3 Career Mistakes that Will Cost You MoneyMar 16, 2022
Yesterday, March 15th was "Pay Equity Day" as in the day when a woman's pay catches up to what a white man was paid the previous year. The average white woman had to work an extra 74 days to catch up to a white man's pay. Black & Latinx Women have to work far more into the year to get to pay parity, in fact as a result of the global pandemic, Latinas Pay Equity Day is December 8th! Reviewing these staggering numbers made me curious about pay gaps for first-gens and came across data that is maddening. It also inspired me to reflect on some of career mistakes I've made and see other first-gens make that cost us money AND detract from our ability to build generational wealth.
Though the term "first-gen" is used to mean different identities, in this instance I'm referring to first-generation college graduates. According to Pew Research, "Second-generation college graduates have substantially more wealth than first-generation graduates." How much more? On average, the income of first-gen college graduates trails behind second-generation graduates by almost $100K!
When you consider the debt that most first-gen college students accrue in the pursuit of that degree and how we help our families financially because we're the first to gain substantial economic mobility, our ability to use this income to build wealth is even lower. Unlike the wage gap which is a direct result of gender discrimination, this gap is due to the access and opportunities that a college education creates, and its impact over generations. If you grow up in a household with a parent that graduated from college, you're more likely to learn the skill of navigating the work world AND you inherently believe you're deserving of opportunities instead of that first-gen worry that you're an imposter or not good enough.
There are 3 MAJOR MISTAKES that I've made personally and see many first-gen graduates make that impact our earning potential and therefore lower how much we're able to save & invest in building wealth. Here they are along with what to do instead:
1. Invest in Graduate Degree Out of Pocket - when I was at the peak of feeling stuck & unhappy in my career, I went "back to school" to pursue a master's degree which I used to pivot to Corporate America. Had I done more research, invested more time in reflecting on the different ways to get to that next career path and searched for different job opportunities, I could've landed in the same entry-level HR role that I landed with a master's degree that cost me $35K (which I paid for with student loans).
Here's the thing, there are some careers that require that graduate degree, but the majority do not. I see many first-gen college students pursue a graduate degree right after undergrad, mostly as a way to defer entering the workplace because they're unsure of what they want next or they're not prepared for the process of getting a job. Why incur additional student loan debt when you're not sure what you want to specialize in?
Instead of investing in an extra degree before you know you gain work experience that should inform what you should specialize in, invest your time and less money in the following:
- Certifications that sharpen your interpersonal skills like emotional intelligence or technical skills that will come in handy in any job like understanding PowerPoint and Excel. Check out sites Udemy for affordable online training courses.
- Trainings that will teach you about the field and show you want it'll take to do the job. For example, instead of getting a master's in project management, join a Google Training on Project Management. Check out Google's Career Certificates.
- A Career Coach that can help you explore career paths and effectively prepare to get that first or next, high-paying job! I'm not just suggesting this as a shameless plug; I genuinely wish I knew about Career Coaching earlier in my own career because having someone guide me would've been a game and pocket changer! Book a Discovery Call with me if you need this guidance.
2. Stay in a Job Too Long - my first job out of college paid me $40K which I thought was major money because I grew up poor. When those student loan payments kicked in, I started helping my mom pay bills and I stupidly incurred a new car payment, I quickly realized that wasn't going to help me build the life I had imagined for myself. But because I didn't know what I wanted to do next, I stayed there for 4yrs, making the same salary. That's 4yrs where my earning potential was stagnant, I wasn't saving or investing. Such a rookie mistake! Except, I see first-gens in my network now that continue to stay in jobs even if they're unhappy, not making as much as they should or in a toxic environment. I recently came across a stat that people who stay at a company for more than 2yrs earn 50% less than their peers who jump ship to another company.
If you're not getting substantial raises & bonuses to will help you build wealth then you should either 1. find another job asap - on average you can make 10-25% more on their base salary by job hopping OR 2. create other streams of income through side hustles or money generating hobbies (my bestie Jenny loves her FT job AND she loves art so she started doing calligraphy as her side hustle).
3. Shy Away from Negotiating for More Pay - when you're the first to make what feels like a lot of money, you're so grateful for those opportunities that sometimes you think you can't ask for more. You can. You should. You need to. Whether it's your first job, next job, annual raise, bonus or promotion increase, you need to get comfortable asking for the pay that matches your experiences, expertise and performance. The worse they can say is NO but if you don't ask, the answer is automatically NO.
I understand deeply how uncomfortable it can feel to talk about money, especially when you don't come from money and have limiting beliefs or a scarcity mindset. However, it is a detriment to your financial well being, your family and future generations not to maximize your earning potential. To get more comfortable, do your market research (what's your value outside the company?), learn how compensation works in your organization (this is where mentors & sponsors come in), and develop a trusting relationship with a work buddy so you can openly share salary information (we need to destigmatize not talking about this because that's how we are blinded by the inequities).
If you're a first-gen Latina, please join THIS Latina Pay Equity (free) Event hosted by 100 Hispanic Women; I'll be facilitating a workshop on "How to Negotiate Your Worth."
Money Matters. It especially matters when you're the first to make substantial money, the conduit for economic mobility. The more money we can make, the more wealth we can build, the more agency, freedom and power to influence change.
So let's make that money! $$$