Tag Archives | Financial plan

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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Why Celebrations are Important

By on February 6, 2014 in Financial Celebration

PIC_Feb 6th_ARTICLE_Celebration pic with DanaOK, so you might be thinking to yourself – Beth, we just wrapped up the holiday season full of celebrations, and you want us to celebrate AGAIN?

Yup, I do. Celebrating is a lost art form as far as I’m concerned, and to be quite honest I’ve personally had to train myself to do it more often to acknowledge not only the big things but also the little things too!  Yes, I’m a “celebrator-in-training” just like many of you might be.

As I’ve found over the last few years (and more specifically over the last 6 months if I’m being honest), like attracts like which means success attracts more success and celebration attracts more celebration.  In other words, the more you acknowledge something great, the more the Universe will say “oh, he/she gets excited about that – we like excitement – let’s give him/her more of that!”  (Yes, I’m going a bit spiritual here with some “Law of Attraction”…so bear with me if that’s not usually your “thing,” ok?)  Celebrating raises the positive vibrations surrounding you and encourages more of the same positive results to be delivered to you.

As an example in my own life (since I always find it helpful if someone shows me how to do something new that I’m trying to learn), I’m thrilled that January 2014 was the best month EVER in my business and that I found 6 brand new and amazing clients to work with in the months to come!  I started my celebration this past weekend with some much needed “down time” to relax and really let everything that had happened this month sink in and then I celebrated with friends and family (see the pic of me having a celebratory cocktail with a good colleague last week in the picture!).  I also played hooky earlier this week to sneak off and see a movie by myself during a snowy day when I didn’t feel like working.  And this is just the beginning of my celebrations – I really want to anchor what this last month felt like, because I want more of that type of amazingness (so that’s probably not a word but who cares, I’m excited!)!

As it relates specifically to your finances, sometimes the road to financial freedom and financial independence can feel long.  Truth be told, that road is paved with small steps taken over time to build up your financial skill set and financial health – proactive money management skills and a well thought out financial plan doesn’t just come together overnight!  On your lengthy financial journey, there are likely some things that you can celebrate and acknowledge for yourself, so let me get you started with a few ideas:

  • You opened your latest statements for the first time in a long time (bank, credit card, etc.);
  • You reconciled your checking account;
  • You listed out all of the debt that you owe with corresponding details (interest rate, due date, min. payment);
  • You put together a Net Worth Summary (Assets – Liabilities);
  • You looked at one month’s worth of cash flow (income and expenses) to get a better understanding of how you use your money;
  • You got a raise at work;
  • You started a savings account;
  • You saved up for something in advance and paid for it outright;
  • You paid down (or paid off) a piece of debt;
  • You had a money conversation with someone important to you (spouse, friend, co-worker, etc.);
  • You reached out to a financial professional for help with something (taxes, investments, insurance, etc.).

The ideas above may not feel like much (and clearly there are many more examples that I could include), however I’d like to encourage you to see each step on your journey to financial freedom as something worth celebrating.  And, of course, I believe in celebrating in moderation or within appropriate parameters given your individual circumstances!  Sometimes the best celebrations don’t need to cost much (like the movie I snuck off to see) or they don’t cost anything (like the dream car I’m going to go and test drive this weekend just because I can…it’s free, at least for now!).

And lastly, when you’re wanting to truly acknowledge and anchor successes in your life (in any area, really), I’m also a big fan of having a “success journal.” What is that, you ask?  It’s a chance for you to write down each of the successes (big and small) that you have along the way because sometimes we forget our successes and we need to go back and read them to be reminded of the good that we’ve done!  I keep a success journal by my bedside and each night before I go to sleep I list my top 5 successes of that day (financial and other).

So what have you done recently to improve your financial health that you would like to celebrate?  And if you haven’t done anything lately, is there something small that you can do to get yourself started and in action?

Start small, take action, celebrate and document your success along the way…and then rinse and repeat!

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How to Realign Your Finances in the New Year

By on January 8, 2014 in Financial Alignment, Money Management

It’s everyone’s favorite time of year to talk about resolutions, and one of the biggest ones is typically in the area of money and finance.

But there’s a problem with resolutions from the way that I see it – the energy of the word “resolutions” is just so damn HEAVY.  In fact, I really dislike the word “resolutions” (and I would actually say that I hate it if my 3-year old nephew wouldn’t tell me not to say “hate” because it’s a bad word…Auntie Beth has been humbled a few times on her vocabulary lately by her favorite young men.)

Don’t get me wrong – I fully encourage anyone to make a commitment to learning more about proactive money management and to gain clarity about how they’re using their money on a day-to-day basis, while saving money and getting out of debt.

It’s simply that I prefer to think about new possibilities instead of resolutions. Inspire yourself instead of feeling heavy about making what can sometimes be a scary change if you’ve never learned how to manage your money.  Ask yourself this question – what would life be like IF I knew how to intentionally, authentically, and proactively manage my money?  My guess is that this question will get you thinking in a more positive manner about why you want to improve your financial knowledge (instead of simply feeling like you “should”).

Also, be realistic – I find that people are often looking for a one-trick-does-it-all solution.  I’m here to tell you sadly that it’s not there…sometimes it took you a while to get into the situation you’re in, and so the reality is that it might take you a while to get yourself out of it.

So if you’re looking for a way to begin connecting with and realigning with your finances in a more powerful way, here are 3 steps to help you get started on improving the state of your personal finances:

 

1)    Assess the level of your financial health – Depending on whether you’re looking to build, protect, or grow your financial assets, you may require a different level of expertise or support.  While the majority of people I meet (i.e. 70% of people living paycheck to paycheck) often need help with learning the systems and structures of an effective money management system so that they can build a stronger financial foundation, sometimes people may need help with protecting what they already have (i.e. insurance, estate planning, etc.) or growing what they have (i.e. financial planning).

If you’re looking to protect or grow what you have, the best bet is to ask colleagues, friends or family members for a referral to a trusted professional.  However, if like most people you’re at the beginning phase (building) of understanding your financial situation, then the next 2 steps will help you to get the information you need.

2)    ASK: Where am I now? – When I’m trying to share with clients and people I meet how they can get started on improving their finances, the first thing I explain is the concept of using a “financial GPS.”  It’s similar to the GPS that we use in our cars, it’s just for finances – and without this you are forever trying to get to a destination that you can’t efficiently get to (remember how the shortest distance between two points is a straight line?)!  When you’re programming a GPS, you need to type in a “point A” – for your finances, this means that you need to understand where you currently stand before you can really make any impactful decisions about how you can get where you want to go.

In order to determine your financial “snapshot” (or point A, if you will), there are 2 main steps to take: 1) understand your Net Worth (Assets minus Liabilities) and 2) understand your monthly cash flow.  For the cash flow, I recommend summarizing at least 3 months of recent cash flow in order to have a solid base of information about your money map (i.e. income and expense details).  (PS – I know that pulling together this information can seem scary sometimes, but take it one small step at a time…and keep breathing, it will be worth it in the end!)

3)    ASK: Where do I want to go?  As you know, the next part of programming a GPS is to set your destination…or point “B,” if you will.  What are your goals (financial and otherwise) in the next year, 5 years, 10 years, or beyond?  Do you want to focus on eliminating debt?  Saving more?  Taking a trip?  Starting a college fund for your child?  Deciding how you want to consciously use your money as a tool to achieve your goals is a really important part of designing a financial plan that works for you and your life.

 

With these 3 steps, you’ll be able to better understand what I like to call your level of financial alignment.  In other words, are you using money in a way that truly supports what you want in your life? Or, are you doing as many people do and spending unconsciously without thinking about whether you’re spending on things that matter to you (what I like to call being “financially authentic”)?  Being financially aligned and authentic can have a tremendous positive impact on eliminating financial struggle and strengthening your financial foundation as quickly as possible.

In the end, while the steps are simple they will take some time, however I promise that by understanding the “point A” and “point B” of your personal financial GPS that you’ll move more efficiently (in a straight line!) toward your goals.  As I always say, money is a tool that when used powerfully and to your advantage can provide you with more choice and the ability to contribute in a bigger way…is 2014 your big year?

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How to Assess and Improve Your Level of Financial Health

By on December 11, 2013 in Financial Freedom, Financial Health, Financially Authentic

When I first started working as a financial coach, many people would mistake me for a financial advisor or financial planner.  They thought I was someone who would help them learn how to invest their money for retirement.

And while financial advisors and financial planners are dear colleagues of mine and are very talented professionals, my work is very clearly in a different space where I’m helping people with their budgeting and money management skills so that they can focus on getting out of debt and saving money with the hope of building a financial plan to support their goals.

So in order to help people better understand what I did (and what I didn’t do), I created what I like to call “The Financial Health Spectrum™” which includes the 3 phases of Build, Protect, and Grow your financial assets.  These 3 phases simply reflect different levels of financial health, and while none of the phases are “bad” there is an increasing level of financial health as you move from the “Build” phase through to the “Grow” phase.  In helping people to understand what type of financial support they need, I encourage people to take a few minutes to assess where they fall on this spectrum so that they can properly identify which financial expert can help them with their goals and with improving their level of financial health.

In order to help you determine where you might fall on the Financial Health Spectrum™, let me explain each phase a bit further along with the respective professionals that you might want to connect with:

1)    Build phase – This phase is typically where the 70% of people living paycheck to paycheck who are feeling out of control when it comes to their finances will land.  When building your financial assets, you’ll be looking to do such things as establish a budget (or what I like to call a “savings and spending plan” because budget is such a restrictive word), develop more proactive money management skills, get out of debt, and save more money.  To me, this phase is about improving your financial stability and strengthening and repairing your financial foundation so that in the future you can grow your financial assets. In this phase, you might look to work with someone who can help you increase your income, decrease your expenses, or perhaps do both!  This is the phase where I work with my clients, and some other colleagues who can help you in this phase include CPAs, money mindset coaches (to help you understand if you have money beliefs that are holding you back in some way), and salary negotiation coaches (so that you can maximize your earnings).

2)    Protect phase – This phase is generally exemplified by wanting to either insure assets (property and casualty insurance, life insurance, health insurance, disability insurance, or long-term care insurance) or planning to have your wishes known about what to do with your assets in case anything happens to you.  Experts in this phase include licensed insurance professionals who can help you determine the right type and amount of insurance that you need and estate planning attorneys who can help you with drafting all necessary legal documents such as wills, trusts, family planning/guardianship paperwork, health care directives and proxies, and also Medicare/Medicaid paperwork.

3)    Grow phase – At the end of the spectrum, once you’ve strengthened your financial foundation and protected the financial assets that you do have, you’ll also want to think about putting your money to work for you and growing it through investments and other financial vehicles (i.e. annuities, etc.).  The financial professional you’ll want to consider in this phase is a financial advisor or financial planner who will take the time to understand your future financial objectives and design a plan customized just for you to grow your money over time to achieve your goals.

As mentioned before, there is no “right” or “wrong” phase to be in, these phases are simply an opportunity for you to recognize where you’re at right now and determine the next steps that you’d like to take for yourselves to improve your financial health.  I also encourage people to think about moving along the spectrum as a longer-term process since strengthening your financial foundation and building financial independence is often a multi-faceted journey that takes place over time and with attention to progress (and not perfection).  It is also important to note that you may be in more than one phase at the same time (i.e. saving for retirement while looking to more proactively manage your monthly cash flow and put the proper legal paperwork in place).

So if you’re ready to get more information on how you can assess your financial health, make sure to stay tuned for more details coming soon on “The Financial Health Telesummit” coming in January 2014.  It’s a free event that you can attend from the comfort of your home phone, computer, or your favorite listening device (iPod, iPhone, etc.) with some of my favorite colleagues and financial experts who will help you to decide on the next steps to take in improving your financial health!

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Managing Your Own Money Marathon

By on September 17, 2013 in Money Management

I say all the time to my clients: building your financial foundation is not a destination, it’s a journey.  It takes time, dedication to certain habits and routine, and focus on consciously deciding what really matters to you in life.

Back in late April, I made the decision to do something crazy that I’d never done before (and quite frankly, never thought I would do since I don’t consider myself an athlete).  I committed to walking 26.2 miles for the Jimmy Fund/Dana Farber Cancer Institute, a charity that is important to me.  Why did I do this?  For a few reasons: 1) I was ticked off at what happened at the Boston Marathon and was determined to participate in something that honored the people who died or were injured; 2) my Dad was a patient at Dana Farber from April 2008 – August 2009 and my family has a lot of kindness to repay so raising funds is important to me; and 3) I wasn’t doing very well with maintaining an exercise schedule of any kind and so I needed to set a personal goal that would stretch and push me.

As someone who didn’t necessarily view themselves as an athlete, how did I get started? I decided that it mattered enough to raise the funds for a good cause and if I was going to stretch myself in the process, why not a marathon (I’d done the half marathon 3 years ago, I could do this too, right?).  I signed up to participate in the event.  I looked for a plan to help me do what I had no idea how to do because I’d never attempted such a feat before.  I carved out time and scheduled the plan into my calendar of an already-busy life.

Isn’t it funny how a lot of the process I used for my walk applies to money management too?  You have to decide that it matters to you to be proactive with your money; you have to sign up (or show up) to learn how to do it; you have to develop a plan that works for you and; you have to find time to manage your plan and your money.

And the parallels go even deeper than that.  Here are a few of the key reflections I had about how marathons and money management are similar:

1)     You have to manage your resources effectively – For the marathon walk (and to some extent during my training as well), I had to fuel myself regularly with water and food along the way but at the same time I didn’t want to carry anything too heavy.  So I didn’t carry much with me and every few miles at a rest stop I had to decide how to refuel and adapt accordingly.  I also had to decide when to reapply gel to my feet so I wouldn’t end up with raw feet and nasty blisters!  It was a bit like balancing a budget (I know, such a horrible word…savings and spending plan is so much better) as I had to stay in touch with my energy and fuel myself as appropriate.  In terms of a financial plan, you’re always able to manage your resources more effectively if you know what matters and what doesn’t so that you’re not using money wastefully on things that don’t make you happy.  Manage the money you have!

2)     Having a plan offers a framework for smaller steps to lead to bigger steps – When I found a plan online to use for beginner marathoners like me, I instantly sighed in relief.  I wouldn’t have to do it alone, someone (or the plan) would help me know what to do.  The plan kept me on track, focused and aligned with the smaller steps along the way that would be necessary to get to the bigger step of the actual walk.  In managing your money, smaller steps like monthly deposits in your savings account can add up in the end to helping you make a big purchase or serve as a stable source of money in the event that something unexpected comes up.  And in the larger scheme of things, smaller proactive steps managing your money can ultimately also lead to financial stability in the short-term and a secure retirement in the longer-term.  In a nutshell, if you do the work to take the smaller steps, you’ll reap the rewards of the larger steps later on down the road.

3)     TRUST the process – One of my favorite sayings is that it’s not about the destination, it’s about the journey and who you become in the process.  I trained for 4 months, and some of those days were super hard.  I also sweat something awful most days in the New England summer humidity, yet I kept on walking.  After an 18-mile training walk on a Sunday in mid-August, I somehow bruised my left heel and had to take a whole week off from training just several weeks before the event (can you say freaking out?!?!?).  Truth be told, there were several moments where I heard the voice in my head say “can you really do this?”  But I had to trust that everything was happening as it should, and use my plan as a guide and adapt as necessary.   That’s just what it’s like with a financial plan – you set it up with the best of intentions and use it as a guide most of the time but when life throws you a curveball that you weren’t expecting you have to trust and adapt.  Managing your money proactively and using money as a tool to support your life is like the training that I did, so that you can enjoy your life now (the journey) and in the future (the destination).

Sometimes people think that managing money is too hard of a skill to learn and that they’re the only ones who don’t understand it.  I’m here to dispel that myth once and for all as I’ve proven that money management is a teachable and a learnable skill if you’re willing to train yourself in effective and efficient money habits and routines.

And all I have to say to that is if I can complete a marathon walk for charity, then trust me – learning how to manage your money will be a piece of cake in comparison (and I’m pretty sure you won’t walk funny or have blisters when you’re done!)!!!!

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