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Today’s post comes courtesy of fellow S&S reader, Amanda. She’s going to explain why you should be tracking your income through the years.

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Tracking Your Income Growth

In society, we focus a lot on saving money and budgeting to make sure our money goes as far as it can. These are noble and important causes, but they cause us to forget the other side of the financial coin: tracking the growth of our income.

Tracking your income is important. It makes you mindful of the ways you can grow your income. And really, when you’re watching your expenses and saving all you can, increasing your income is the only way to give you a happier financial situation.

And it doesn’t have to be hard to grow your income! If you’ve been a reliable employee, you can absolutely ask for a pay raise. And if you’ve provided great service as a freelancer or business owner, you are well within your rights to raise your prices.

Real wage rise

Every worker should understand the concept of inflation. Even if your hourly rate increases, you have to realize that the cost of living goes up and down. And those costs of living increases can nullify your wage increases.

You don’t have to become an economic expert to calculate how much you’re really making and the effect of the weekly grocery shop has on your earnings. However, it would be prudent of you to study the effect of the basics, like food, clothes, and fuel.

For example, if your employer gives you an increase of $0.50 an hour, over the week you’ll make an extra $20 (assuming 40 hours per week). But if the cost of your living expenses has also increased by $20 per week, you’re just breaking even with your raise. It’s like you’re not really getting any raise at all. Your employer’s just balancing out what the competition and the wider economy is doing.

In black and white

A surefire way to track income increases is to put them in black and white.

The digital age has brought us a little disconnection from our income, since payments go directly into our bank accounts. If we want to confirm that we’ve received our paycheck, we have to remember to check with our bank.

But you can actually ask your employer to give you notification of each paycheck. They can first create pay stubs online free, using any of the templates offered, and then send it to you digitally.

Your pay stub will have details about your hours worked, payment for said services, tax deductions, dates, and money you are owed or have been paid. It’s a simple way of tracking your wage progress and spotting any improvements.

Then track your increases over time using a simple spreadsheet. It’s incredibly satisfying to see your professional growth reflected in your increased income over the years. And if you’re income isn’t surpassing inflation by as much as you would like, you’ll notice and you’ll be able to take action to change that!