Month: September 2015 (page 1 of 3)

You Are Worth More: Negotiating Pay

You’re worth more. I say this to every millennial that talks to me about how much money they are making no matter how well they think they are getting paid.

Why?

Aligning what you think your skills are worth with how much a company is willing to pay you can be challenging. Both sides have to agree on a number that is equally benefitting. Unfortunately, the employers usually win.

This is especially true for millennials that graduated college shortly after 2008 when there were no high paying jobs available but student loans were still there to pay back. This obviously led to the acceptance of any offer that was given. I was definitely in these shoes as I didn’t negotiate the first couple of job offers that I had.

If you were one of these people or you are someone that thinks they should be making more, you need to make sure that you’re prepared to keep the ball in your court the next time around.

Here are 5 tips/strategies to get the most from your next job.

Research. Look online at sites such as Glassdoor and PayScale to see a range of salaries for similar jobs. These sites can give you an idea of what companies are willing to pay. Remember, not all information on these sites is accurate so you will still want to talk to recruiters, employees at different companies, and any other contacts that you have. If you see a range, always think about the highest number in that range. Knowing what competitors are willing to pay will prepare you for negotiations.

What are your salary expectations? This may seem like a good opportunity for you to tell the recruiter the highest number you found, but its not. You should avoid saying a number at all costs. Instead, let the recruiter know that you are more interested in learning more about the position and you prefer to talk about pay closer to an offer. This keeps the ball in your court and gives you the ultimate negotiating power. If for some reason you have to give a number, give a range.

via GIPHY

Be a salesman. It doesn’t matter if you are interviewing for an engineering role or the CFO role, you need to be a salesman throughout the whole process. Make sure you know the company, the product, the people, financial strengths of the company, and anything else that you can find. Be confident and efficiently portray your skills without looking desperate. Companies want to be sold the idea of hiring you, so if they buy-in to the idea of having you on their team, they will give you what you want.

Think about what you want from the job. Is it strictly money or are you looking for something else such as certifications, higher education, or more time off. Maybe you don’t care about any of that and you just want a fulfilling job. Would you be willing to take a lower salary if the company offered to pay for your MBA? Before negotiations, think about all of this stuff and keep these things in mind. Good companies are always willing to invest in your future as long as your future is with them.

Always negotiate. There are obviously times and jobs where negotiating is out of the picture. A lot of the times, this isn’t the case. No matter what the offer, employers usually keep wiggle room for counter offers so you need to always come back with a larger number. I suggest asking for some time to think about the offer. This not only gives you some time to make a sound decision on the numbers, but also the job itself. Again, this keeps the ball in your court.

No matter what, always remember that YOU ARE WORTH MORE THAN YOUR SALARY. Don’t ever put limits on how much you think your skills are worth. Be confident and know your value. Know that you can do a much better job than any other candidate and make that clear to the employer (without sounding arrogant of course).

If you do your research and come to the playing field knowing you are the best, you will get what you want.

Cheap vs Frugal

Being the personal finance geek that I am, there is a tendency for people to mistake my frugality for being cheap a lot of the times. What my friends, family, and even some strangers don’t realize is that there is a big difference between being cheap and being frugal.

Being cheap is cutting costs no matter what the outcome while being frugal is concentrating more on the value.

Here are some examples.

  1. Saving money is awesome for people who are cheap and frugal, but people that are frugal would never do so if it drastically affects their physical and mental presence.

I had a friend in college that would only get haircuts twice a year to save money. This would cause him to look like an Angora Rabbit (below). You can get a pretty decent haircut for $10 (I would recommend spending a little bit more by going somewhere professional).

angora-easter-bunny

For one, $100/year is not very much to save in this situation as it not only affects your physical appearance, but it affects your ability to be confident while presenting your personal brand.

Someone frugal would continue getting professional, yet affordable haircuts by cutting back and not cutting out.

  1. Cheap is going to McDonalds and frugal is going to Chipotle.

 This example goes beyond the price.

Though McDonald’s offers affordable price points and has contributed greatly to the economy and communities throughout the years, they offer low quality food that most humans should not be consuming.

Chipotle on the other hand offers high quality food and is one of the most ethical companies in the world. I never mind spending money there as I know exactly what I am putting into my body. It is also an affordable place to eat Mexican food!

Being frugal means spending an extra few dollars for the quality while also supporting a company with greater values.

  1. Cheap people look for a lot of small “wins” while frugal people look for big “wins”

 A lot of my favorite personal finance authors like Ramit Sethi talk about this topic and I couldn’t agree more. I’m all for saving five bucks here and ten bucks there. That being said, I won’t sacrifice a lot of time for those small wins.

I am more willing to sacrifice some time for big wins such as salary negotiations (a topic in itself which I will write about), buying or selling a car, leases, and larger fees. These things can save me hundreds and even thousands.

Saving 35 cents every week on Skinny Cow ice cream bars (the best) won’t make you rich.

  1. Cheap people only value their money while frugal people value their time.

Have you ever thought about how much your time is worth?

People that are cheap NEVER think about this. For them, money is more valuable than time.

What about the time? The time that you could have spent writing that business plan, consulting one more client, buying one more rental property, traveling to one more country, or reading that book?

Prioritizing time instead of money is what leads to more money, which leads to a rich life.

       5. Cheap people buy things while frugal people invest in themselves.

I personally love going to coffee shops because I spend hours at these places writing, reading, interacting with strangers, and meeting friends/business partners about potential projects. The $2.50 I spend on a cup of coffee a few times a week gets me closer to reaching my goals and dreams so why would I give that up?

I consider this an investment as I choose to spend money on something that makes my life better while continuously learning about something.

Cheap people don’t think there is such a thing as investing in yourself. They think of investing as something external.

If you want to make a lot of money buying real estate, you need to first invest in yourself with books, coaches, courses etc.

If you want to live longer, you need to invest in yourself with a gym membership (maybe some veggies as well)

If you want to expand your business, you need to hire someone to help you, which would essentially be investing in yourself.

Prioritizing your needs over your wants is what will set you up for greater financial success!

PS-The new season of Shark Tank starts in two days!

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