I just got a promotion with better hours and pay. Any tips for negotiating a salary?

Dear Dave,

I’ve always made good money at my job, but recently I was offered a promotion to a salaried manager’s position. The hours and pay would be much better, and I already know the approximate pay range. Do you have any tips for negotiating salary in a situation like this?

Natalie

Dear Natalie,

Congratulations on your move up! I’m sure you worked hard and deserve the promotion and recognition.

There are a couple of measuring sticks you can use when determining something like this. One is a quick and simple approach associated with the revenue you bring in. It’s a nice, quantifiable reference point that appeals to a lot of supervisors and business owners. The second thing you could do is research a few reputable career websites, and develop a short but detailed compensation study based on comparable positions in your area and those similar to your location. Honestly though, if I had a valued and respected member of my team moving up from hourly to salaried, we’d have more of a give-and-take discussion and examination of the situation rather than a negotiation.

Yeah, in your position I’d create a few well-researched compensation studies. Give them to your bosses, and talk with them. I know I would be impressed by that, and depending on the size of the company, they may not have done a lot of work figuring it out.

In a way, it’s kind of like deciding what to ask for when you sell a car. You try to appraise it for what it’s worth in the marketplace to other people. That leads to a discussion. You’re not telling them what to do or presenting an ultimatum, you’re providing information and conducting a dialogue in a professional and respectful way.

Good luck, Natalie!

—Dave

Dear Dave,

I will back on active duty soon in the armed forces. I’m debt-free except for my home, have been following your plan, and I’m about to start Baby Step 3. We are provided certain relief funds based on where you are stationed and other factors. Knowing this, how should I approach the next Baby Step?

Kevin

Dear Kevin,

First of all, thank you for your service to our country. You’re on the right track. Baby Step 3 means having three to six months of expenses set aside for emergencies. Considering the stability of your employment situation, I think you’d be okay leaning toward the three-month side of expenses. It’s not like you’re a straight commission sales rep whose income can fluctuate wildly from month to month, right?

You’ll still have emergencies, though, and it’ll be your responsibility to cover them. Some of those may need to be addressed immediately. See what I’m saying, Kevin? Everyone needs an emergency fund. Just make saving for it part of your budget for a while, until you have three or four months of expenses sitting in a good money market fund with check writing privileges. You’ll be glad you did!

—Dave