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Negotiation is the art of asking for things you want and persuading other people to agree to a solution. Developing your negotiating skills can be a big help on your financial journey. If you don't negotiate, you're leaving money on the table. Negotiation is a path to financial wellness that empowers you to earn more money, propel your career forward, and to get great deals when you make purchases. Learning the basics of negotiation can give you an advantage when you tackle any financial challenge.

Maybe you've contributed a lot on the job and it's now time to ask for a raise. Or, maybe you're comparing job offers and you'd like to talk to a potential employer about a better benefits package. Negotiation can help you win better compensation at work. Or perhaps you're buying a new car or making an offer on a house. Negotiation can help you get the best terms possible, keep the size of your down payment manageable, or reduce the amount you need to borrow.

Here are some tips to boost your negotiating skills and make your next negotiation go smoothly.

Negotiation 101

The discussion is more likely to work in your favor if you take the time to prepare. Here are the steps to keep in mind any time you head to the negotiation table:

  • Do Your Research: Find information about comparable situations that can help you make your case. If you're planning to negotiate your salary, look up the average salary for similar jobs in your city. Find out what other people in your position typically earn. If you're looking to purchase a new car or find a new home or apartment, make sure you do your due diligence and ensure you're getting the best deal. Your requests are more credible when you can back them up with numbers.
  • Craft an "Elevator Pitch": Imagine that you and the person you're negotiating with step into an elevator together. You have about a minute until the elevator reaches your floor, and you want to take this opportunity to make your case. What are the main points you want to bring up? While you probably won't literally be in an elevator for your negotiation, using the format of a few persuasive sentences that you could say in the time it takes to ride an elevator — what's called an "elevator pitch" — can help make your request punchier and more convincing. Write down the goal that you're trying to achieve and a few reasons as to why it's a good idea. For example, if you're asking for a job, the goal would be the role you want. The reasons could be that your skills, qualifications, and previous experience make you the perfect candidate for that job. This pitch should be short enough that you could say the whole thing in under a minute. Finally, practice delivering your pitch in front of a mirror or to a friend to make sure you get the impact you're looking for.
  • Don't Expect to Get Everything You Ask For: In a good negotiation, there's always some give and take. The other person may agree to some of your requests but not all of them, or they might agree to meet in the middle. For example, if you're negotiating the price of a home, the seller might not drop the price as much as you hoped. But, the seller might agree to make some repairs to the property or to help you out with closing costs. Look at all of the terms and conditions of a purchase to find areas where you can negotiate a better deal. Even if the seller doesn't budge on the price, you may be able to negotiate a lower down payment or some extra perks.
  • Find the Sweet Spot: Look for the win-win outcome where everyone can walk away feeling like they've managed to get what they want. If you're negotiating compensation at work, look for the mix of pay and benefits that works for both you and your employer. Suppose you're asking to work from home part-time. If you negotiate an option to work from home two days a week, that could give you the flexibility you want, while it's great for your employer because it allows you to be more productive in the time you ordinarily spend commuting.
  • Stay Positive: Talk in a calm, friendly voice and really listen to the person you're negotiating with. This makes people feel respected, so they'll be happier about working out a solution together.

As you master the art of negotiation, you'll reap the rewards. Those can come in the form of a new job or better earnings. You can use your higher paycheck to boost your retirement savings or save up for a new house. And when you negotiate on a purchase like a new car or home, you may not have to borrow as much, which helps you protect your credit.

Put It Into Practice!

Follow these steps to make your next negotiation work for you:

Pick something you'd like to negotiate, whether that's your benefits at work or a promotion. Gather the information you need to be an informed negotiator and write down your pitch. Imagine that you've made your request. How do you think the other person will respond? Brainstorm some possible outcomes and think of what you'll say in each scenario.

Ask a friend to listen to your pitch and give you feedback. Have your friend role-play as the person you would like to negotiate with, and practice some potential responses to your pitch. Then go out and negotiate for what you want.

Disclosures

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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