For the next six weeks, we will be offering recent college grads financial tips that will help you adjust to life after college. This week’s topic is how to negotiate your way to a better price.
As a new graduate, there are several instances where you will likely need to negotiate. Understanding how to negotiate is a basic skill that you will need whether you are bargaining for a higher salary or a lower price on a new car. But how do you successfully negotiate with a boss or salesman? Here are the top three ways to prepare and succeed in your upcoming negotiation:
1. Do your research
Being an informed negotiator is the first step to a successful negotiation. Always start by researching the value, whether it’s median salaries in your area, competitor’s prices, or a car’s estimated worth. Having evidence of comparable salaries or prices is a great way to start the negotiation conversation as well as illustrate your knowledge of the specific topic.
2. Rehearse your lines
Giving away too much information can ruin your negotiating power. Avoid this by going over your key points before show time. You can also avoid “nervous talking” by bringing along notes to stay on track.
3. Stay professional
Negotiating can be an emotional ordeal but keeping your cool is essential. Michael Crom, the chief learning officer at Dale Carnegie Training states “Don’t get emotional or confrontational in any way. Don’t put the boss [or salesman] in a place where she will lose face.”
Of course, there are specific tactics to use when negotiating in various situations. For salary negotiation, consider asking for benefits like paid time off or a retirement fund if your employer is unable to increase their offer. This is a great way to negotiate a better deal without asking for a salary increase.
If this is your first job, be careful when bargaining for a higher salary. Many companies are willing to negotiate based on experience but recent graduates lack this real world knowledge. Instead of asking for more money upfront, ask your employer if they would be willing to reconsider their original salary after several months. This approach gives you time to prove your value to the company and therefore show that you deserve a higher income.
On the other hand, when negotiating the price of a car you don’t have to focus solely on the dealer’s listed price. The trade-in value of your old car can be a great negotiating point and can help you save thousands on your new car. Pre-determine the value of your trade-in beforehand and don’t be afraid to walk away. Letting the dealer know that you have other options will push them into giving you a great deal.
The power of negotiation is an important tool that you can carry with you throughout your life. By doing research, preparing notes, and staying professional you can become a successful negotiator in any situation.