Know These 10 Things Before You Negotiate Your Pay

By on April 17, 2014 in Negotiating Pay, Salary Negotiation

Number TenGuest Post By Katie Donovan of EqualPayNegotiations.com

You have rewritten and proofed your resume and cover letter a million times. You run interview questions and answers throughout the day. You are ready to go get your new job. Or are you? Have you thought about the salary and how you will negotiate it? Here are ten things to know before you complete the next job application. These work for raises as well.

1. You are underpaid if you accept the first salary offered to you. Hiring managers expect negotiations so they keep some money aside specifically for that purpose. This money already has been budgeted. Will you be able to get it or will your manager have the opportunity to use it elsewhere? Next time try before you accept the job offer.

2. It is almost impossible for a woman to ask for too much. Research shows that women continually underestimate the value of their work. It’s also shown that men typically ask for 30% more money than women in salary negotiations. Even when you think you are pricing yourself out by asking for too much, chances are very high that you have not.

3. The market value of the job for men is different than the salary ranges shown on career web sites. The salary ranges consider salaries earned by men and women. The goal is to earn what the guys are making so seeing numbers that are lower does not help us determine the true market value of the job.  This means a little math. Divide the target salary by 0.885 and you will get the salary men earn assuming a 50/50 split of men and women in the industry.  Earn More Girl mobile app will do the calculation for 135 different jobs categories and industries.

4. The financial strength of the company is important. We ladies are an empathetic bunch who wouldn’t want to ask for something that would be hard for our managers to do. Really we think that way even when we know the job should pay more. To help you realize the company can afford to pay you more and to be ready for the inevitable “we can’t afford it” comment in the negotiation, research the company’s financials. Public companies report their finances with the SEC. Non-Profits file 990 forms annually. Government offices have public budgets. Private companies have many hints at their success through the press releases, company meetings, and sales growth. Sales representatives can give great insight on this topic.

5. The company’s future strategies are more important than today’s tactics. Sure you are doing a specific job today but you need to understand how the company will change. Oh, did I forget to tell you that your company would change? If it doesn’t it will most likely die so be ready for change. Ask about the future of the company. Do you have skill sets and experiences that will continue to be an asset with future strategies? Do you have skill sets and experiences that have not been used yet at this company but will be critical with new strategies? Can you learn new skills that will make you more valuable with the company’s future? Make sure management understands how you are ready to grow with the company and welcome the changes.

6. The network you bring to the company can be invaluable. Harvard people are worth so much more than we mere mortals not because of their brains. It’s their connections that truly are above and beyond the norm. You have a network of friends, family, classmates, colleagues, and others who may become clients, employees, partners, vendors, advisors, or investors of your company. Let your company be aware of how you are developing your network and using it with the company’s needs in mind. When possible use specific examples of people you have brought into your company’s world.

7. Awards and accolades you have earned are objective and subjective proof of your abilities. Current and former employers, industry organizations, and educational institutes often give various accolades. Make sure your superiors are aware of all that you have earned. Don’t be shocked if you have to remind your manager of an award granted from him/her. Don’t be shocked if you forget what you earned. Keep an “Atta Girl” file with emails and notes from superiors, clients, and others that praise you for work well done. Even save digital copies of voice mail that praise you. Of course, don’t forget any actual awards. Now the most important part, share this information freely with management.

8. Your contribution to increase revenues is important. If you are not in sales this one may seem hard but the more you can put a dollar figure to your contribution the better you will be able to negotiate. Did you help sales representatives pull information for a new client? Did you come up with a product idea? Did you come up with a new market to target? Do you think of a new advertising channel? Did your introduce a new client to your company? Once you can pinpoint a direct impact on revenue than put a dollar figure on it. It’s amazing how easy it becomes to ask for $10,000 more in salary when you can demonstrate that you impacted $50,000 coming into a company.

9. Your contribution to decrease costs is important. Chances are high that if you do not impact revenue then you probably impact costs. Did you negotiate a better contract with a vendor? Did you develop a shorter production method? Did you improve customer service best practices so that fewer customers need additional assistance? If it saved time, it saved money. If it lowered the number of times people needed to interact, it saved money. If it lowered the amount of inventory needed, it saved money. Again putting a dollar figure on this and sharing with management is the ultimate goal.

10. Your options if you cannot negotiate the salary you want. Too often we feel like we need to take what is given us especially during bad economic times. Understand how well you can survive and thrive elsewhere prior to having a salary discussion with your current manager or a hiring manager. It’s amazing how this knowledge gives you confidence. If you talk to your current manager, the worse that could happen is that you are still employed with the same salary. You may decide that you will begin to look for a new job if you cannot negotiate a better salary but that doesn’t mean you need to say, “I’m quitting.” If you are talking to a hiring manager and are currently employed, again you can stay with your current job at the current salary and continue your job search until the right job at the right salary happens. If you are unemployed and talking with a hiring manager the best alternative is harder to come by. Sometimes, knowing that you are taking a job for the short term to keep a roof over your head is the needed step. Just knowing this can give you the freedom to then continue job searching even after accepting a job offer.

Good luck with your next salary negotiation. You should find it easier if you consider the 10 items above.

Article originally appeared on EqualPayNegotiations.com.

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Creating More Income to Accelerate Your Financial Plan

By on April 3, 2014 in Financial Plan

When I put together a financial plan for my clients, they often get excited to see the possibilities of finally getting out of debt once and for all and also saving more money so that they can live a more financially stable life.

Typically, reducing spending is the first place that I look to support others in building a solid new plan, however there are two sides to the stability equation!  The other place to look at is creating more income, and that can happen in several different key ways:

  1. Ask for a performance review (and maybe even a raise!) – When I used to work in a corporate job, it was pretty standard to have at least an annual performance review, and sometimes there were even check-in points mid-way through the year to see how things were going.  However, it always surprises me that while there is generally a process in place for such reviews that most people don’t see these reviews as the massive opportunity that they really are and they end up simply going through the motions to comply with the required paperwork.  If you’re the one being reviewed, this is a HUGE chance for you to stand on the top of the mountain and shout as loudly as possible just how your results have contributed to results.  Don’t be shy, and make sure that you invest some time connecting your contributions to either increased income or decreased expenses for the Company.  Also, make sure that at least once a year that you’re checking in with your immediate boss to better understand his/her goals so that you can align yourself directly with what they’re looking to accomplish.  If you’re aligned with his/her efforts and can make him/her look good, then there’s a better chance that you’ll be taken care of both in terms of getting the right roles and assignments as well as being financially compensated for your efforts.  Lastly, don’t be shy about asking for feedback in between formal reviews – sometimes the best feedback that I received about my performance and how I could improve came in the casual moments where there wasn’t a formal process or form involved!
  2. Leverage your skills – We all have certain skills that we give away for free regularly, and while I’m a big fan of generosity of course, I’m also a fan of valuing your worth and being paid well for your skills and results.  Is there something that you’re doing in your life right now for free that you could be getting paid for?  Is there something that you’re really good at that your friends and family would absolutely love it if you’d just create something or share some information with them and they’d gladly pay you for it?  Spend some quiet time to think about where you might be leaving money on the table, and start to see whether you might even be able to earn a few extra hundred dollars each month to support accelerating paying down your debt and strengthening your savings account too.  And who knows, perhaps you’ll be able to earn a sizable living from something that you’re already doing yet never really stopped to think about monetizing it! (This is by far one of my favorite things that I love to do with people…seeing their eyes light up with excitement to think about being paid to do something they love is awesome!)
  3. Ditch the clutter – It’s my favorite time of the year to just go absolutely nuts and start getting rid of things that you don’t need! Some folks call it “spring cleaning,” and it’s a great chance to look at what you can donate or give away to someone in need while also thinking about what items of substance you might be able to actually sell to someone who needs it.  In fact, just earlier this week a friend and I decided to host a yard sale at her house later this month to get rid of some of the things that we just don’t need anymore – what a great way to ditch the clutter and make some money while having fun with your family and friends!

While there are certainly more ways to create income than the 3 presented above, these 3 will most definitely support you in getting started earning more money.  The combination of a solid money management approach fueled by extra income can be an exciting way to accelerate your timeline to financial freedom!

 

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How Financial Procrastination Can Cost You Your Dreams

By on March 20, 2014 in financial imperfection, financial procrastination

There has been a theme showing up with my private clients lately — what I like to call “financial imperfection.”

What does financial imperfection mean exactly? The best way that I can describe it is that people are feeling afraid to move forward toward financial clarity for fear of making a mistake, or that they’ll manage their money incorrectly. They’re holding themselves accountable to having all of the answers when the reality is that surrendering to being in the discomfort of learning what they haven’t yet been taught is often times a better answer (even if it doesn’t feel great at the time).

I bring this up to shed light on the desire to be financially “perfect,” because this is an impossible state and an impossible standard to hold oneself up against. Each of us, including myself, are on a journey to the next level of whatever it is that we’re working on — whether it’s money, love, career/business, or something else. There’s an old saying that “practice makes perfect” — I prefer to say that “practice makes improvement.”

Another way the desire to be financially perfect shows up is that people are waiting until they have “enough” to proactively manage their money. It is never too early to demonstrate that you’re a good steward of the money that flows through your life, and when you’re able to show that you can manage what you have you will be able to attract more. The Universe suddenly knows that you can handle what you’re given, and so it provides you with more of it.

The end result? In trying to be financially perfect, I see that many people hesitate to step into handling their finances in a powerful way. Sometimes that’s from fear of honestly looking at their situation, sometimes that’s from feeling like they don’t understand how money works, and sometimes it’s from the fear of being judged or embarrassed.

Whatever the reason is for not stepping in powerfully, the result is what I like to call financial procrastination.

Financial procrastination can have a significant and lasting impact on the quality of your life…so let me say more about that. I’ve shared before that I believe that money can be a divine tool to support your life and what you’re up to, and I do believe that with all of my heart. Money has the potential to be fuel for your dreams, and to provide you with the ability to unlock and unleash your potential. Pretty powerful, right?

So what is it saying if you’re allowing the desire to be financially perfect hold you back from the life you’ve always wanted to live? Are you able to step into the “mess” of financial imperfection to get to the other side to reclaim your life and step fully into all of who you’re meant to be?

In a more functional capacity, any financial expert will be quick to explain that the longer you wait to get a handle on your finances, the more it will cost you in terms of the ability to invest the money and earn a greater return on it (you may have heard of this as the “time value of money” concept). And while this is true and the left side of my brain agrees with the mathematical calculation of this concept, I have to stop and ask the more important question here.

Can you stand to be with the imperfection of looking at your financial situation in order to breakthrough to the other side of abundance and living your life full out with everything you have?

This is most certainly not an easy question to answer, yet it’s one that I was called to ask today — of myself as well as of you. In the end, a solid financial plan and accompanying proactive money management skills are the backbone of your financial freedom as well as the freedom to be all that you were meant to be.

Are you ready?

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A Spiritual Perspective: Money as a Divine Tool

By on March 6, 2014 in energy of money, financial spirituality, Money as divine tool, Money Management

“To have a balanced relationship with money, you need to respect its energy.”

This quote was recently in a book I was reading, and when I read it I almost cried out in joy. “YES…EXACTLY!!!” I thought to myself.

If you’re a private client or someone who knows me well, you know that this quote articulates one of the most important spiritual financial principles that I teach. When you show money that you respect it, it will show up in ways you could have never imagined to support you in complete and total abundance. In contrast, if you don’t respect your money, then your financial life generally speaking feels stressful and overwhelming.

In fact, there are 3 key spiritual financial principles that I believe and that I incorporate into my work that demonstrate money’s place as a divine tool that will show up to support you in your life:

  1. The energy of money is meant to flow…in and out — In today’s society there is a significant focus on accumulating money for retirement later on in life. And while I am in agreement that having money set aside is a good idea and allows for financial stability, there is a delicate distinction where accumulation begins to feel a bit like hoarding and where the energy of money feels stilted, stale and stuck. Every individual (and couple and business owner) needs to find the balance for themselves that feels good to support financial stability (short term and long term) while giving generously and allowing the energy of their money to move in and out of their life. In my experience, life is too short to wait until retirement or later in life to enjoy it. Find the balance for yourself that allows you to use money as a resource here and now while also setting some money aside for future opportunities and needs.
  2. Manage your money purposefully and wisely and be rewarded — If I’m being honest, this may be my favorite spiritual financial principle because it’s a place where everyone can start right away – managing the money that they already have access to! Stewarding and managing money wisely signals to the Universe that we’re ready for more abundance, and so paying attention to and learning about proactive money management systems and techniques is a critical part of the equation for financial freedom. As a mentor of mine once shared in a story that illustrates this point well…if you took a 5-year old out for an 1-scoop ice cream cone and he dropped it on the ground by accident, would you then turn around and buy him a 2-scoop ice cream cone when he asked for it? Of course not because he had trouble handling the 1-scoop cone as it was! The same is true with money — if you’re struggling to handle what you have right now, why would the Universe give you any more?
  3. We can all attract more money into our lives — If I’m completely honest, this was the hardest principle for me to fully believe in for myself until I had the pleasure of experiencing it over and over (and over) again. Many people (including me several years ago) think that there is a limited amount of money to be divided up and used by everyone in this world. Would it surprise you to learn that by simply making a strong and intentional commitment and taking action in the direction of our dreams that we can attract more money into our lives in a way that doesn’t mean that others have any less money? This one may be hard to swallow and really understand at first, but all I can say is that the power of intention is an amazing resource that is available for all of us to tap in to…and we don’t use this resource nearly often enough, or we use it and then give up on our intentions when it feels like something we want (i.e. money) isn’t happening fast enough.

So, at this point, you’re likely saying one of these three things to yourself after reading this article: 1) “what the heck is she talking about, this makes no sense — she’s crazy”; 2) “this is new, but I’m open to it”; or 3) “this makes complete and total sense and I’m on board.” And no matter where you are on this spectrum, all I ask is that you consider these new thoughts that I’m presenting. Several years ago I thought that effectively managing your money was all about using spreadsheets to make sure your expenses were less than your income. Now I know from the results that my clients have and my own life that the actual science of money management is only the beginning of the formula for financial freedom.

At the end of the day, financial freedom and financial independence aren’t necessarily just about what your bank account looks like in the future, it’s also about freedom from the fear of money and trusting that if you respect money that Universal forces will respect you back and you will be provided for with the right opportunities to support you and the life of your dreams!

Money is truly a divine tool…if we allow it to be.

Image courtesy of chanpipat / FreeDigitalPhotos.net

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How to Get out of Debt….and Stay Out!

By on February 20, 2014 in Getting out of debt, How to get out of debt

“I feel like I’m on a bad roller coaster ride and I can’t get off.”

That’s how my latest conversation started with my newest client. And while she was referring overall to the lack of financial stability in her life when she said it, when we dug deeper into the details of her financial reality she revealed that she had a significant amount of debt that she just simply couldn’t seem to ever get rid of that was at the root of her financial instability. The weight of this debt was keeping her feeling stressed and overwhelmed instead of allowing her to pursue her dreams and live a life full of freedom and choice.

Like many people that I meet, this woman was caught in what I like to refer to as the “Bermuda Triangle of Finances.” Triangle point #1 = earning a good living and making good money. Triangle point #2 = a decent amount of consumer debt (i.e. credit cards), typically on average between $20,000-$50,000. Triangle point #3 = limited, or no liquid savings at all.

It’s like the perfect storm – you work hard to earn a good living; you overspend because you aren’t fully aware of where your money goes (most people were never taught how to proactively manage their money); you accumulate debt as a result of living above your means; and you can’t ever really make a dent in your debt because every time you make a concerted effort to do so you make progress only to be interrupted by this little thing called LIFE. “Life” looks and sounds like unexpected car repairs or something unplanned for that the kids need for school or activities.

This doesn’t sound like a lot of fun, does it?

It usually isn’t much fun and almost every one of my clients show up with these symptoms and are living the reality of the Bermuda Triangle of Finances. So I’m guessing if they’re feeling this pain, you might be too.

So what to do about it? Here are 5 steps you can take today to get out of debt (and stay out of it!):

  1. Face the devil you don’t yet know — What do I mean by this? It’s time to face the facts and get around to documenting how much debt you really have. I know, this might be the hardest step in the whole process, but I promise that it’s really important. Without understanding the size of the problem, you can’t possibly figure out how to solve it. Grab a cup of coffee, sit down, breathe deeply, and just start writing it all down. You can keep it simple and write it on paper or use an excel worksheet. The point is just to make a full confession and get your arms around it all.
  2. Stabilize the chaos — When you’re beginning to develop a plan to get out of debt, it’s important to stabilize your debt balances and stop adding to them as soon as possible. Otherwise, it’s like you’re in a leaky boat with holes in it in the middle of a pond (i.e. the boat = your debt), you’re sinking and trying to bail the water out (you’re trying to pay down the debt), but at the same time you’re pouring water into your leaky boat (new purchases). The best way I know to pull up the brakes on the debt issue is to start living on cash and cash alone. If you must, keep one credit card in your wallet in case of some unforeseen challenge or emergency.
  3. Reassess your lifestyle — In order to get out of debt, you’ll need to free up some extra money from somewhere to start paying it down. The best way to do that it to see where you may be overspending. Overspending can happen in small doses (i.e. eating out a lot, clothes shopping, etc.), or with bigger purchases (i.e. a high rate on a mortgage, private school tuition, etc.). No one likes change, I know – however in order to solve the debt puzzle it’s very important to see what changes you can make in how you live your life to contribute extra money toward paying down debt. In the end, you’re looking to find a certain amount of money each month that you can dedicate toward paying down your debt.
  4. Develop a strategy to pay down your debt — After writing all of your debt down, it’s important to come up with a strategy to pay it down. I usually recommend that as the first step in developing your strategy that you “rank” your debt and decide which piece you’ll pay down first. The game plan is to pay at least the minimums on all pieces of debt and to focus any extra money you have on one piece and one piece only until it’s paid off. This plan makes it much easier to focus and you’re consistently seeing the reduction of your debt until the one piece is gone. After the first piece of debt is paid off, then you move on to the second piece, and so on and so forth until you’re done paying off all of your debt!
  5. Save your way out of debt — This is an often-missed piece of the puzzle and what I’m about to say may be viewed as heresy. Most people believe that if they have debt they should use any extra money they have to be responsible and pay down the debt. WRONG. In my experience with clients living in the “Bermuda Triangle of Finances,” there’s a delicate balance between being responsible and strengthening your financial foundation (i.e. savings). Life is always going to happen and you can’t plan for everything. With that in mind, it’s important that while you’re working a plan to pay off your debt that you’re also saving. Why you might ask? Because if you save as you’re paying off debt, eventually when something unexpected happens you’ll be more likely to have the cash to pay for it and you won’t have to add it to your debt and interrupt the process of paying down your debt. So take a portion of the extra money that you found in reducing your expenses and allocate it toward savings. I generally recommend that until you reach a savings balance equal to one month’s worth of expenses that you dedicate a portion of the extra money to savings and a portion toward debt.

And while the 5 steps above will help you systematically design an effective plan for getting out of debt, there’s also the emotional part of paying down debt to consider as well. Do not, under any circumstances, start depriving yourself of everything fun and good in your life! This will backfire every time, as eventually you’ll begin to resent your plan and you’ll sabotage your progress. Yes, it’s important to reassess your spending but don’t start living like a pauper all of a sudden!

Money management isn’t always sexy (unless you’re me and love it!), but taking things one step at a time is what it takes to work your way off the debt roller coaster and from potentially getting yourself in an even more stressful financial situation.

Image courtesy of Ponsulak / FreeDigitalPhotos.net

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