Ramit Sethi: How To Negotiate a $10K Raise

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With the costs of living soaring, many Americans are in desperate need of a raise. But how do you get one? Often, you’ll have to be your own best advocate and ask for one. This might sound scary and drudge up a drove of anxious questions, such as: “How much of a raise do I ask for?”; “What if they say no?”; “Will I anger my manager with this request?” 

It’s time to ditch those worried, racing thoughts and take action by tapping into the power of negotiation. In a new YouTube video, personal finance expert Ramit Sethi lays out how you can negotiate a $10,000 raise. Here are the steps he insists you follow to take your earnings to the next level.

Lay the Groundwork With Your Boss 6 Months in Advance 

“If you ask for a raise the right way, you’re going be way further ahead than 99% of other people who don’t try to negotiate their salary,” Sethi said. 

But don’t just leap into negotiations out of the blue. Plan ahead and strategize. “Six months before your next review, set up a meeting with your boss to lay the groundwork,” he said.

Sethi suggests sending your boss a note that expresses your interest in doing “an exceptional job” and being a “top performer.” Ask for a 15-minute chat with your boss to go over how you can reach these goals, and be sure to take a formal approach with an email invite. 

When you meet with your boss, do the following:

• Ask: “What does it take to be a top performer?” 
• Set three specific, measurable goals
• Agree to talk more about this over the next six months 

Sethi emphasizes the importance of getting specific and finding measurable ways that you can excel. Once you establish goals for yourself with your boss, let them know that you’ll be checking in with them about a compensation adjustment in about six months — but that, for now, you’ll focus on meeting the goals and keeping your boss in the loop. 

“Bosses love this!” Sethi exclaimed.

Then, you’ll send an email recap to your boss summarizing the key points of your meeting. This gives you a record of correspondence and formalizes the plan.

Keep Your Boss Updated

The second step in Sethi’s three-step negotiation plan for a $10,000 raise: keep your boss updated. 

“You never want to walk into a meeting about compensation and surprise your boss,” Sethi said. 

Sethi holds fast to a “no surprises” philosophy. To honor that, he encourages you to keep track of everything you do at work by recording the results you get and quantifying them as much as possible. This entails work. You have to be steadfastly tracking your progress and proving that you’re meeting your end of the deal and deserve that raise. 

“If [your boss has] to ask for a status check, you’ve already lost,” Sethi said. 

To keep your boss updated, Sethi recommends a technique he calls “closing the loop.” This entails checking in with your boss every two weeks. 

“You are closing the loop, letting them know what the status is before they ever ask,” Sethi said. “I recommend doing this every other week.” 

After weeks, or months, of hitting your goals, Sethi says to mention to your boss that you’d like to discuss compensation at a meeting next month. 

“This can be a separate meeting from your normal review,” Sethi said. “Or, ideally, since you started this process six months before your review, you’ve given yourself time to hit your goals and then discuss this in your normally scheduled review.” 

Get Ready To Win 

“This is the culmination of all your preparation and hard work,” Sethi said.

You’ve laid the groundwork with your boss. You’ve accelerated to become a top performer. You’ve exceeded expectations. And, you’ve tracked your progress. 

Here is where “the briefcase technique” applies. You need four items to come prepared with: 

• Current salary 
• Competitive salaries from other companies
• List of accomplishments
• Additional ways you can add value to your company 

“In this meeting, you’re basically saying, ‘Six months ago, we had this fantastic conversation. I came in letting you know I wanted to be a top performer, and I do. I wanted to make your job easier, and I do. And I want to help this company grow. I came up with three goals. I hit those goals — leading to the company being more profitable,” Sethi said.  

And then, you take the win! You accept all the accolades. But the journey to the $10K raise doesn’t end there. 

Here’s where you discuss that aforementioned compensation adjustment. At this point, you lay out your current salary and then point out where the industry is at in terms of compensation. You’ll need to do some hefty research around what others in your field make to back your case and to show that you are being underpaid. 

From there, you can initiate a conversation about an increase in compensation.

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