There are plenty of great reasons to request a raise at work—your compensation doesn’t match your experience, you’re consistently exceeding expectations, etc. Asking for a raise to fix your financial issues is not one of them.
Despite popular belief, more money is not always the solution to your financial problems. In fact, more money has a crazy way of magnifying existing problems for those who don’t understand the basic tenets of personal finance.
Case in point: former NBA All-Star Antoine Walker.
In February of 1999, Walker signed what was at the time the biggest contract in the history of the Boston Celtics: a six-year, $71 million extension. In 2010, he filed for bankruptcy.
Since then, Antoine has served as a poster man for financial irresponsibility. It wasn’t because he lacked sufficient income (he had enough money coming in to float a legion of small businesses). He was in financial trouble because he wasn’t resourceful, he ignored cash flow management and he felt abundant enough to become blissfully, and dangerously, unaware of his financial situation.
“But I’m not Antoine Walker,” you say.
“You’re right,” I reply.
“That would never happen to me,” you say.
“You never know,” I respond.
Believe me when I say that experienced financial experts everywhere have witnessed a similar Antoine Walker-esque phenomenon on a much smaller scale. Sometimes it’s a client who secures a raise and suddenly feels abundant enough to continue living beyond his means. Other times it’s someone unsuccessfully pursuing a raise who decides to place the blame for her financial mess on her employer, thus surrendering ownership of her financial problems (equally as dangerous).
The moral of the story is this: If there’s a hole in your bucket, the long-term solution is not to dump in more water. Yes, your water level will rise momentarily. But if you never repair the hole, eventually your water will all come trickling out.
But let’s not end on such an ominous note. It’s never too late to repair the bucket, to gain control of your cash flow, to create a budget that will enable you to save at your current income level—and to flourish when that income increases. This is the essence of financial wellness.
So go forth and demand your raise; but do it for the right reasons. If you do, you might be faced with an entirely different kind of dilemma: finding a second bucket to catch all of the overflow.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.