There is nothing easy about a job interview. Etiquette says dress up, even if your interviewers arrive barefoot in blue jeans. You should smile, but not too much. You should be humble and confident at the same time. You should write a thank you note. But what about salary?
Addressing salary while moving into a new role in a new company can feel as difficult as landing the job, itself. And while finding a fulfilling position is important, your income should also be a factor. You deserve the dream job, and you deserve an income that makes that job sustainable.
According to a recent survey, only 37% of employees even attempt to negotiate for their salaries -- and in 2018, that's got to stop. Emily Post never gave us any intel on the etiquette surrounding salary demands, but fortunately, there are a few steps proven to work. You don't have to choose between decorum and financial stability.
First things first, professional negotiators recommend doing your research before an offer is even on the table. Know what people in similar positions are earning, and be prepared to defend yourself if your eventual offer doesn't comply with industry standard. This doesn't mean you should throw a number at an employer during your first interview -- it'll give you the upper hand to wait until you've got have a sum to negotiate with. But be sure you're prepared when going into this conversation. Know what your counterparts are making, and go from there.
When it comes to finally having the money conversation, finance journalist Alison Doyle recommends remaining neutral. "Negotiations needn't be adversarial, and no one has to get aggressive. If you're a reluctant negotiator, it might help to keep in mind that you're on the same side." she writes. Approach the conversation with a sense of camaraderie -- technically, there are no enemies. You both want your services.
"The team has invested time and resources in the interview process, they have consensus on hiring you and they're eager to seal the deal and put you to work. This is the perfect time to talk salary," adds journalist, Robin Madell. Ultimately, you and your employer are a unit, and they want you here. If they were underselling you, they'll want to make it right. They, too, are invested.
If you have pre-negotiation jitters, keep in mind the fact that most employers actually expect to have a little back-and-forth when it comes to salary. The number attached to your initial offer is often ever-so-slightly lower than it could be, in the event that you push back. Your reluctance to talk about money here may be polite in an old school dinner party sense, but those rules no longer apply. Certainly no one will think less of you for negotiating.
Once your discussion is actually underway, if it feels like your negotiations have come to a halt, Doyle recommends negotiating benefits. There may be some other aspect of your financial compensation with a little more wiggle room, be it an office perk, or a health insurance package. Try to take a look at the whole financial picture, and be flexible when it comes to options that don't apply strictly to salary.
There is, of course, the distinct possibility that you will never arrive at an offer that feels substantial to you. If this happens, don't be afraid to say no. Again, this might feel counter to the rules of decorum, but this is 2018, and sometimes self advocacy requires a little bluntness.
"I turned down a position I knew I didn't want, regardless of salary, and received three follow-up phone calls upping the compensation package," Doyle reports. Like with haggling, the word "no" can be powerful. Sometimes, the thought of losing you as an employee will be enough to kick a full negotiation into gear.
On the other hand, know your own situation. Don't push too hard if this doesn't feel feasible. There are times when budgeting doesn't allow what you're fighting for, and if you truly need the hours or the title, check yourself before you deliver a flat no. Walking away with less than you deserve is no fun, but it's equally problematic to walk away with nothing.
"The main reason employees aren't paid what they're worth isn't because they don't deserve it," Madell writes. "It's because they don't ask." This is important to keep in mind.
You only get what you negotiate for, and in 2018, job offer etiquette urges you to make that request. Earning what you deserve is your prerogative. That shouldn't scare you, it should empower you.
- How to negotiate salary in 2018 - Complete salary negotiation guide ›
- How to Negotiate Your Salary ›
- Salary Negotiation Guide: How to Negotiate Salary - PayScale ›
- How to Negotiate Salary: 37 Tips You Need to Know - The Muse ›
- Salary Negotiation Tips (How to Get a Better Offer) ›
- Ten Things Never, Ever To Say In A Salary Negotiation ›
- How to Negotiate Your Salary - Glassdoor Guide ›
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.