Negotiation Tactics That Can Boost Your Financial Security

Negotiation Tactics That Can Boost Your Financial Security

Do you lack negotiation skills and assertiveness? If so then car dealerships, employers and loan sharks want to work with you! You are leaving money on the table and lining their pockets by not sharpening your negotiating skills.

Negotiating can be intimidating and challenging in any situation. Being good at negotiation is all about knowing what you want, knowing what is fair, and having the option to walk way.  It has nothing to do with being loud, dishonest, or unfriendly -  in fact these are sure signs a person is not worth negotiating with.

Still negotiation isn’t always friendly. In the words of a wise old lawyer:

"There’s nothing nice about money."

If you want to save more money and increase your net worth try using the following negotiation tactics to boost your financial well-being.

Ask for a raise, but do your homework first:

Increasing your take home pay is one of the quickest ways to boost your financial security.

According to a recent Jobvite study, only 29% of employees negotiated their salary at their most recent employer. By forgoing negotiating employees are robing themselves of high earnings and additional benefits.

Many employees may feel intimidated about asking for a raise. But if you take time to prepare, you may increase your chances of being paid your worth. Remember, the more money you make, the more you can contribute to a secure financial future.

When asking for a raise it’s easy to tell your boss that you want more money. To increase your odds of success make sure you show them how you have increased company profits or efficiency and you will capture your boss’s attention.

Before you walk into your boss’s office, do your research. Identify what other people are making in your same position. Then identify the value you’ve added to your company over the last few months or past year. Make sure to pinpoint examples of your value, such as the 2% increased profit you've generated with your new email marketing campaign.

Be prepared to show number and figures. The more data you can provide, the easier it will be for your boss to determine how much they value your work. After all, you’re worth it!

Finally, be wary of the trap of a “promotion” that involves long hours - salary is not always better than hourly when looking at the big picture.

Build relationships:

This may seem counterintuitive but building relationships can make the negotiation process easier for everyone involved. When you feel like you’re negotiating with a friend, or someone you’re close to, it may be easier to come to common ground. Understanding what the other party values is essential to making it a “win-win” situation.

This tactic is also useful when negotiating for pretty much anything. If you’re respectful and genuinely care about the other party, they may be more inclined to give you a better deal. Think back to a time when someone was nice to you, did you want to help them and give them the best service you could? Negotiating is the same way.

Bring in the competition:

When it comes to major purchases like a car or negotiating a new job, ALWAYS let them know you have other options.

With a new car you might say: the dealership across town quoted me 7% off MSRP, are you able to beat that?

At the end of an interview you might say: Just to let you know I have interviewed at a few places already and have interviews lined up tomorrow and early next week. That will goose them into making you a good offer!

Speak the other person’s language:

A common negotiation mistake is not taking the other party’s communication style into account. Many negotiators will only communicate in one way. This limits their ability to connect with the other party involved in the agreement. Whether you’re negotiating a raise or the price of a new car, you have to be willing to speak the other person’s language. Even if you are meeting the person for the first time you can pick up communication keys.

You want to observe their tone, body language, and vocal elements. This will give you a complete picture of how to mimic their communication style. Speaking in their terms with similar gestures will make them feel more comfortable and more likely to persuade them to agree with your point of view.

You should also be careful of the pronouns you use when making suggestions. For example, if you’re negotiating a raise say , “We have accomplished a lot this year”. Instead of saying, “I have accomplished a lot this year”.

People love being the decision makers. Including them in the process may help you achieve the financial boost you desire.

Stand up to the tough guys:

Again "there is nothing nice about money."  Some people choose to play hard ball and intimate the other party involved in the negotiation. They may try to use manipulation or aggression to force you to panic and comply. Recognize this, hit the pause button, and weight the extra emotional effort needed on your part into the final price. If they treat you that way during the negotiation just think how they will treat you later on.

Don’t fall for offers that “expire tomorrow” unless there is really a good reason for such a timeline. That is a pressure tactic and it tells you a lot about who you are dealing with.

It may be tempting to just go with it and pretend it’s not happening. This is the worst thing you can do. Trust your gut feeling.

If you still want to work with them, try to address the situation head on to help disarm your counterpart. If they understand you’re aware of what’s going on, they may drop their defenses and be willing to rationally negotiate so all parties come out on top.

For example, if the other party is raising their voice ask them if you should raise yours to match their tone. You may surprise them with your curtness, but it will help level the playing field.

Try not to let this type of negotiator prevent you from making rational financial decisions. Remember, you are always in control of your own financial choices. Worst case scenario, you can walk away and find someone who is willing to communicate logically.

Get it in writing:

Written records make all the difference should things go south later on.

If an employer is offering you a job, get a signed letter that outlines the terms before formally accepting the position.

If a car dealer is offering you a car at a certain price, clarify that it is your FINAL price (including fees, add-ons, finance charges, etc) and get it in writing before heading down to the lot.

When it comes to contracts, make sure to get a countersigned copy (where both parties have signed) so you can refer back to it later if needed.

The bottom line:

Many people think they can’t negotiate, that prices are set, and there is no way around it. This is not the case. Almost anything is negotiable. It’s time for you to start flexing your negotiation muscle and increase your bargaining confidence.

Using these negotiation tactics will boost your financial well-being and set you up for a more secure financial future.

Further reading:

  • Getting To Yes - an essential book on learning to negotiate.
  • Influence - a great book on psychology and decision making.

The post Negotiation Tactics That Can Boost Your Financial Security is part of a series on personal finances and financial literacy published at Wealth Meta. This entry was posted in Financial Literacy
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