Your financial fitness is something you can work to improve if you know how. If you’ve ever felt like your financial standing isn’t in your control or wondered how you can improve your standing, begin with these five questions.
1. To your employer: Can we discuss my performance?
One of the most obvious factors in your financial health is your income. Most people—65 percent—aren’t making what they want. It’s not always enough to hope you’ll make more money in the future, though. It’s important to take control of this situation yourself.
More than half of survey respondents have never asked for a raise. However, among those who have, success rates are fairly high: 66 percent of people who said they asked for a raise got one.
Timing is important when asking for a raise. Ask for a raise after a major accomplishment or milestone. It’s better to hold off during high-stress or unusually busy times for your company.
When asking for a raise, come prepared with information to back up your request. This might include evidence of the value you bring to your company, data on typical salaries for people in your position with your experience level or details of new responsibilities you’ve taken on at work.
Two topics to stay away from when asking for a raise: details of your co-workers’ salaries and new stressors or expenses in your personal life. These aren’t good reasons to ask for a raise, and could turn your employer off to the idea of granting you one.
2. To your utility provider: Can I change my payment due date?
The date your payments are due can impact how you manage your monthly budget. It’s important to not spend money you don’t have, but when bills are due and your paycheck hasn’t come in yet, you may feel unsure of what to do, or pay your bills late and incur penalties.
One solution could be to begin saving for next month’s bills when you get paid. This is a smart idea that could reduce your stress in the long run. However, it’s not always easy to get ahead of your bills, or pay what’s due this month while saving for the next.
Another tactic could be to ask for a different payment due date. Many credit card and utility companies are willing to shift the date you need to pay bills to help you manage your money wisely and consistently fulfill your obligations.
When you do this, choose a date that makes sense based on when you’re paid and what your budget looks like—it won’t help if you just put yourself in a similar bind. You could also space out your various bill payment deadlines so certain debts are paid with your first paycheck of the month and others are covered with the second. Spacing them out may help you budget more carefully, or give you more time between bills to reassess your finances that month.
3. To your phone or internet provider: Can we negotiate a lower rate for my service?
Cell phone and internet providers frequently offer promotional deals for new customers, but the savings can go away after some time. For this reason, it’s critical that you review your utility bills each month so you can spot any new charges quickly. When you see an increase in price, don’t hesitate to contact your provider to find out why, and be sure to inquire about how you can reduce your bill.
Before you attempt to negotiate a lower rate, do your homework. Find out what deals your current provider offers to new customers, as well as the promotional and regular rates of their competitors. When you connect with a representative for your current provider, explain that you would like a lower rate and provide details of the rates available to you.
Make it clear that you’re willing to get services through another company if they won’t help you reduce your service bills. If they don’t, follow through and switch providers. While it may be more time-consuming to go this route, you’ll still wind up with a lower monthly bill.
4. To your credit card company: Can you increase my credit limit?
This money question is one you should only ask when you’re positive it’s the right move for you. Asking this question could trigger a hard pull on your credit report, which is something you want to reserve for necessities. Hard pulls can lower your credit score slightly for a period of time, so if you’re planning on applying for a loan in the near future, you may want to hold off on asking for a higher credit limit.
Your credit limit is the maximum amount of money you can access on a particular line of credit. This number is also one figure that factors into your credit utilization rate (how much credit you use vs. how much is available).
There are two reasons you may want to increase your credit limit: To increase the amount of credit you have access to or to reduce your credit utilization rate. Both reasons could be helpful, but they could also be harmful to your credit or financial situation depending on your overall credit picture.
If you want a higher credit limit to increase your buying power, first determine whether you can afford to spend more—or if you need to. Carefully analyze your budget to make sure there’s room for your purchasing plans. If you’re hoping to increase your credit limit so that you can make a large transaction, ensure you can afford to pay off the purchase according to the terms of your line of credit.
People who have a habit of overspending or have difficulties paying their credit card bills in full each month may not benefit from this move. The best times to do this are after you get a raise or after you’ve proven to this credit card company that you’re responsible with your money. The only way to continually gain the benefit of a lower credit utilization rate is by consistently making on-time, in-full payments.
You may also want to increase your credit limit to reduce your credit utilization rate. This is determined by dividing the amount of credit you’ve used by the amount to which you have access. A lower credit utilization rate is generally associated with a higher credit score.
However, if you’re asking for a limit increase because you’re unhappy with your score, it may be wise to explore other ways to improve it. When your credit score is on the lower side, your chances of being approved for an increased credit limit are lower, which means you may wind up with a hard pull on your report and no benefit. Want to improve your credit score? Get familiar with your credit report. Find an error? Here’s how to fix an error on your credit report.
5. To yourself: What are my long-term financial goals?
Your financial health impacts you and your goals more than anyone else. While there are questions you can ask others to help improve your standing, the most important question is the one you ask yourself: What are your goals? Defining them is the only way to begin working toward them in a strategic way.
Your goals are personal but important. Determine whether your goals include a home, a higher degree, a lavish vacation, a comfortable retirement or something else altogether. Then, determine what you need to reach those goals.
Do any of these situations apply to you? If you have questions about how to plan for your future or what to do with a windfall, reach out to OnPoint to schedule a meeting with a financial advisor.