Is It Possible to Make Too Much Money?
Being overpaid is probably not something you’ve ever spent much time worrying about. After all, real wages are down 7.7 percent, compared with 2006 numbers, and 23 percent of workers were laid off at some point during the recession. Earning too little seems more likely — and more dire — than earning too much. So should you even worry about being overpaid, in the first place?
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A reader of Ask a Manager recently wrote in to ask Alison Green for her advice on this very issue. After working for a non-profit for several years, the reader switched to a for-profit company. Her salary increased significantly. Then, at review time, her manager upped her pay again, by 20 percent, in part to compensate for the fact that one of her reports earned more.
Now, she says, she’s up all night worrying that she’s making too much for her position, and that her boss will regret giving her the raise — or that she’ll find herself forced to take a pay cut or a demotion for her next job.
Dealing With Impostor Syndrome
If you find yourself in the reader’s situation, the first thing to do is to figure out if you really are being overpaid, or if you’re just suffering from Impostor Syndrome, that insidious disorder, especially common among working women, that tells us that our success if a byproduct of luck or managerial mistakes, and not our own abilities, skills, and experience.
“Just because you feel overpaid doesn’t mean that you actually are, and it’s possible that your norms are off, especially if the nonprofits you were working for were particularly low-paying,” Green writes. “…You’re not overpaid just because you’re earning more than you were at a previous job, or even more than you were before this raise. You’re only overpaid if you’re earning wildly more than market rates.”
So how do you know that? Research. PayScale’s Research Center, for example, offers salary ranges and reports based on your title, years of experience, and geographic location, among other factors.
What If You Are Overpaid?
If, after all of that, you find that you’re overpaid, the answer is never to refuse the raise. If the past couple of years have taught us anything, it’s that rainy days are always coming. Instead:
1. Bank the extra, and live off of what you “should” be making.
This is Green’s first suggestion, and it’s an excellent one. Save for that rainy day, and you won’t have to worry as much about whether your luck holds.
2. Attack your debt, and keep more of what you earn in the future.
Alternately, if you have a lot of debt, now’s a good time to use the excess to chip away at that particular millstone. That way, even if you make less money in the future, you won’t have to waste it in interest.
3. Use the money for education, and catch up to your salary.
Think about where you want to be in five or ten years. Is there a skill, certification, or degree that could make you more successful? Use the extra cash to shore up your future by filling in those skills gaps, and you won’t have to worry about being overpaid, because you’ll be worth even more than that.
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