The 3 worst career moves you can make for your money

Brian Acton


Brian Acton

Brian Acton

Contributing Reporter

Brian Acton is a contributing reporter at Policygenius, where he covers personal finance and insurance news. His work has also appeared in The Wall Street Journal, TIME, USA Today, MarketWatch, Inc. Magazine, and HuffPost. 

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Just because you’re a working professional doesn’t mean you’re earning at your full potential. One career mistake can compromise your finances. Unfortunately, poor financial decisions abound in the modern workplace.

Don’t jeopardize your future by making the wrong move. Here are three of the worst career moves you can make for your money.

1. Not negotiating your salary

Negotiating a higher salary during the hiring or performance review process is the best way to maximize your earnings. Not only will a higher salary equal a bigger paycheck, but also bigger future percentage-based raises, which will build on that amount. Whether you’re about to start a job or ask for a raise, it’s in your best interest to negotiate.

But many people never attempt to negotiate their salary. According to Jobvite, only 29% of job seekers negotiated their salary at their current or most recent job and 47% don’t feel comfortable negotiating at all. While negotiation is tricky and you shouldn’t overplay your hand, it can mean the difference between an acceptable salary and an exceptional one.

“The biggest mistake you can make is not negotiating. This has implications that can last for the entire duration of your career. If you’re underpaid from the start, you’ll continue to be underpaid — even when you’re given a raise or a promotion,” said Ashira Prossack, founder and CEO of The Generational Factor, a company dedicated to bridging the generation gap and helping businesses prepare for the future of work.

“This is especially detrimental to your finances if you plan to stay with a company long term, as it’s harder to re-negotiate and get a substantial salary increase internally,” Prossack said. “You don’t want to be forced to leave a company that you love just to get a higher salary.”

2. Not saving for retirement

Retirement savings should be a priority for all working Americans, Social Security and Medicare face a funding crisis. But Americans aren’t saving for their retirement aggressively, or in some cases at all. Retirement plan participation is particularly low among working millennials — the generation born between 1981 and 1991 — 66% of whom have nothing saved for their golden years.

The reasons for low retirement savings may include stagnant wages and a lack of employee awareness. But retirement savings are essential for everyone, and in some cases your employer may help you save.

“Many employers that offer a retirement savings plan, such as a 401(k), will match the employee's contributions up to a specific percentage of the employee's salary, which is usually around 3%,” said Ryan Firth, a certified public accountant and president at Mercer Street, a financial and tax services firm.

“Essentially, the employer is giving the employee a form of bonus compensation by matching a percentage of the employee's contributions to her retirement savings plan,” Firth said. “From the employee's perspective, it's like free money! So if the employee isn't contributing up to at least the employer's match, then she's losing out on ‘free money.’”

3. Choosing a career for the money only

Choosing your career based on salary might be one of the worst money moves you can make. If you’re only seeing dollar signs when you accept your job offer, you may end up in a career you hate. In that scenario, you might be looking for an exit strategy sooner than you think.

“It's important to do your due diligence before moving forward with any job offer because the money may be good, but you may not be happy in the long term,” said Firth. “Conversely, the money may be less than you'd like, but if the job is a good fit, you're more likely to enjoy your work, which usually predicts higher job performance (and hopefully a commensurate increase in pay).”

Salary is only one part of the picture. Compensation also includes benefits that directly impact your wallet.

“Not taking into account the value of company benefits such as health care insurance, disability insurance, life insurance, etc. when considering a job offer,” is a big mistake, said Firth.

Image: PeopleImages