​​3 Things You Can Do if Your Salary Isn't Keeping Up With Inflation

While some of the latest data shows that inflation is starting to cool down, there's no getting around the fact that inflation has eroded many workers' buying power over the past few years -- and that's caused a strain on many Americans' personal finances.

Consider that annual grocery prices rose at their fastest pace in more than 40 years in 2022, and the current median monthly rent price of $2,029 is nearly 17% higher than the same period in 2020, according to research from Rent.com.

The rapid rise of inflation in such a short period may mean that the salary you were getting paid just a few years ago isn't giving you the same standard of living it once was. If that's the case, here are a few things you can do to improve your situation.

1. Negotiate for more pay

If you like your job but think you deserve more pay, consider negotiating a higher salary. The good news is that many companies are already open to paying workers more right now. A recent Salary.com survey said that 64% of companies are considering higher merit-based pay increases this year, a 23% increase from last year.

While this doesn't have to be a complicated process, you should approach it with some finesse. For instance, do some research ahead of time to figure out what similar positions in your industry are getting paid.

Spend a little time on websites like Salary.com and Glassdoor, and compare your job title and years of experience to similar job postings and salary data. Not only will this help you find a good salary number, but it may also help convince your boss that you're asking for a reasonable amount.

When discussing the raise, you'll also want to give specific reasons why you believe you deserve it. Maybe you just completed an important project for the company, increased quarterly revenue, landed a large client, or surpassed an annual goal set by your boss.

While it can feel awkward for some people to promote their achievements, gathering all this information and asking at the right time can give you confidence that you're making the right decision.

2. Take on a side job

If asking for a raise doesn't work out, or it's not a significant increase, you may want to consider taking on a side job. While there are a lot of different side hustle opportunities, it may be best to think of what skills you currently have that can easily be used to take on more work.

For example, if you work in public relations, taking on some side projects as a consultant may allow you to make more money without having to invest in new equipment or training. According to the freelancing platform Upwork, public relations consultants get paid between $50 to $100 per hour.

The same idea can be applied to people who have project management experience in their current job. Upwork's data shows that project management work can pay between $19 to $45 per hour, and demand for the job is expected to grow by 7% through 2031.

The point here is to use your time and experience in the most efficient way. Landing one or two clients may be enough to increase your pay to the level you want without needing to take on a lot of additional work or spending time developing a new skill.

There's a long list of websites you can use to find extra work, including Fiverr and Upwork, but it's also a good idea to talk to friends and colleagues. I picked up some extra freelancing work a few months ago after casually mentioning the idea to a friend whose company needed help with some additional projects.

3. Look for a new job

If you need more money and your current job isn't willing to pay more, it may be time to look at other permanent opportunities. The good news for job seekers is that the labor market is strong, and switching jobs is still a good way to boost income.

The latest data from Bank of America shows that people who job-hop earn an average of 13% more in their new positions. That percentage is down from a high of 20% during the Great Resignation, but it's still higher than the average 10% pay raise people received when switching jobs before the COVID-19 pandemic.

The unemployment rate is currently at 3.6%, a nearly 50-year low, according to U.S. Bank, and as of last month, there were 9.8 million job openings in the U.S.

But the job market is showing signs of slowing down, which means that if you're considering a new position, now may be a good time to look. Many employers are still looking for workers, and your chances of finding a higher-paying job may still be better than before the pandemic.

Just like asking for a raise, make sure you do your homework beforehand to figure out how much your skills and experience should help you earn.

And no matter which avenue you choose, remember that if you don't score a raise, get a higher-paying job, or find a side project, there are budgeting apps out there to help you manage your money. There are also other resources available if you need help paying off debt.