The Update

The Basics of Financial Negotiation

Negotiation is a powerful life skill that can help lower your bills, increase your salary, reduce your debt and save thousands over time. Yet many people shy away from negotiating when it comes to money. The good news is that anyone can learn to negotiate like a pro. Here’s what you need to know about negotiating financially.

What is Financial Negotiation?

Financial negotiation is the process of discussing and reaching an agreement about money. It may be for any of (but not limited to) these reasons:

• Asking for a higher salary or raise
• Lowering your credit card interest rate
• Reducing medical or utility bills
• Negotiating rent
• Settling debt
• Adjusting the price of a service or product

Why Negotiation Matters

Here’s why it pays to negotiate:

• Instantly save money. Negotiating for a lower price can help you save on your bills every month.
• You gain confidence. Negotiating builds assertiveness and self-advocacy, which can come in handy in many situations.
• You increase your lifetime earnings. When you negotiate salaries or freelance rates, you can increase your lifetime earnings.
• You set better financial terms for yourself. Less interest, lower payments, better deals — it all adds up to increased financial health.

Before You Negotiate

Here’s what to do before you jump into a financial conversation:

• Know your numbers. How much are you paying now? What do competitors charge? What can you realistically afford?
• Know your leverage. Are you a loyal customer? Are you bringing in business? Do you have other offers?
• Know your goal. Be specific: Do you want a 10% discount? A $2,000 raise? A lower APR?
• Practice. Rehearse what you’ll say, either out loud or with a friend.

A Step-by-Step Guide to Negotiating Financially

Here’s a framework you can use for almost any financial negotiation:

• Be polite but assertive. Start with a friendly tone. You’re not demanding — you’re just having a conversation.
• Present your case. Explain why you’re asking for a better rate or higher salary, using facts and logic.
• Pause and listen. Don’t fill the silence. Let the other person process what you’ve said and respond.
• Be ready to compromise. You may not walk away with exactly what you ask for, but they might offer something close.
• Get it in writing. If you reach an agreement, make sure it’s documented. Hold on to that email, contract or revised bill for future reference.

Tips for Successful Negotiating

Follow these tips to negotiate successfully:

• Be confident, not apologetic.
• Stay calm and respectful — even if you hear “no”
• Don’t accept the first offer unless it’s fabulous
• Be prepared to walk away. Sometimes the best leverage is your willingness to go elsewhere.

Remember: You’ll never get what you don’t ask for.

RGCU Personal Loans

If you are interested in a personal loan through Rio Grande Credit Union, contact us today. We value our members, and strive to help make their dreams come true.