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Money Help From Ramit Sethi; How to Get a Raise

By in Make Money, Tips, Wealth | 15 comments

Money Tip-Simple Strategy to Get a Raise

Although I met Sethi at a Financial Blogger’s Conference several years ago, read his book I Will Teach You to be Rich, and subscribed to his newsletter, I had some difficulty understanding his tremendous popularity. Yes, he’s smart, charismatic, and creative, but what was the allure? I opened a news blast, read the entire copy, clicked the link, and read that entire copy. Sethi offered a five minute life changing tip.

  • The first email blast title: The haunting reasons we feel out of control
  • I clicked through to : New Data, what you told me about control over your life

Maybe he has something here. Are you curious? I certainly was.

How Does Your Salary Match Up?

His readers wrote back in droves about feeling lack of motivation and control in their lives. They had too much debt and not enough income. Some complained that their jobs were too inflexible and others shared that a $5,000 unexpected expense would put them over the edge. Their financial and job stress was palpable.

The solution, according to Sethi was to find an extra $5,000 to improve your life. Although simplistic on the surface, for most readers, an extra $5,000 income per year could be lifestyle changing.

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And here’s Ramit Sethi‘s starting point to find this extra cash. The solution to feelings of loss of control was elegant:

He implored his readers to compare their current salaries to the averages of their colleagues in similar jobs and then report back.

“Go to my 3 favorite salary sites — salary.com, glassdoor.com, and payscale.com — and look up the average salaries for your position and experience. Note that we’re using 3 different sites to diversify the data.” Ramit Sethi private list

ramit sethi - how to get a raise

How to Get a Raise?

The next recommendation: find out how your salary compares with others doing comparable work in your field. This knowledge alone tells you whether there is room for a raise. If the average annual salary for your job title and level of experience is $50,000 and you’re making $42,000,  you’ve got a starting point to negotiate a higher salary.

I loved this idea. Take this simple exercise and use it as a starting point. If you are paid less than the average, you have concrete data that there’s room for a raise.

I’m a master negotiator and attempt to improve my financial well being through negotiation at any opportunity. Following are basic negotiating strategies to take to your superior when you ask for a raise.

Advance Preparation for the Salary Negotiation Meeting

1. Write down every contribution you make to your organization. What have you done to make money for your firm? How have your efforts propelled the organization forward? Look over any positive reviews, or comments from customers and superiors. What ideas did you put forward that made the institution better? Do not overlook or minimize anything.

2. Schedule a meeting at a convenient time with the decision maker. It’s better to choose a time that’s earlier in the day. Avoid stressful times. After successfully completing a project is a great time to schedule a meeting. Avoid early Monday mornings and late Friday afternoons. Everyone is distracted at those times.

3. Remember, this is a negotiation. Decide in advance how much to request by incorporating your research and then add a bit to the total to allow room for some back and forth.

4. Have a Plan B. Be prepared if your first request is denied, have other alternatives at hand; more vacation time, a smaller raise-8% instead of 10%, one day per week to telecommute, or some other perk.

At the Salary Negotiation Meeting

1. Have a plan. Keep at hand all of your research including comparable salary data and your personal accomplishments.

2. Begin by discussing all of your contributions to the firm.

3. Next talk about the comparable salary statistics.

4. Ask for your top figure (remember, the higher number leaves room for some negotiation).

5. Listen to your boss’s response carefully. Pause. Respond positively to any criticisms. For example, your boss states you’ve been late a few times. You respond by saying, I’ve rectified that former issue and arrive early or on time. Pause.

6. After a negative response, don’t quit. Repeat; do not give up with a “No” response. Come back with an alternative (check out #4 above)

7. Last ditch effort. If you have no success, let your boss know that you would like to revisit the issue in several months. And then make sure to follow the same steps in 3 to 4 months.

What are your tips for getting a raise?

A version of this article was previously published (comments remain intact)

    15 Comments

  1. My mom has a little book called “Wisdom According to 8 Year Olds.” My favorite is from a girl named Melissa. “If you want a kitty, start out by asking for a horse.”

    AverageJoe

    August 9, 2012

  2. Ramit has a very specific niche. Ultimately, he is engaging his readers to do some homework before they ask for a salary increase or raise the fees they charge for their freelance work. Unfortunately, I find many people do not use their critical thinking and research skills. Using his psychology degree from Stanford helps him dig deep into people emotions and help them get rid of their fears.

    I always use salary.com and payscale.com. Glassdoor.com didn’t know about at the time I was researching salaries.

    My tip would be to get good at marketing yourself. In addition to the collection of accomplishment, learn to present yourself and ask questions that will prompt a “yes.”

    Ornella @ Moneylicious

    August 9, 2012

  3. @Average-That book sounds sooo cute. I like the analogy.
    @Ornella-Great advice, as usual. Marketing oneself is a never ending endeavor. No matter how difficult, if you don’t pump yourself up (in moderation) how will others know what you’re up to?

    Barb

    August 9, 2012

  4. Taking control of your circumstances is great! In most cases, you can get a raise, but not everyone will be successful. I guess those people should be prepared to leave. That characterizes most successful negotiation, you have to be prepared to walk away.

    krantcents

    August 9, 2012

  5. Patience, research, and not being afraid to negotiate. We are all worth more than we think usually. Just need to ask for it.

    I didn’t know Ramit worked after college. What did he do for a living?

    Financial Samurai

    August 9, 2012

  6. I’ve never had to do this, but it seems intimidating…haven’t read much of Ramit, but seems like good info and info gives you motivation and confidence as you go for your negotiation.

    Brent Pittman

    August 9, 2012

  7. @Krantcents-Being willing to walk away… or settle for a “not rigt now,” response.
    @FS, I agree that it’s easy to under value our worth. The research really helps with knowing your own economic value.
    @Brent-Of course it’s intimidating, just dive in and give it a try. Worst case scenario, a NO answer.
    @SB-Glad his site helped you. In what way specifically did you benefit?

    Barbara Friedberg

    August 9, 2012

  8. I do really admire Ramit’s ability to translate complex notions in doable little steps. It helps a lot of people ‘eat an elephant’. And cool tips on salary negotiation.

    maria@moneyprinciple

    August 10, 2012

  9. Joe! That is gold! Ramit has a lot of good information if you can deal with his personality 🙂 Glad you found some useful info from him like I have over the years.

    Lance @ Money Life and More

    August 10, 2012

  10. @Marie-I like the “eat an elephant” metaphor. I’m always working on that one.
    @Lance-He has really created an amazing empire.

    Barb

    August 11, 2012

  11. Barbara,

    Although all of these points are valid. I’ve found that the best way to raise salary is to invest in your supervisor’s success by asking him what are his top 3 priorities and articulate a plan to help him achieve success. In the last few years, I’ve received over 40% raise (well in to six-figure) by working on a project without a budget(like a mad man) to help my Group VP to secure Senior VP position. In return, he asked me to accept a position with 40+% raise. It’s that simple.

    Shilpan

    August 11, 2012

  12. @Shillpan, Masterful strategy. I would like to invite you to write more about this inventive approach in a guest article. Very clever.

    Barb

    August 12, 2012

  13. It will be an honor to write a guest post for you.

    Shilpan

    August 12, 2012

  14. @Shilpan-Great, I’m excited!! I’m sure the readers will welcome your tips to get ahead in the work world!!

    Barb

    August 12, 2012

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