Liz Weston: How to negotiate the path to a richer life
Negotiation is an important personal financial skill that can help you earn more and pay less. Whether you’re discussing a job, chatting at a car dealership, or trying to budget with your sweetheart, your ability to negotiate effectively can have a big impact.
You don’t have to be in a rush to be convincing. Kwame Christian, host of the “Negotiate Anything” podcast and director of the American Negotiation Institute, says the best negotiating tactics can win both sides. According to Christians, a confrontational approach (arguing, harassing, or asserting in its own way) makes others defensive and less motivated to reach consensus.
According to a survey by HR consulting firm Robert Half, most managers expect job seekers to negotiate salaries, but many don’t even try it when a job is offered.
You can prepare for negotiations by checking your payroll scale from the US Department of Labor Statistics, pay comparison sites such as Payscale and Salary.com, corporate review sites such as Glassdoor or Robert Half’s payroll guide.
“People make the mistake of not being well prepared. It’s one of the best things you can do to be effective in negotiations, ”says Christians.
Good negotiators also write a strategic plan that outlines what they want and how they intend to seek it out, along with a list of good alternatives, he says.
According to Christians, people with more information should usually make the first offer. Because it is the “anchor” that is at the center of the discussion. Wait for the person hiring you to name the figure so you don’t inadvertently do too many things. (If you’re negotiating a raise for a job you already have, you probably have as much information as your manager and can put the dollar amount in first, he says.)
We recommend that you decide on your salary before moving on to other forms of compensation, such as flexible working hours, new job titles, remote work capability, and paid time off.
“If you start with creative options, they might feel like you’ve given them enough,” says Christians.
To buy a car
In most negotiations, you will want to maintain good relationships with others. However, buying a car is generally a “pure transactional” exchange, which can make negotiations even more difficult, Christians say.
Research the car you want thoroughly before you head to the dealership. Look up the prices charged on car comparison sites like Edmunds.com and have some dealerships give you the best car prices.
“Find the lowest price comparison and use it as your first offer,” Christians recommend.
Knowing your bottom line (the maximum amount you want to spend on your vehicle) is especially important for Christians, as dealerships often take the bargaining process away to tire you out and pay more.
“I need to know very clearly where my starting point is,” says Christian. “And it seems so obvious, but people don’t do that.”
Budgeting with partners
Couples who communicate well expect a comfortable post-retirement lifestyle, rate their household health as good or very good, and money is their most important, according to a recent Fidelity Investments survey. He clarified that this is not a related issue.
But “money is emotional,” Christians say. He recommends recognizing and checking them out, asking partners free-form questions, and calming their emotions by knowing why they feel this way.
He cites his experience of starting his own business when his wife was suffering from the amount of money they were spending. The Christian grew up in a well-to-do family and wasn’t too worried about money, but his wife was raised by a single mother and experienced homelessness.
“Money is a survivor for her,” Christian says.
Instead of minimizing or discussing her experience, Christian says she asked lots of questions and admitted her feelings made sense given her past.
“Just getting into problem solving doesn’t make the person feel legitimate,” says Christian. “The emotional issues are still there.”
It was only after summing up what each partner wanted, that the couple began to negotiate results to meet both needs. Your goal here is to make sure you have a certain amount in your bank account. How do you coordinate these two things? “
If you skip any of these steps or try to discuss them when you are tired or worried about something else, you run the risk of pushing your partner away and making things worse.
“If you’re very emotional, the first thing you want to say is probably wrong,” Christian says.