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Hello, I'm Kelley Keehn. 

One of the trickiest times to talk money is when you're negotiating your starting salary. It's a tense situation and most of us would rather avoid it, take what's offered and begin our new job. But often that's not a good idea. To provide some expert advice I'm joined by Dr. Moira Somers, a psychologist who specializes in money issues. Welcome, Dr. Somers.

Dr. Somers: Thank you.

So why is negotiating our starting salary so important?

Dr. Somers: Kelley it can mean the difference of tens or even hundreds of thousands of dollars over the course of a lifetime, especially if this is one of your first jobs. So it's really important that you learn what to do. Our starting salary becomes a kind of psychological anchor or like the home button that we return to when we think about what we're going to ask for in subsequent jobs. And because most people don't accept less when they go to the next job or ask for a raise, where you start really determines where you'll finish. So it's important to learn how to negotiate.

So how do you do that? What are some tips to the 'how to'?

Dr. Somers: It's a tense situation for a lot of people but there are certainly some things that can set them up for success. One of them is simply to do the market research. That's just at the base of it all. You have to know what other people are making in other positions within the industry and what it is that they would be thinking of offering you within this company. So that's the first level. The next thing is to get the fundamental level of clarity about what you need. What do you need to make your life work financially, what are your commitments - you need to make sure you cover that as well as enough to put money aside for your future. So it's not just about meeting the monthly nut now but setting yourself up. And the third thing that you need to do is to practice the ask.


And is it just about the money, or are there other things that you recommend people ask for - title, better office, maybe some perks that isn't just about the actual salary?

Dr. Somers: There's so much more flexibility if you're willing to consider some of those things. So they may not be able to provide you with a bigger salary but they may be able to provide you with more holiday or flex-time and so getting clarity ahead of time about what makes for your happiness and what makes your life work better - is something that your employer really does have an investment in. Once they hire you, it's really a pain in the neck for them to lose you, so when you can tell them what you need and they can accommodate that, that's a really great start.

So you've come with a nice attitude, you've done some research. Is there a good or a bad time to negotiate, either your starting salary or if you've been in a position for a while?

Dr. Somers: There is some evidence that the first person to speak a number has the advantage in a negotiation. Again we get back to that idea of an anchor point. So the first person to speak the number sort of sets the tone and the rest of the negotiation will kind of be based off that number. So it's good if you know what it is they're thinking of offering you and then you state what it is that your assumption is.

What if somebody actually gets their courage to ask for a raise, and they actually get turned down? What's your advice there?

Dr. Somers: You know, you've got to get up again and recognize that what you just did through the asking was to build the muscle. Take the 'no' as a 'not yet', and don't be crushed by it.

Any parting advice?

Dr. Somers: Speak to a Certified Financial Planner® professional It's good practice, and they can really help you clarify what it is that you need to ask for.

And help you get through some of those difficult conversations.

Dr. Somers: Absolutely.

To find a Certified Financial Planner® professional in your area that will help guide you financially, use our Find Your Planner tool.

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For more information about having difficult conversations about money, watch the videos Loaning Money to Your Children and Couples and Money.