a fancy car you truly can’t afford, you should be making enough to pay your basic bills. Yes, it can be difficult to save money with a low income. But if you’re working full-time to cover things like rent, car payment, health care, and utilities, without any shot at saving for your future, that’s a sign you need to earn more money.
2. Using Your Credit Card for All Expenses
There’s nothing wrong with using a credit card to pay for expenses if you can afford to pay your credit card bill off in full when your monthly statement arrives. That’s a great way to earn cash back and credit card rewards.
A problem arises if you need to use a credit card in order to cover expenses because you don’t earn enough to buy essentials, like food and personal care items.
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3. Not Being Able to Have an Emergency Fund
Having an emergency fund can help you be prepared for the unexpected, such as a major medical or dental bill or getting laid off. Ideally, you would have three to six months’ worth of basic living expenses covered by the money in an emergency fund. If you’re living paycheck to paycheck, however, and can’t even start building a fund with perhaps $25 per pay period, you likely need to earn more.
4. Paying Only the Minimum on Debts
As mentioned, turning to a credit card to cover essential purchases can be a sign of not making enough money. This can lead to high-interest credit card debt, which can be hard to pay down without making extra payments.
If you can’t afford to make extra payments on a credit card or other form of debt, increasing your income can make it possible to minimize how much you owe and those interest payments.
5. Not Being Able to Cut Anything Else
If you take a cold, hard look at your budget and realize you can’t cut any more expenses because you are only paying for essentials, then that’s a sign you need an income increase. Living on such a tight budget isn’t sustainable long-term, and there should ideally be room in a budget for some small fun purchases, too.
Recommended: 7 Different Types of Budgeting Methods
6. Not Being Able to Build Savings
Even if you are motivated to save money, if you’re not able to save for retirement or other long-term goals, it could be a sign that you’re not earning enough.
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7. Making the Same Wage Despite Company Growing
If your company is growing and flourishing, in part because of contributions made by you and other workers, you may deserve to earn more than you’re currently making.
8. Not Being Able to Reach Financial Goals
If you are earning enough money and sticking to a budget, then in theory you should be able to make slow but steady progress toward your financial goals. Failing to do so could mean you’re coming up short on salary.
9. Consistently Struggling to Make Ends Meet at the Beginning of the Month
Many people start to run out of spending money at the end of the month. That’s because they’ve paid all their bills and are waiting for the next cash infusion from their paycheck. If, however, you are consistently struggling to make ends meet at the beginning of the month, when payday has arrived, this indicates you aren’t making enough to pay your essential bills.
10. Worrying About Money Consistently
Everyone deserves a good night’s rest, not lying awake worrying about how to pay the bills. If you are consistently worrying about money and trying to figure out how to tackle financial anxiety and stress, that can be a major sign you aren’t earning enough money.
Tips for Negotiating a Higher Wage With Your Employer
If you feel you need and merit more money, it can be wise to have a conversation about a raise. These tips can help.
• Research salary data. Before an employee asks for a raise, they need to get an idea of how much workers in similar roles at other companies earn. Luckily, there are tons of online resources where workers share their job titles and salaries. It can also help to look at the salaries listed on current job postings similar to your position.
• Make a list of accomplishments. Workers should approach the boss with the facts about how good they are at their jobs and why they deserve to earn more. Make a list that specifies some of your major contributions and use that to back up your ask for higher pay.
• Have an alternate ask. Sometimes a company truly can’t afford to give a good employee a raise. In that case, is there something they can do to make your life easier? Can they make it possible to work remotely and save on commuting? Can they give you more PTO or a flexible schedule to help cut down on daycare costs?
Recommended: Good Paying Jobs Without a College Degree
The Takeaway
If you are working hard and watching your spending but are living paycheck to paycheck and are unable to save, you may not be earning enough money. Asking for a raise, with documentation of why you are worth it, is one path forward. Or you might decide to change jobs or career paths or even move somewhere more affordable.
It can also be a smart move to ensure the funds already in your bank account are working hard for you.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
FAQ
How do I know if I’m being underpaid?
Do salary research online to see what workers in similar roles and industries are earning. You can likely find this information everywhere from the Bureau of Labor Statistics to job search sites.
How much money must I earn to feel it is enough?
Having “enough” money depends on your unique perspective. That being said, you need to be able to comfortably pay your bills and cover essential expenses without having to worry that you’re running out of money each month. Also, being able to save for long-term goals (such as a down payment on a house or retirement) is also important.
How can I save if I don’t make enough money?
It can be hard to save money if you don’t earn much more income than you require to get by. Consumers can always scrutinize their budget to see where they can cut back spending in order to save more. Too many streaming services? Or pricey lunches? Try starting there.
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SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
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