How Much $$$ Should I Ask For?

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How Much $$$ Should I Ask For?

[adapted from “Establish a Salary Range” by Paul W. Barada]

By now, you have most likely seen job postings asking for a cover letter that states your salary requirements. In those situations, how much do you ask for? If you ask for too little, then you may not have enough income to maintain your desired standard of living.

If you ask for too much, however, then you may price yourself out of the market and run the risk of not even getting as far as an interview.

First, you need to develop a budget, if you haven’t done so already. Go through your checkbook and tally up how much money you spent over the past year on fixed expenses (e.g., mortgage or rent, car payment, insurance). Then average how much money you spent on varied expenses, such as utilities, telephone, and groceries. Finally, include all of those discretionary purchases, such as concert tickets, dining out, and gifts. Total these figures and you’ll see what you need to bring home in order to maintain your financial status quo. While this calculation may not match the salary that you want, at least you will know how low you can go without having to make any budget cuts.

You may also want to figure out where you can trim the fat from your expenditures. This extra step becomes even more important if you have been out of work for an extended period of time. While you can’t do much to change your fixed expenses, you can scrutinize every discretionary purchase. For example, do you really need to eat dinner out when you just spent $100 on groceries?

Now that you know how low you can go, how do you determine how high to aim? It is easy to get stuck in that “They’re not offering me what I’m worth” mentality. Consider not how much you think you are worth, but rather how much the employer thinks that particular job is worth. A safe bet is to take the amount that you calculated and add $10,000. This amount represents the high end of your salary requirements. Some people believe that $20,000 is a more realistic cap, but that strongly depends on your willingness—and ability—to negotiate with the employer.

This information will help prevent you from looking at job opportunities that won’t help you pay the rent. It can also guide you when you have to submit your salary requirements for a position that you seek.


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