Career Planning

5 Financial Steps To Take After Getting A Raise When you get a raise at work, consider how you can maximize your earnings to identify new financial opportunities. If you’ve recently received a raise, congratulations! You worked many long hours to deserve this, and now your hard work has paid off. Whether this pay increase was expected or whether it was a complete surprise, you may have many thoughts running through your mind, including calling your spouse or your Mom, deciding what restaurant you are dining at for a celebration, or how your new salary will give you more freedom to take that vacation you’ve been wanting to go on. While you should be excited, it’s important to take a step back to reassess your new pay and how it impacts your financial situation. Without doing so, you might find that your raise is more harmful than when you were making less money. To avoid having “raise-regret”, consider these five tips. 5 Things To Do After Receiving A Raise 1. Understand your new salary. While you deserve to celebrate, you may want to hold off on making any large purchases that were unplanned and not saved for with your new cash flow. Unlike a bonus, where you receive a lump sum, your raise is going to be broken out across all pay periods. Additionally, your raise is going to be stated as an increase to your gross pay. In other words, if you receive a $5,000 annual raise, that does not mean that you are pocketing $5,000 over the course of the next year because we have to pay taxes. If you aren’t familiar with the amount of taxes you pay, it could be worthwhile to check your last few pay stubs to determine how much was going to taxes versus how much you were keeping. Also note that depending on the amount of your raise and the time of year, it may push you into a higher tax bracket. You may want to speak with your Human Resources and Payroll departments to discuss your tax withholding, as well as an accountant or qualified tax professional to see how your increased earnings could impact your personal tax situation. 2. Increase your retirement savings. If your employer offers a 401(k) plan and matches your contributions, you should consider contributing at least enough to get the full match amount. Granted that you were already doing so, or that your employer does not offer a match, increasing your retirement savings may still be a great option. And, for those who are comfortable with their lifestyle prior to receiving a raise and don’t plan to make any changes, you can supercharge your raise by increasing your savings rate at an equivalent rate to your bonus. Determining how much you need to save for retirement will depend on several factors. Betterment offers retirement planning tools that can provide guidance on not only how much you should save, but the optimal accounts for you to do so based on your situation. 3. Establish, or revisit, your emergency fund. Having an emergency fund is one of the most important financial savings goals, as it can help ensure a level of financial security for yourself and your family. An adequate emergency fund will allow you to cover truly large and unexpected expenses, and can also cover your costs if you end up losing your job. It can even provide financial freedom in the case that you want to try your hand at a new career. Typically, Betterment advises that your emergency fund should cover three to six months worth of expenses. If you didn’t have one prior to your raise, now would be a great time to start. If you already have an emergency fund, you may need to reevaluate the amount needed if your spending does increase. 4. Pay off debt. If you have any debt, especially high interest debt, you may choose to use this new capital to pay off some of your loans. Let’s assume that you are a single taxpayer, live in a state with no state income tax, and at the start of 2019 your pay went from $60,000 to $65,000. Assuming you don’t itemize, that would place you squarely in the 22% Federal tax bracket. If you get paid twice per month (24 times per year), your net paycheck would go from $1,950 to $2,112, an increase of $162. If you have student loans of $50,000 at 7% interest that were to be paid over 10 years, your minimum monthly payment would be about $580. Increasing your monthly payment by $162 would allow you to pay off your loans almost three years faster, and also help you save almost $6,000 in interest payments! 5. Invest in yourself. Okay, let’s say you’re already on track with your retirement goals, have an emergency fund, and paid off your debt. What do you do then? Investing in yourself can have immense value. And the best part is, it can be done in many ways. Whether that’s taking a vacation to reset your mind after months of diligent work, taking a class to enhance your skills or learn a new one, or even making a material purchase that you feel will better your quality of life, investing in yourself can be a great way to reap the benefits of your hard earned work. If you plan on spending this extra money, just make sure that it’s within your means—don’t fall victim to lifestyle creep. Inherently, you may be a saver by nature. While it’s important to set goals, you may not have a specific goal for these additional savings. By investing additional cash flow in a well-diversified portfolio, you can help to create an even larger raise for yourself at some point down the line. For example, using a taxable investment account will give you more flexibility as to how and when these savings can be used.

Understanding Your Total Compensation Package While interviewing, potential candidates should be empowered to evaluate whether a company is a good fit for their financial and cultural needs, as well as vice versa. Here are some factors you should consider when making your decision. The Job Search. Whether you’ve been through it or not, you’re probably aware of how long and arduous a process it can be. Looking for the right positions, networking, and interviewing encompass only the first part of the search; determining whether the company is a fit for you and your career is the second (perhaps even more important) part. But once you get past the final round of an interview, the anticipation leading up to a job offer sets in. As the job market becomes more saturated and companies try to distinguish themselves from their competitors, candidates have more benefits to weigh than in the past. Instead of giving the brand and prestige of the company more weight in deciding to accept a job offer, potential employees are now thinking “what’s the opportunity, and how can that set me up for success?” As such, understanding your compensation package becomes paramount. Join us as we interview Kate Smith, Senior Director of HR and Recruiting at Betterment, on explaining the different benefits companies may offer candidates and how we should weigh individual needs with our career aspirations. How have employers seen compensation packages traditionally, and how has that changed over time? Traditionally, offer packages have been seen as a base salary with potential for a discretionary bonus. Equity and bonus guarantees were typically reserved for more senior-level hires. This may still be the case for larger, more corporate organizations, but we’ve seen a shift, particularly in the tech industry. Equity isn’t just reserved for senior-level hires, but available and offered to new hires from entry level and up. We’ve also seen a shift in what is included in the offer letter: more companies are highlighting their non-monetary benefits (like the vacation policy, free food, and learning and development opportunities). In a competitive market for talent, companies need to find ways outside of just cash and equity to differentiate themselves. As they also become more tech savvy and flexibility is encouraged, these become big selling points for candidates from a cultural and work/life balance standpoint. How would you describe the different parts of a compensation package? How do you think most employees tend to think of their compensation? Is there a difference? Here are some of the more typical cash components of a compensation package: Salary, Bonuses, And Commissions Salary Cash compensation is typically positioned as an annual salary. It’s important to understand the pay schedule: will you be paid weekly, bi-weekly, or every two weeks? And yes, there is in fact a difference between those last two. It would also be prudent to ask about the company’s raise philosophy. When would you be eligible for a raise? Are they performance based, or standardized? What could your salary growth look like over time, and what impacts that? Bonuses These can be in the form of a “sign-on” bonus (most commonly disclosed at the time of offer and then paid out once you start at a company), or an annual bonus—and in some cases, both. For sign-ons, it’s important to understand what the terms of the bonus are: when will it be paid out? Is there a “clawback” and what is the timeframe for it? For example, in some workplaces if you leave the company within a year, you must pay back the full amount. For discretionary bonuses, it’s important to understand the timing of payout, what the bonus amount is based on (personal performance, company performance, or a combination of the two), and if the bonus is paid for the portion of time served for that first year. Commissions Many sales roles may include a commission component, which is additional cash compensation based on pre-set sales goals. Most commission packages include a base salary which may not be much, so make sure to ask what your “Total Target Compensation” would be, and what the variable compensation (commissions) is based on. If your company has a discretionary bonus, it’s probably worth asking if you would be eligible for that bonus as well—this may not be the case in all places. Paid Time Off, Sick Days, And Parental Leave Holidays Get a list of the company holidays. If there are religious holidays you celebrate that are not accounted for on that list, you may want to discuss any needs you have upfront. Vacation Are there a set number of days you get, or are they unlimited? If set, what is the number and when are you able to increase the amount of vacation days you receive? What’s the accrual schedule for vacation days? Most companies with a set number of vacation days allow you to accrue those days over the course of the year. Additionally, you may want to ask what their rollover policy is. For example, will they allow you to rollover unused vacation days to the next year, and if so, what is the limit? If the company provides unlimited vacation days, it couldn’t hurt to ask: “On average, how many vacation days do people take per year?” The answer can be telling as to how truly flexible the company may be. Sick Days Similar to vacation days, it would be helpful to understand if sick days are allocated or if they're unlimited. Do unused days carry over as well? Parental Leave This is formerly known as “maternity leave” (and still may be at some companies). We’re seeing more companies change their policies to account for bonding time for non-birthing parents, inclusive of adoptions. Whether you’re thinking about starting a family now or in the future, it’s important to ask about the parental leave policy. A few things you should aim to understand: Who’s eligible for leave (birthing mothers, non-birthing parents, adoptive parents)? When are they eligible? Should you be at the company for a certain amount of time before you can take leave? Is it paid leave or unpaid leave? If paid, is it salary continuance, or will you receive checks directly from your insurance carrier? Will your job be guaranteed for that time? If you wanted to take unpaid leave, is that possible, and would your job be held? Medical, Dental And Vision Insurance If you’re offered these benefits, what does the company contribute compared to the premium you’re paying? Do any of the policies cover fertility treatment, and who is eligible for that? Retirement Savings Plan When it comes to saving for retirement, many Americans fail to adequately prepare for their own futures. Make sure to take this portion of your compensation package seriously, and keep these questions in mind: Does the company provide a plan to allow you to contribute to a 401(k) or other retirement accounts? If so, does the company offer a percentage match on your contributions? If yes, when do they start matching, what is the amount, and how often? Some personal advice that I received as a new grad: contribute to your 401(k) from the start. It’s money you won’t miss and you’ll learn to live off of what’s being deposited into your account. You’ll be amazed at how those savings can grow over time (especially if you receive an employer match). Should I only be considering monetary factors in my decision? Absolutely not! Many companies today are offering perks that don’t amount to direct monetary compensation, but can drastically affect your quality of life. Here are just a few non-traditional perks that are worth weighing into your decision: Flexible work hours and work from home (WFH) policies Learning and development stipends Gym reimbursements Childcare reimbursement or on-site childcare Laundry stipend Travel stipend Why do non-traditional benefits matter? First and foremost, it’s important to think about how you personally value the non-monetary benefits. Do they make your life easier? Do they help alleviate stress? Does it help you save money? These are all things to consider that are related to the cultural environment of the company you’ll be working for. Also, it says something about their values and what they stand for—are they supportive of working hard, yet rewarding their employees during stressful times or when good work has been done? What are some tips for encouraging our readers to have those difficult conversations about negotiations with their prospective companies? Three important factors come to mind: Reiterate how interested you are in the position and how committed you are to the company. Determine for yourself what’s a “must have” versus what’s a “nice to have” benefit. Some things may not be negotiable—for you, or for the company—and sometimes it’s ok to walk away if those “must haves” are not aligned. Conclusion Whether you’re interviewing for your first job or are switching roles after being in the workforce for many years, it’s important to think about how your individual needs matter. Thinking critically about what’s important to you and your family will help you determine where you should take your next step professionally. By deciding the amount of compensation you need and deserve, while also thinking about what benefits you value, you’ll be able to set your personal benchmarks and come to the table ready to discuss your needs with your potential—or even current—employer. And, if your interests are guiding you towards the fintech space for your next role, check out our Betterment careers page! We’re always looking for passionate candidates to join our company.

Betterment’s Women Leaders Share Their Best Career Advice Nine women leaders across Betterment talk about their work, leadership, and advice for the next generation. In the full year since COVID-19 fundamentally upended our realities forever, Betterment adapted and grew alongside a changing society, industry, and tumultuous economy. That’s why this Women’s History Month, we’re taking a moment to learn from and appreciate the women who are leading Betterment into the future, by taking a look at their invaluable insights and experiences. We asked nine women at the helm of various departments across Betterment to talk about their work, leadership, and advice for the next generation. What advice do you have for women who are just starting out in their careers? Sarah Levy, CEO: Find something that you are passionate about. You will spend many hours of your life at work and it's best to love what you do. Katherine Kornas, VP of Product: Early in my career, I remember having a conversation with my dad, who worked at General Motors his entire career, about how I always felt like I was “getting it wrong” because I didn’t come up with the same solutions to problems that my colleagues did. “You know what, Kate?” he said. “You think differently than other people. That’s not a sign that you’re unqualified. It’s a sign that you’re an extremely valuable employee because you’re able to see things no one else sees.” Susan Justus, Head of Talent Development: Allow yourself to be vulnerable: Vulnerability is not a sign of weakness and can be your greatest strength. Vulnerability can create a culture of trust and respect. Admitting our mistakes, seeking help, and acknowledging we don’t have all the answers are all expressions of vulnerability. Pat Advaney, Senior Director, B4B Marketing: Don't diminish the value of skills that come easily to you; something that may not be "rocket science" to you is likely something that others struggle with. Own your expertise! Kim Rosenblum, CMO: Try things out; it's hard to know what you will love (or hate!) without hands-on experience. Take time to find the intersection of "what you love" and "what you are good at." Once you know that magic combo it will be easier to create a career path where you will be happy and successful! Veronica Mendoza, Senior Director of Growth Marketing: Don't be too hard on yourself! You can strive to be good without beating yourself up for not being perfect. Can you tell us more about self-care, and how you accomplish it as a leader? Kate Smith, Senior Director of People Strategy & Operations: This is a hard one. As a working mom of three young kids, I find I'm constantly focused on the care of others, and it's only been recently that I've realized the need to carve out time for myself. Once a week my husband and I get the girls to bed, and then I'm off to play a sport I love for an hour, helping me both mentally and physically! Johanna Richardson, Head of Product: Not going to lie: finding balance during the past year has been a constant struggle. Juggling work, normal parenting, and remote schooling all in the place where I live has seriously blurred the lines between all aspects of my life. My daughter has crashed many-a-meeting, but I try to remind myself how cool it is that she gets to see her mom at work up close. That said, carving out some time for myself every day to go for a run or just binge-watch some Netflix is a must. Also, I've really upped my skincare game. Veronica Mendoza, Senior Director of Growth Marketing: I'm not much of a routines or rituals type of person when it comes to self care, but I do believe in Body's Choice. Whether it's a long walk, a night of mindless TV-watching, or just consistently taking a workday lunch break, I try to listen to what my mind or body is telling me it needs—before it starts yelling. Sarah Levy, CEO: It's important to turn off after hours. For me, spending time with family and friends, walking in the park with my husband and dog, and reading books keep me happy. Kim Rosenblum, CMO: It's personal. I try and exercise 5x a week. Even if it's for a short amount of time. And when I exercise I keep a notebook handy because endorphins generate ideas! I also only take on volunteer or extracurricular projects if I have the time. Katherine Kornas, VP of Product: Too much routine is often the source of burnout for me, so when I start to feel like I’m doing the same things, day after day, I’ll do something differently, even if it's uncomfortable at first. Tweaking my schedule even just a tiny bit helps force my brain out of its groove, and I find that I’m able to look at problems and opportunities in new, insightful ways afterwards. What’s your leadership style? Lucy Babbage, SVP of People: I focus on building personal relationships and getting to know my colleagues' personal goals in career and life, and doing what I can to support those goals in the context of what the company needs. I also like to bring some silliness and laughter to the table, so I hope my team thinks I am funny! Susan Justus, Head of Talent Development: I am a people first leader. I lead with care and empathy. I engage my team by asking open-ended questions and creating space for their input and ideas and make myself available to support and guide the process along the way. I am a true believer that people grow when they are provided autonomy, respect and trust to contribute at their full potential. Kate Smith, Senior Director of People Strategy & Operations: Player / coach. I'm ready to roll up my sleeves and get into the details, but can take that step back to be able to take a more strategic view. I want my team to feel empowered and accountable, but I'm here to support them every step of the way. Kim Rosenblum, CMO: Over many years I've learned my strengths and weaknesses. When I'm at my best, I'm supporting people to do their best job—to maximize their talent and potential. Veronica Mendoza, Senior Director of Growth Marketing: I like to think I have a supportive, consultative leadership style. Over time, I've also learned that not everyone responds to a single style in the same way, so I also believe it's most important to be adaptable. Getting to know people individually makes it easier to find the sweet spots between disparate styles, leading to stronger relationships and, very often, better business outcomes. Johanna Richardson, Head of Product: I try to lead with empathy and transparency. I want to make sure that everyone on my team has the space and autonomy to shine and feels supported in their careers. What about your work at Betterment are you most proud of so far? Sarah Levy, CEO: It's pretty early in the journey for me. I'm really enjoying getting to know the team, the industry, and the amazing things that differentiate Betterment: performance, ease-of-use, transparency, and personalization. Susan Justus, Head of Talent Development: Building the Talent Development function from the ground up over the last four years. Creating a core skill training curriculum, leadership development tracks, one-on-one coaching programs and various other tools/resources that support growth and development for employees. Pat Advaney, Senior Director, B4B Marketing: Publishing lots of B4B content that has helped drive traffic to our site and helps educate our employer clients. Kate Smith, Senior Director of People Strategy & Operations: I'm proud of the direct impact my work has on our people and culture. A lot of what we do is behind the scenes, but to see how that work has contributed to Betterment being a great place for our team members to grow and develop their careers, all while creating and supporting an amazing product for our customers—it's very rewarding to say the least! Kim Rosenblum, CMO: It's been a fast first month! I'm learning so much, and I feel very welcomed. I appreciate that everyone here is helpful and a teacher. I'm excited to learn more about our existing and potential customers, building an emotional and resonant brand, and marketing incredible products that meet a vital need. Our mission is quite inspiring! Lucy Babbage, SVP of People: I'm proud to have been part of an ever-evolving team that has made Betterment such a special place to work over the years and also that I finally got our new kitchen construction wrapped! Johanna Richardson, Head of Product: I'm really proud of the team we've built. Truly a stellar crew. Anything else on your mind that our readers should know about? Katherine Kornas, VP of Product: I’m queer-identified and grew up in a conservative, religious Midwest suburb. I didn’t fit in. My experiences, while heartbreaking at times, helped instill a tenacity in me that I often call upon during my career, particularly when I’m faced with tough problems and ambiguity. I believe I’m a better leader because of it—and am proud of that. Kate Smith, Senior Director of People Strategy & Operations: I'm a proud mom to three little girls, and I feel so grateful to work at a place like Betterment where I feel so supported as I try to juggle work and family priorities. Sarah Levy, CEO: I love leading a business with such a positive mission—to empower customers to make the most of their money, so they can live Better! If you’re interested in joining our team, check out the Betterment careers page! We’re always looking for passionate candidates to join our company.