There is one simple thing that anyone (especially college graduates) can do to change their financial life for the better for years to come. It only requires a little bit of work and a dash of confidence.
This one simple step can lead to thousands of dollars more in income, a higher net worth, and a gateway to paying off those pesky student loans.
Yet so many graduates or others changing jobs are neglecting this necessary step: negotiating on salary.
A recent study from NerdWallet and LookSharp found that a mere 38% of survey respondents negotiated with their employer when receiving a job offer. This information is even more striking when you consider the fact that the study also found that three-quarters of employers said they had room to negotiate and increase salaries five to ten percent.
For graduates looking at a starting salary of $40,000, that is an additional $2000 to $4000 each year. That amount of money could shave months off your student loan repayment timeline. Not only that, but if you were to invest that money over forty years, you’d set yourself up with a nice nest egg.
So, what is holding people back from negotiating for a higher salary? I’d venture to say it’s mostly fear or simply being happy with “just having a job.” I know when I got my first career job I did not negotiate my salary, because I was just happy to have a job in the first place.
Of course, it’s nice to be grateful. But this is your future we’re talking about—and this one step can change the course of your financial life and increase your earning power far more than if you never negotiated.
Here’s a step-by-step process on how to negotiate your salary.
Do Your Research
Before you even apply for a job, do your research on what typical salaries look like for your desired job in your area. Check out sites like Payscale and Glassdoor to get an idea of what people with similar jobs are making in your area.
You’ll want to empower yourself with information and not undercut yourself in the negotiation process. Conversely, you want to know the general range of what people are getting paid for your type of work. This can provide a strong foundation for your negotiations.
Know What You Are Worth
After doing research on typical salaries in your area, start taking an inventory of your skills and abilities so you truly understand what you are worth and ask for what you want. Consider the following:
- Do you have any specialized technical skills?
- Do you hold any certifications that can help you perform the job?
- Do you know another language that will help you perform the duties of your job, or that could help the organization as a whole? (Side note: one of my biggest regrets is not negotiating more for a job where I spoke Spanish every day and was asked to translate materials. This was a unique, specialized skill in the office and one that I have spent a lot of time and money mastering.)
- Do you have any other skills that could elevate the company’s growth?
These are important things to consider when determining your value. You want to be crystal clear about what you bring to the table and be able to confidently showcase your individual skills and abilities.
Negotiating is all about selling yourself and what you offer—yes, it can be uncomfortable and scary, but if you flip the script and think of it as commanding what you are worth, you can empower yourself and your finances to earn more money.
Many people are scared to negotiate. Perhaps they feel like they are asking too much, they are scared of rejection, or they are worried about coming off as ungrateful or aggressive.
It’s essential to put your personal feelings aside and remember that this is business. This is your life and your financial future at stake. The good news? According to the NerdWallet study, 76% of employers said that employees that negotiated appeared confident when doing so.
Put your fear to rest and start preparing. Negotiation is a delicate balance of asking for what you want while demonstrating, in a tactful way, why you are worth it.
One great tool to have in your repertoire is the Briefcase Technique, by finance expert Ramit Sethi.
The premise of the Briefcase Technique is that just as you are about to discuss salary, you bring out a proposal document that includes areas of the company that you’d like to improve and tactical solutions about how to do it. This accomplishes a few things:
- It shows you’ve done your homework on the company. (Always do research on the company. Check out their website, look at their staff on LinkedIn, etc.)
- It shows you are tenacious and proactive. Employers like go-getters who want to solve problems. The biggest mistake people make when applying for a job is talking too much about themselves. Employers don’t want to know why this is your dream job—they want to know how you can solve their problems and make their lives easier. Think of it from their perspective. They are looking for someone to solve problems and keep things moving. Using the Briefcase Technique, you can show in explicit detail that you’ve reviewed their company and know exactly how you plan on growing with the company.
- It sets you apart from the competition. In order to get the job and command a higher salary, you need to make yourself indispensable to the company—even before you start working there!
In addition to the Briefcase Technique, arm yourself with more tools and resources by checking out this comprehensive Salary Negotiation Guide.
Practice, Practice, Practice
The last step before you go for the gold is to practice, practice, practice. Negotiation is a learned skill.
Sure, it may come more naturally to some than to others, but it’s still a skill that can be learned by anyone with some practice.
Practice in the mirror. Practice with a friend. Record yourself on video and study it to find ways you can improve.
How to Have the Salary Negotiation Conversation
So, you’ve practiced and prepared. You’ve done your research and now it’s game time. Your prospective employer offers you the job and a starting salary. What do you do now?
Be firm, yet polite.
“I’m really excited about this opportunity and I know that I will bring a lot of value to this company. I appreciate the offer of $40,000, but given my experience and skill set, I was expecting $45,000. Can we look at a starting salary of $45,000 for this position?”
Appear confident, don’t fidget, and maintain eye contact. It’s their turn to say yes or no, or negotiate further.
Be clear on what you want and know your walking-away point. If you won’t work for less than $45,000, then don’t accept an offer for less.
You can also try to negotiate other aspects of the job if they are not flexible on salary. Consider negotiating for more vacation or personal time, or even a more flexible schedule. Remember, employment is a two-way street.
Once an employer is ready to make an offer, they’ve already decided that you are the best candidate, so it behooves you to learn how to negotiate your salary and get what you deserve.
Using these tips, you can master the art of negotiation and know exactly how to effectively negotiate your salary and increase your earning power right from the start of your career.
Interested in refinancing student loans?Here are the top 8 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.20% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of December 13, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 12/13/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Figure.
Figure’s Student Refinance Loan is a private loan. If you refinance federal loans, you forfeit certain flexible repayment options associated with those loans. If you expect to incur financial hardship that would impact your ability to repay, you should consider federal consolidation alternatives.
4 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 1/1/2020. Variable interest rates may increase after consummation.
5 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
6 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
7 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.76% effective November 10, 2019.
8 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 12/019/2019 student loan refinancing rates range from 1.90% to 8.59% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
|1.99% – 6.89%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|2.06% – 6.81%3||Undergrad & Graduate|
|2.62% – 6.12%4||Undergrad & Graduate|
|2.29% – 6.65%5||Undergrad & Graduate|
|1.99% – 7.06%6||Undergrad & Graduate|
|1.81% – 6.29%7||Undergrad & Graduate|
|1.90% – 8.59%8||Undergrad & Graduate|