Suze Orman: Don’t Fall for This Common Salary Negotiation Trap
Written by
Laura Bogart
Edited by
Kristen Mae
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You’ve worked hard to get where you are in your career, and now you’re on the brink of an exciting new opportunity. Whether you’re up for your dream job after years in your field or starting with your first job out of school, you’re in a position to earn more money than you have before. You’re ready to hit the ground running toward your new career peak. There’s just the matter of negotiating your salary.
As a finance expert, Suze Orman knows that the money you agree to today can impact how well you live tomorrow — and she wants you to be smart about negotiating your salary. This means avoiding a very common pitfall, one that seems reasonable at first but can lead you down a path of undervaluing your worth and mistrusting your future employer.
Perks Are Nice, but They Aren’t Money
Orman warns that sometimes, a hiring manager will tell you there’s simply no room in the budget for the salary you’re requesting, but they’re willing to offer a few days of remote work or extra vacation time instead.
They may think they’re sweetening the pot, but this approach leaves a sour taste in Orman’s mouth. She urges you to carefully consider whether this trade-off ultimately aligns with your financial goals. After all, extra vacation time is nice, but it won’t help you max out your 401(k) contributions or build up your emergency fund.
Before negotiating, research salary benchmarks for your role. Visiting sites like Glassdoor or Payscale will give you a clear sense of what the company pays for similar positions or the typical market value for your job title.
Orman recommends starting your counteroffer with neutral phrasing like, “Based on my research of typical salaries for this job, I’m hoping to start at a salary of at least $X.” Treat it as a starting point for what will hopefully be a bigger conversation.
It’s About Respect
If the employer continues to insist that they can’t offer the salary you’re requesting — or even market value — but they’re willing to give you extra time off, then you’ve got some thinking to do.
Orman encourages you to ask yourself if the salary the company is offering falls within the range of what others in the same role are earning. She also suggests evaluating whether you truly want to work for a company that undervalues you right out of the gate. You should feel good about where you work, and if you sense they’re all too happy to shortchange you, maybe that’s not the place for you.
“You have to respect your employer, and that’s hard if you know from Day 1 you are being underpaid,” she said. “You don’t need to accept this offer.”
Keep Negotiating
So, what do you say if your prospective employer comes back with a lowball offer — especially when a few extra sick days won’t exactly help you pay off your student loans? Orman says to stick to your guns. One of her most popular tips is to pretend you’re negotiating on behalf of a friend, since it removes some of the pressure and discomfort. After all, people often advocate more strongly for others than for themselves.
Regardless of what you choose to do, Orman encourages you to take ownership of the process and know you don’t have to accept anything on someone else’s terms.
“Ultimately, it’s up to you what you decide to accept or reject. Just promise yourself that you won’t immediately accept the first salary offer,” she said. “The hiring manager will be thrilled if you do, but only because you made their job easy. They expect you to negotiate and have baked that into their initial offer.”
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