KNS Financial

Personal Finance From a Biblical Perspective

How To Ask For A Pay Raise

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Even with the improving job market, asking for a raise can be a scary event. Many companies don’t want to give them at all, and it always seems as if there is a long line of candidates willing to work for even less money than you’re being paid. Despite those concerns, there are times when you need to ask for a raise. After all, if you don’t, then it may never happen. And the days of automatic annual increases is largely gone.

How To Ask For A Pay Raise

If you are going to ask for a raise, try the following…

Know what you’re worth before you even ask

Before you even ask for a raise, you first need to know where you stand on the compensation ladder. You can easily do this by checking out the pay range for your job based on information available at the Bureau of Labor Statistics website. It not only lists pay ranges for your job, but also takes geographic location into account.

If you find that you are at the top of your pay scale – or even above it – tread lightly. Unless you are extremely valuable to your employer, you may find that bringing up the salary issue works against you. Your employer is probably aware of where you stand in the pay range for your job. If they have no intention of increasing your pay, they may take advantage of the opportunity to gently remind you of your over-paid status – ouch!

Ask For Pay Raise

Be aware of industry trends

Beyond compensation ranges, never ignore trends within your industry. If your industry is growing, and jobs are plentiful, there will be a lot more negotiating room with a pay increase.

If the industry is growing slowly, or not at all, your ability to get a raise will be directly related to your specific contributions to the company. It should go without saying that if your industry is in decline, and jobs are disappearing, it may not even be worth asking for a raise.

The state of your industry, or of your particular job classification, is probably the best indication of your ability to get a raise.

Put together a thick file

Unless you are a recognized superstar in your company, you have to be your own best cheerleader when it comes to asking for a raise. That doesn’t mean you go running around the place taking every opportunity to chant yeah, rah, me!, but you will need to build a case for why you deserve a raise.

Put together a file that represents a collection of your best accomplishments on the job. This can include letters or emails of commendation, proposals that you made that were put into action, positive previous job reviews, and any records that document your production or increase in productivity.

You don’t need to bring this into your boss or human resources manager when you ask for a raise, but you should have it available for at least three reasons:

To prepare you to blow your own horn. Before asking for a raise, you should spend some time rehearsing the reasons why you deserve one. This will be much easier to do if you have assembled tangible evidence that answers the question. By having all of the information available in one place, it will be much easier to convince yourself that you deserve a raise – and that will make it easier to convince your boss.

To be ready to document your accomplishments to your company. It’s always a good idea you have documents to prove your worth to your employer in the event that you meet with any resistance in your request for a raise. While your boss and your company probably know somewhere – usually in the back of their minds – what you have done for them, it always helps to have a thick file to show them just in case their minds go fuzzy when you’re ask for a raise.

To be certain that you have accomplishments. That sounds a bit tongue-in-cheek, but it’s a valid consideration. If you can’t document your accomplishments, your boss probably can’t either. And if you can’t, asking for a raise may be a waste time. But it is better to know this before going to your boss. If nothing else, this should serve as a wake-up call for you to begin increasing your productivity, so that you will have some ammunition to ask for a raise in the future.

Approach it as a business discussion, not a request for more money

This is an exercise that is not as easy as it sounds on the surface. Whenever we ask for something for ourselves, there is more than a little bit of emotion attached to it. Since salary is an objective measure of our worth, the potential of being rejected for an increase is hard not to take personally.

But that is exactly what you need to do.

When you approach your superiors about a raise, you have to handle it like a business negotiation – which is exactly what it is. This is also a major reason why you should prepare a thick file packed with documents that prove your worth. If you can prove why you deserve a raise with objective evidence, you can present this evidence as you would any other business proposal.

If your employer rejects your request – despite the evidence – then you’ll know where you stand. At that point, your focus may shift from getting a raise at your present employer, to finding a job with a new one.

Have you used any of the above strategies in asking for a raise?

photo credit: freedigitalphotos.net

Financial Blessings – Reader Stories

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I recently posted a story about one of the many financial blessings that I have received in my life. It was inspired by a number of people who were anonymously paying off the layaway balances for random Kmart shoppers.

We are constantly bombarded with stories of corruption in financial institutions, people taking advantage of the elderly, and companies ripping off their customers for an extra buck. Then there are all of the negative personal interactions that we have in our own lives. Because of all of this, I thought it would be nice to hear about people helping each other out financially.

I asked the readers of that post to leave their stories of financial blessings in the comments.

Your Financial Blessings:

Tim @ Faith and Finance – “I remember when a guy from my home church sponsored me to go on a missions trip right before I started college. I didn’t have any money at the time and he asked if I wanted to go on the trip. I said, ‘yes, but I don’t have any money to go’ so he said ‘you’re going’ and paid the cost to go. I’ll always remember that.”

Shanendoah @ The Dog Ate My Wallet – “In highschool, I participated in an exchange group, where kids from Spain came to live with us for 2 weeks and then we would go live with them for 2. Sadly, while we could host, my mom couldn’t afford to pay for me to go. So the school in Spain paid $1,200 of the $1,500 cost, and my mom got to send me to Europe for $100/week.
I will always be grateful for the teacher who arranged that “scholarship”.”

Jeff @ Sustainable Life Blog – “I’ve only been that bad off once, when because of practices now outlawed, I spent about 80 cents more than I had in my checking account – of course, these were of varying sizes, but they put the large transaction through first, not leaving money for the other transactions to clear. I quickly got about 8 overdrafts (or more) and was charged a negative balance fee for my account on top of it all. by the next time I would have gotten paid, it would have taken up my entire check – nothing for food or rent or ANYTHING else.
My dad paid it off and I closed the account, but not after he called me a moron and suggested I get a handle on my finances. That moment was probably the turning point in my finances – i still slipped up after that, but it’s been going mostly up since.”

Elle @ Couple Money – “When I was growing up, my mom’s car broke down and needed a engine. As a single parent with 3 kids on a tight budget it was a bigger emergency than she imagined. A friend came through and offered a gift for a portion of the repairs and a no interest loan for the rest. It allowed my mom to continue working. A real blessing for our family that I never forgot.”

Jai Catalano – “I recently was in a financial bind and entered a video competition and won. I never expected to win nor get blessed with a $1000 prize.”

Pam @ Penny Saver Blog – “I remember feeling really blessed when my husband and I were first married. We didn’t have very much money but we were close friends with one couple who continually blessed us by giving us food, taking us out to eat, and being so unbelievably generous to us. It really meant a lot to us during those tight financial times. It’s so cool how God works through others around us at exactly the right time!”

Amanda L Grossman @ Frugal Confessions -“By the way–my sister and her husband were one of the beneficiaries of the Kmart person!! They had $180 of their layaway paid for them by an anonymous person.”

Ryan @ Budgetable – “This isn’t exactly “my” blessing, but a friend of mines. About a year ago he was going through some really hard times. His wife had just left him for another man, he lost his house, car…his new laptop got stolen… it was really raining hard on him. This was all within probably a 3 month span. Anyways, he got behind on his electricity bill and they shut it off. We live in Colorado and this was during the winter… heat is a MUST. He had no money to pay the bill and wasn’t sure what he was going to do. After being in the dark and cold all weekend suddenly his electricity just turned on. He called the electric company to find out what had happened. Turns out a person who wanted to remain anonymous paid his bill. He said it changed his life… after what he went through the past few months, he had been convinced the whole world was terrible.. that made him realize that there were still good people in the world.”

I think it’s inspiring to see that people are still interested in helping those in need. I think one of the common themes in all of these stories is that the recipients will not forget what was done for them! This shows us why it is so important to take notice of those in need.

photo by Salvatore Vuono

Unexpected Financial Blessings…What’s Your Story?

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I came across an article today about anonymous donors paying off layaway balances for various Kmart shoppers. As you can tell from the Kmart Black Friday 2011 ad, they offer a ton of great merchandise around Christmas time!

It’s amazing to consider that people still desire to be the source of these types of unexpected financial blessings! Of course, we know that God is the true source of all blessings…

Do not be deceived, my beloved brethren. Every good thing given and every perfect gift is from above, coming down from the Father of lights, with whom there is no variation or shifting shadow. ~ James 1:16-17

However, God still uses willing hearts to help bring financial blessings (and other kinds as well) to His children. I’ve had people come through for me on many occasions, and I was grateful for every one – no matter how great or small the gift.

Even though the bible constantly warns us about misunderstanding the true value of possessions, we are still commanded to help those in need.

What Were Your Unexpected Financial Blessings?

Reading this story made me want to hear about more stories of people receiving financial blessings that were unexpected. So, I want you to share your own experiences. I’ll start with one of my own.

A long time ago I had a little bit of trouble with my driver’s license. Because of this, I needed to pay off my financed car immediately. The only thing is that I was broke and I still owed $2,000 on the car! If I couldn’t come up with the money in a short period of time (like a week or 2), they would repossess the car.

My wife (who was just my girlfriend at the time) told her best friend about my problem. He then offered to give me a loan for the full amount and allow me to pay it back over 8 months without interest! My car payments were about $241/month, and I was able to pay him back at $250/month.

I had met him a few times and we were cool, but I wouldn’t consider us friends at that point. However, he still felt moved compelled to help me with such a large gift. At that time I was working full time and I went back to school – I couldn’t afford to have my car repossessed. His generosity really helped me get through a very tough time.

Once we pay off debt, one of our goals is to set up an account for this purpose. We always want to be in a position to help others. This is another reason why I hate being in debt bondage!

Share Your Stories Of Financial Blessings

Now it’s your turn. Share how people have come into your life and helped you out when you were in a financial jam.

I really think that stories like this can encourage people to be more helpful when others are in need…even if they are complete strangers!

I may even take the comments that are left here and put them in a future article.

photo by Michal Marcol

Pay For Spray: Firefighters Let Another House Burn Down Over $75

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Some of you may remember the story about firefighters allowing a house to burn and pets die over $75 last year. Well, the pay for spray policy strikes again. It happened once again with the South Fulton, Tennessee fire department.

Another homeowner was forced to watch their house, and many possessions, burn to the ground, all because they didn’t pay the $75 “pay for spray” fee (known as a “fire subscription fee”). And, according to reports by WPSD, firefighters were right there watching as well.

Were The Firefighters Wrong?

The point of this article isn’t really to debate the actions of the firefighters in this particular case, but if you want to know my opinion, you have to read what the article revealed about Vicky Bell (the homeowner) first…

Bell and her boyfriend admitted they were aware but thought this would never happen to them.

They knew what the policy of the South Fulton fire department was, but they choose to ignore the fire subscription fee and simply take their chances. Now that their terrible gamble has come back to hurt them, they want the rules to be ignored and everyone to feel sorry for them.

I have sympathy for them because I know what it is like to make a horrible decision and live to regret it. However, they have no right to blame anyone else for their circumstance. They intentionally ignored the fee, and now they have to deal with the consequences. This is similar to the recent phenomenon of elderly foreclosure “victims” (although, sometimes even Bank of America foreclosures go wrong).

The Need For A Pay For Spray Policy

Since some of the rural areas in Obion County are too small to be able to support a fire department of their own, the city of South Fulton is kind enough to make their firefighters available to them. Instead of the residents seeing an increase in their property taxes, they are simply asked to pay an annual fire subscription fee of $75.

This way, they are helping to offset some of the operating costs of the fire department – especially since they now have the added responsibilities that come from servicing other areas. If someone doesn’t want to pay to support the fire department, then they don’t have to.

The mayor of South Fulton, David Crocker, stated that if they do not collect the fire subscription fees, then they can’t survive. He also noted that if they make exceptions to this rule, no one will ever pay the fee.

The Moral Dilemma With Pay For Spray

If a homeowner doesn’t pay the fee (whether by choice or if they forgot), then they are not able to access the services of the fire department for that year.

It is quite common for the residents of a rural community to pay a fee to the fire department of a nearby city, in order to secure their services.

As with the case of Gene Cranick in 2010 (the article I linked to above), the firefighters were simply following the rules and obeying orders. I’m sure that it was extremely difficult for them to fight their natural instincts and training, in order to properly carry out their duties.

The moral dilemma is simply the fact that they had to stand by and watch a home burn to the ground. They were not able to help by putting out the fire, or even trying to save some of the home owner’s possessions.

Every time someone who didn’t pay the fee suffers loss from a fire – and the fire department didn’t help them – there is a public outcry. Many people talk about how immoral and despicable the firefighters were, and declare that they should have helped the people despite their refusal to pay the fee when it was due.

A debate naturally ensues, between those who feel that the homeowner shouldn’t expect to get a service that he refused to pay for, and those who feel that the firefighters should have risked their jobs and lives no matter what!

I can see both sides of the argument, but I think there is something else which must be considered first.

Pay For Spray And Insurance

Here is what I wrote last year when making this comparison:

This is no different than insurance: You pay a fee (premium) for protection from a future event that may or may not happen. If the event happens, you’re covered; if it doesn’t, you don’t get your money back. No insurance company will let you wait until your house burns down to take out a policy! You must have the coverage BEFORE the incident.

Since Vicky Bell (the homeowner), decided not to take out a policy, she wasn’t eligible to file a claim  [on the service] when she faced an emergency! I can’t get into a car accident without insurance, but then expect an insurance company to provide me with their service during an accident (even if I tell them that I’ll pay on the spot)! There are smarter ways to save money on car insurance.

You can’t have people decide not to pay, but be given the option to pay the fee at the time of an accident. As, Mayor David Crocker stated, doing this will remove the incentive for people to pay beforehand. This would ultimately lead to the fire department not receiving enough funds to cover the additional operating expenses associated with adding new towns to their responsibilities (unless there happens to be an abundance of fires in the rural communities).

Whether it’s home contents insurance, natural disaster insurance, hurricane preparedness, or any other consumer insurance information or coverage you can think of; you need to ensure that you are prepared for the worst (even if you plan to use an emergency fund to cover damages) at all times. Having regrets and trying to pass the blame won’t help you get through a disaster!

I think we can find a way to satisfy the insurance element of it being optional, as well as the moral dilemma that comes when “uninsured” homeowners are in danger of losing their homes.

How To Fix Pay For Spray

Treat it like other emergency services. There are two emergency situations which immediately come to mind. Health problems dealt with in the emergency room of a hospital, and roadside assistance.

The great thing about both health insurance, and roadside assistance is that they greatly reduce (and in some cases eliminate) the costs associated with the emergency service. In both of these cases, you are not required to buy insurance ahead of time (this maintains the “optional” quality of the pay for spray fee).

However, if you need emergency treatment or to have your car towed, you can still access the service, but you will be charged the full cost!

The same can be done with the pay to spray fee. Give homeowners the option of paying the $75 premium at the beginning of the year. If they choose to pay it, then they will be covered for the full cost of the fire department services they consume during that year. If they don’t consume any, they don’t get their money back; as is the case now.

If someone who chooses to forgo coverage has their home catch on fire, they can still receive the service, but they will be charged the full cost! I am not sure what it costs to send a team of firefighters with trucks and expensive equipment to put out a fire, but I’m sure it’s a lot more than $75.

This way, we will never have a case where firefighters watch as a house burns to the ground. Also, most homeowners will choose to pay $75 each year for a service they most likely will not use, rather than pay thousands or tens of thousands of dollars when they actually need it.

Before the firefighters put out the fire of someone who refused coverage, that homeowner would have to agree to it. If someone doesn’t want to pay all of that money, they can choose to let their home burn to the ground.

There are probably two objections to this stipulation:

What If A Neighbor’s House Is In Jeopardy?

If there is a chance that the fire will spread to a neighbor’s home, then it must be put out, no matter what the desire of the uninsured homeowner is. They will then be billed for the full cost.

We have to make sure that one uninsured homeowner doesn’t cause a financial burden for his neighbors. This is why many states require car owners to have at least liability coverage on their vehicles.

What If The Homeowner Isn’t Home?

If the uninsured homeowner isn’t home and their house catches on fire, the fire department will automatically put it out. This will guard against it spreading while they are waiting for them to come home. Also, this is necessary to ensure that there are no unresponsive people trapped inside.

If someone was unconscious and in the middle of the road, they would immediately be rushed to an emergency room. No one would sit around and wait for them to wake up so they could be asked if they want to go, and if they agree to pay whatever the costs are.

We would do the same thing for an uninsured home that caught on fire. Err on the side of caution and take care of the emergency, even when it’s not 100% clear if the person actually wants help.

How Would The Fire Department Guarantee Payment?

This would be handled as any other unpaid debt. First, it would how up as a negative record on their credit report. Then, the fire department would simply put a lien against the house, for the amount of the debt as well as any debt-collection costs.

Think about what would happen. If he wasn’t willing to pay for the service – meaning that he was willing to lose his house and have it burn down – then he would just lose his house to the fire department instead of to the fire.

Most likely, they would have some level of insurance on their home. It can be mandated that the fire department receive their payout directly from the insurance award, unless other arrangements are made ahead of time.

On the other hand, if he actually wanted to have his house saved, he would be willing to work out a payment plan with the fire company. Then none of the debt collection measures would need to take place.

Having these procedures in place would encourage most of the residents to agree to the $75 fee (or insurance premium), since they understand the consequences. It would also ensure that no one who wanted or needed emergency services would be deprived of them, even if they don’t initially buy the coverage.

It also allows the fire department to be able to receive enough money to extend their area of service, and be fully reimbursed when they have to provide their services to someone who chose not to contract with them.

photo by dvs

What Do You Think?

  1. Do you think the firefighters were wrong for not ignoring the regulations and their orders?
  2. Should the homeowner(s) be held fully responsible for this loss?
  3. What do you think about this proposed solution to the pay for spray policy?
  4. Do you live in a town that has to contract with another city for emergency services? If so, has this ever happened?

Financial Tips For Living With Friends Or Relatives

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Living with friends or living with relatives can be a great help, when you run info financial trouble (especially when you are trying to pay off debt). However, if certain financial details aren’t agreed upon in the beginning, you can run into an extremely stressful situation, which may threaten to ruin the relationship.

Here are three major financial concerns, which should be addressed before you consider living with friends to be a viable option. These items should be important to both the one in need, as well as the one extending the help.

How Long Will You Need To Stay?

The first thing that needs to be worked out is how long you plan to live with your friends or relatives. Whether it’s for a few weeks or six months, you should be able to give them an estimate on how long you will need to stay with them.

Think about it…if your “host” thinks that you are only staying for a couple of months in order to save up for, and find an apartment, they will handle things in a certain way. However, if you actually plan to say there until you go back to school to finish a degree – and you’re only a sophomore – then that might change things a tiny bit!

Living With Friends Calendar
photo by Renjith Krishnan

 

If you need to stay for a year while you finish a degree or training program, or even if you are just trying to stabilize yourself while you get out of debt, state that from the beginning so that there will be no misunderstandings down the road.

Of course, you can’t always be sure of what will happen in the future, but, it is still extremely important that you both be on the same page with this.

If you feel that you will need to stay longer than you originally estimated, make that known as soon as possible. Just be sure that you are always keeping your host in the loop whenever your situation changes.

How To Split Up The Bills When Living With Friends

This is probably the most important conversation that you can have with your future host (because they are probably wondering, how will this affect my finances). There are a couple of reasons why this is so important:

First, if you simply pay what you think is a fair amount, then it can lead to negative perceptions and resentment. If you pay too little, it can make your host feel as though you are simply taking advantage of them, and that you really do not appreciate their help!

For the entire time that you are living with friends, they may resent every time you spend money – no matter how little it is. If you are throwing them $300/month, and then go out and buy an iPad 2 or Kindle, they may have a serious problem with that!

However, if you sit down with them and agree on a fair amount for you to pay, then they may not mind as much when you go out and buy a new laptop (although, that may not be wise if you are there because you are in financial distress and trying to pay off debt)!

The second reason why you need to come to an agreement about who pays what is because your presence will increase the household bills! You are sucking up all of their electricity, heat, cooking gas, water, and other utilities, and you need to be mindful of that!

You should sit down with your host and decide how you want to break up the living expenses before you move in. You may decide to pay for all of the utilities, while your host pays the rent/mortgage entirely. Another option would be to simply pay them a certain amount for rent each month.

Of course, you can decide on a myriad of combinations – you pay gas/electric and buy food, while they pay cable and rent, for instance – but the point is to avoid having any misunderstandings or bad feelings at some point in the future! It would be a good idea to write out an agreement with these details included – simply for clarity.

Discuss Your Financial Plans

I think this one can be optional, depending on the relationship. When living with friends or relatives, it may be extremely helpful for you to discuss your financial plans with your host. If you need to funnel all of your extra money into student loan repayments, or any other category, be sure to make that clear – especially when discussing how to split up the bills.

This can help to avoid any misunderstandings or resentment toward how you handle your money while living there. Also, if they are going to allow you to stay in their home for free, it would be great to show them that your plans include paying them back once you get on your feet!

Remember that communication is key in situations like this! Living with friends or even living with relatives can cause a lot of unspoken problems and tension, and you need to do everything in your power to prevent this from happening!

photo by AR Mclin

Reader Questions

  1. Have you ever had to live with relatives or friends due to a bad financial situation?
  2. Have you ever had to take someone in as a result of bankruptcy or debt (or any other misfortune)?
  3. If you were to be on either side of this arrangement, what other financial issues would you discuss?

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