Why You Need to Focus on Increasing Your Income Right Out of College

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Updated on Wednesday, October 21, 2015

Female Woman Sitting At Interview

Many young adults struggle to get a job after graduating from college. According to an October 2015 update by the Bureau of Labor Statistics, 20 to 24 year olds face an unemployment rate of 9.1%, while those over 25 have an unemployment rate of 4.1%.

I know I faced this struggle when I graduated back in 2012. Most of my friends who graduated around the same time are currently working two jobs: a full-time job and odd jobs here and there to fill in the gaps, or numerous part-time jobs which equate to a full-time salary.

Increasing your income probably isn’t on your radar as you’re just happy to be employed in the first place, right? Unfortunately, settling for less is a huge mistake that can cost you thousands of dollars over the life of your career.

A Hypothetical Situation – Where Would You Rather Be?

Think about it. Say you graduate at 22 and start earning $35,000. You shoot for $45,000 by the time you’re close to 25, figuring you now have enough experience to leverage. You then go for $55,000 by the time you’re 28. Sounds decent, right?

What if, instead of starting out lower, you snagged a job for $45,000 at 22? You’re already ahead of the curve. By 28, you could be asking for $60,000 – $65,000 instead of $55,000. Think of how much that difference could impact your life. You’d have an easier time paying off student loan debt, saving for a house, saving for a baby, or treating yourself to a yearly vacation overseas.

While I’m using hypothetical numbers, the point still stands. Increasing your earning power early on is critical to your ability to continue to earn more later on.

Don’t Make the Same Mistake I Did

My dad lost his job a year before I graduated college, and I felt pressured to get a job – any job – to help my parents make ends meet.

I majored in Criminal Justice. While I loved learning about it, job prospects weren’t that great. I didn’t want to become a cop, and getting my Master’s degree didn’t seem worth it at the time. The last thing I needed to do was add to my student loan debt. I had to focus on becoming employed.

I gave myself a few weeks after graduation to “enjoy life”, and then I began to scour Craigslist in hopes of finding something in the $10 – $12 per hour range. I had three interviews within a week, and took the highest paid position at $12 per hour. Unfortunately, it was salaried, which meant no opportunity for overtime (which was a mistake considering I stayed late many times).

I didn’t negotiate, either – yet another mistake many young adults (especially women) make. When you graduate from college, it’s easy to feel worthless. I looked through so many job listings and felt completely unqualified. It’s common to see companies asking for 3 to 5 years of experience for an entry-level position, and you’re left wondering how the heck you’re ever supposed to get experience when no one will hire you without it.

However, a company wouldn’t consider hiring you if you were completely worthless. When you get a second interview, they see some potential, or they wouldn’t be wasting their time. It’s up to you to get creative and show what you can bring to the table. Don’t be afraid to ask if there’s room to negotiate. Any reasonable employer will expect you to ask for more, as long as you’re not completely off-base with your request.

What Failing to Negotiate Your Salary Can Cost You

While we’re on the subject, let’s briefly talk about negotiating your salary. Negotiating can make or break your earning power just as much as getting a low-paying job out of college. It can mean the difference of earning $5,000 or more per year, compounded over your entire career.

For example, this article from Fast Company states that women stand to lose out on $500,000 by age 60 if they fail to negotiate their salary at the first job they hold. That can apply to anyone who isn’t proactive about earning more.

$500,000 is a lot of money. Is not asking for more worth that loss? Besides that, if you stay with a company for 5 years (which isn’t very typical anymore) without getting a raise, and the cost of living continues to rise, you’ll have a tough time affording basic necessities.

Don’t put yourself in such a situation. Get comfortable negotiating and know your value ahead of time so you can approach an interview with confidence. Negotiating your salary doesn’t make you demanding and it doesn’t reflect poorly on your character.

If an employer is against negotiating, or if you know the salary they’re offering is lower than the average salary offered for the particular city the job is in, then they’re likely not worth working for anyway. You want an employer who can recognize your value and reward you for it. You don’t want to have to wait years for a raise. Don’t shortchange yourself.

How to Focus on Earning More Out of College

I know it’s easy to say you need to go for the bigger and better jobs, but when opportunity is seemingly limited, how do you succeed? This was a question I often pondered as I saw my peers begin to pick up freelance gigs here and there a few years ago.

I was finally earning $14 per hour after working for two years, and was still dissatisfied. Overworked and underpaid had become my motto, yet I didn’t do anything to change it. I accepted the situation for what it was and figured I’d never earn more than $60,000 per year.

That’s the worst mindset you can be in. If you’re not happy with your current salary, you need to get it in your head that you can improve it. Don’t seal your fate like I was tempted to do. There are opportunities out there for everyone if you’re looking for them.

First, I recommend networking. That’s another thing I failed to do after college. Most of my friends were interested in becoming teachers, which didn’t help me. Stay in touch with people from college, especially those in your major. You never know what may come of a connection, and being recommended by someone will make the interview process go smoother.

Second, always continue to learn. Figure out what you’re passionate about, where you want to work, and what you want to do. Sure, this may change down the road, but knowledge is always valuable. Pick up skills and experience that employers value.

Third – and this goes along with the bit above – don’t be afraid to work on your skills (or passion) outside of a job. For example, I began blogging back in 2013, and I’m now a full-time freelance writer. However, I started for free. I never set out to be a freelancer or to earn a cent from my blog. Luckily, the skills I learned from blogging (and the networking I did) helped me launch a completely new career that also happens to pay more. If you’ve been thinking your hobbies are too trivial to devote time to, you might want to think again.

Additionally, this helps you gain that elusive experience. You can totally re-work something like this and put it on your resume. I’ve learned how to manage social media and use the WordPress platform (among other things), which can be valuable to any number of employers. My blog also serves as a portfolio and proof of what I can offer. Don’t underestimate what you can offer.

Lastly, I don’t recommend working for free for long. You can always turn your hobbies or skills into a side hustle to earn more alongside your day job. If earning more money is your goal, then polish your skills and put them to work! I started off earning hundreds per month, but after a few months, it became thousands. I’ve seen many friends start off with side hustles that have blossomed into self-employment. You just have to keep your eyes on the prize and constantly work toward that goal.

Don’t Lose Out on Potential Earnings

You may not be very confident in your ability to earn more when you graduate from college, but don’t stay stuck in a low-paying dead-end job forever. It might take a move, it might take learning extra skills on the side, and it might take a lot of networking, but there are opportunities to be had in the places you least expect it.

You can cut back your expenses all you want, but there’s no limit to how much you can earn. It’s foolish to get stuck in such a self-fulfilling prophecy where you think you’re destined for a cubicle or a $12 per hour desk job the rest of your life. You have the power to change it – start now.

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