How To Talk About Money

Talking about money makes most people nauseous. I'm not a psychiatrist so I can't say with certainty that I understand why this is, but it's fun to speculate so let's...

I think the main reason people have a difficult time discussing money is that money brings up how you feel about your own personal worth and most of us don't value ourselves as much as we should. Of course, I've bumped into a few presumptuous windbags who place more value on themselves than they should, but nowhere near the number that undervalue themselves.

When you lack confidence in your worth, it makes sense that you would be anxious and nervous about discussing your worth. I spend a great deal of time with my clients discussing their worth and helping them raise that bar.

Having consulted with thousands of clients about this, I can tell you that building confidence with words of encouragement and reminders and reinforcement regarding your accomplishments, it's pretty easy to get you to come to grips with your true value. Once this is accomplished negotiation becomes more comfortable and less overwhelming for you.

It's also true that most of us don't appreciate the value of how much we know because when you know something well you tend to believe that everyone else knows it too. They don't. Not like you. Not from your unique perspective.

I've heard this referred to as "the curse of knowledge", but whatever the name, it's real. You need to start speaking to people you know and trust and allow them to help you boost your confidence. Listen to their feedback and opinions about how much you know and what you can bring to add value.

You can do additional deep dives into building your confidence and self-worth with trained professionals, but the point is to address them and start flexing those muscles

After you have addressed the issues around your value and confidence, it's time to learn specific tactics. Most of this advice works for all types of monetary negotiation. Starting salary, promotional salary increases, pricing your products or services, bonuses, equity, and outside investment. It works for negotiating the price of almost anything...

The biggest mistake people make when they discuss money is they speak too soon. As a general rule, you cannot and should not address your "price" until you understand all the details that may affect your price.

For example

• Before you price your products or services you need to understand all your underlying costs and both invoicing and payment terms. What is the guarantee period, the refund policy, and are there any hidden risks?
• Before seeking outside investment, you need to build a very specific case for how and when the investors will receive their returns and what those returns will look like.
• Independent consultants and freelancers need to know how long a contract might be and what might occur at the end of the contract (extension, permanent employment offer, etc...). They also need to understand things like payment terms, deliverables and resolution clauses regarding risk and liability.
• Salary discussions need to occur AFTER exhaustive discovery. You should never instigate a discussion about salary or any other self-serving issue (vacation, sick days, remote work, hours, bonuses, equity, or any other perks). You only answer when asked

These are just a few examples of scenarios around the timing of the discussion. The point is if you speak first or even early you have weakened your position, so check yourself and wait! Gather all the necessary information you need to make a decision, digest it, consider it, and then decide what to say.

A big question I get from candidates who are my clients is "What do I do if someone asks me what I'm looking for early on or I need to answer that question on an application before anything is discussed". It's a great question.

Some situations may require you to be specific simply to get to the next step in the process. In these cases, you may need to be specific.

In these cases, I would suggest a broad range to allow you to stay in consideration, but also leave you room for negotiation. If this broad range raises questions, you have the notion of discovery to back up your logic. Until you understand the details (duties, responsibilities, career growth potential, culture, commute, bonuses, equity...) you won't be able to accurately propose a figure. No one would

Use words like "open" and "negotiable" on applications when you can. If you're asked to have a conversation about money before you've been able to get all your questions answered, try to defend the position with our logic about discovery. Even if you are unsuccessful, you'll be able to revisit this point later if you need to. You've at least planted the seed. Sometimes that's the best you can do.

Another big mistake that many people make is that they don't sit down and specifically budget out exactly what they MUST have to live to their current standard (including tax withholding). This foundational benchmark is an important place to start and can be the point below which you walk away from the negotiating table. At the very least it's a very important part of your calculations and negotiation

Negotiation is NOT personal. Personal becomes emotional. Negotiation done well is done objectively based on facts, data, circumstances, and the inevitable assumptions that need to be made in every negotiation

If the numbers discussed initially are lower than you feel you're worth, don't make the mistake of personalizing it. Keep to the facts and search for opportunities to leverage your experience and reframe the position or the solution to whatever problems exist that have created the need. You don't have to jump at an unreasonable number...yet:)

The idea is to keep the conversation going until you get what you want or decide that isn't possible. The more options that you have to choose from, the stronger your position of leverage in each discussion

Ideally, by the time final figures are discussed, you know

• What your ideal number is
• How high you can reach to get as much as you can without losing the opportunity
• The number below which you walk away

I know it's commonly believed that salary surveys, job titles, and other people's opinions are useful tools to determine your worth for a particular position. These may be factors, but they can also be confusing, misleading, or flat out wrong.

Manager, VP, Director...What do those roles entail? What do they mean? Without the context, they're just words. Situations and circumstances are always too unique to do apples to apples with titles or other "similar" roles when it comes to money.

I'm not sure about the psychology behind this one either but people freeze when asked:

"What are you making currently"?

In 30 years I can remember one person who read me the figure from his last W-2. One. There may have been more than one, but I bet I can count them on one hand.

Don't squirm around this answer. It's a specific figure that you provide to the IRS. Separate salary from bonuses and perks but be exact and don't hesitate. If you are wondering what to say to this question you are not prepared for the negotiation/interview.conversation. If you're interviewing for a full-time job the reality is that you'll likely have to show pay stubs or some form of proof anyway as part of the application process so protect your credibility and be frank.

In all other negotiations, even when documentation isn't required, honest and simple is always the best default. The truth is the easiest version to remember

There are always unique circumstances around why you make what you make currently but the figures are not part of the circumstances, they are one of the results of the circumstances.

Tell your circumstances story as late in the process as possible. Bringing circumstances up early makes them sound like excuses. You are making what you are making because you accepted it. Bring your unique circumstances up at the end if they will help support your negotiation.

In my experience, most people don't care about your circumstances. They care about your value. If you've done a good job getting your value across, you won't need your circumstances

In all discussions that involve you looking for someone else to give you money, you should have two compelling sets of information

1. Stories

AND

1. Results

Your worth to anyone is based on a number of things, but the two within your control are your stories of accomplishment and the results of your direct efforts.

You should bring stories of accomplishment to all negotiations to support both your knowledge and your experience. These things define and detail your specific value.

Results will depend on the type of work you do. If you are in sales then revenue and units are your metrics. As a project manager, you might provide budget numbers, milestones met, and exceeded and perhaps direct reports hired and supervised. As a recruiter, I track calls, submittals, interviews, offers, and placements.

Everyone has a trail of results. Make your value very clear and specific. Take ownership of your responsibility for what that final number eventually becomes.

In all professional negotiations, you have a huge opportunity to directly impact the final number. The number should be more about what you are truly worth and less about what the last guy made or what other companies pay or what other people in similar jobs make.

We too often enter negotiation thinking that we're at the mercy of the company, the hiring manager, or the process. The truth is that's a choice you are making. You can come with a strong sense of your value, proper timing, great stories, and strong metrics...or you can hope and pray that when money comes up, you'll get lucky

Since you have the choice, why not get prepared and take control? Why not redefine the process and establish a new precedent? You can conceivably make any opportunity into what you want it to look like by bringing confidence and evidence of your abilities to the discussion. Don't assume anything and don't be afraid to ask and suggest alternatives

Alternative ways of getting paid, working hours, work location, and anything else that promotes productivity and results. Break new ground

Negotiating money does not have to be nauseating or intimidating. With the proper perspective, some simple tactics and some good supporting data, you can crush your negotiations and leave nothing on the table

To recap

• Get your mind right about your value and jack up your confidence with trusted feedback
• Don't speak too soon or EVER instigate the discussion about money. Be prepared to respond early and to wait patiently...or both
• Learn and practice these negotiation tactics
• Be specific and responsive about your current number
• Gather and rehearse the stories and metrics that support your worth
• Control the discussion and process. Don't assume you can't
• Know your 3 numbers (ideal, highest and walk away)

As a last resort, you can bring creative ideas to the discussion. Higher bonus and lower salary. Early compensation review so they can get you for less, but pay you once they confirm your value (3 months in writing for example). You can make yourself easier to hire if you need to but only if it makes sense for you

As a little bonus, I'll give you some words I use when coaching client candidates. Use them but add your voice. When someone wants a number early and you don't know enough to be specific yet

Interviewer: What are you looking for?

You: Frankly, I'm looking for the best combination of opportunity, culture, challenge, learning, and ability to impact growth and progress. Money in my experience has always been a by-product of all those things coming together gracefully. Since we have not yet discussed all those things, any figure I give you now would be speculative and potentially misleading. What I make now is a decent place to start the discussion. Nobody wants less money than they're making now of course, but I'm not here because of money.

If they don't accept this and you feel they are interpreting your answer as evasive, cave in with a range, but in my experience, this approach works far more often than not and you can always cave to preserve the opportunity

You can be successful at negotiation with preparation and the proper mindset. Reframe the way you are looking at it and take charge of the discussion. It is both timing and delivery. You can do this!

Peace

Mark

Author’s Note:

Many of the questions that I get from people in career transition produce answers that benefit other people in similar circumstances. My hope is that if you find this stuff helpful, you’ll share it with other loved ones that could use it too. Here are some other places to find my insights and share;

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If you want more help, the easiest way to engage me is to schedule a free 30-minute coaching call here. When we’re done discussing your situation, if you want further guidance toward a new career or business you can let me know. If not, I will leave you with some helpful suggestions. Sharing and feedback are encouraged.