Can we all agree that job hunting is one of the most heinous tasks you ever have to endure? It can feel like Sisyphus rolling that damn boulder up the hill…only to have it roll all the way back down again. Repeat for what seems like forever.
So when you finally land that coveted job offer don’t you feel tempted to accept right away?
Actually feeling wanted? Yeah, that’s a basic human need.
But if you accept right away, as is, you are likely making not only a rookie mistake, but a decision that will have significant effects on your finances.
Think about it: the three levers of personal finance you control are what you spend, what you save, and what you earn. We’ve already talked about spending and saving, but what’s the tool for both of these? Your income. If you snap up the first offer and don’t first stop and consider whether you are leveraging whatever you can from your new situation, then you are likely missing out.
In my first post, I told you I’d share mistakes I’ve made because I’m all about real-life examples. And funnily enough, I learn more from my mistakes than when I actually do things right. So today I’m going to walk you through three of the biggest fails I’ve made when accepting job offers. Read what I did, and then do the opposite.
1. I lost $8,000 because I didn’t negotiate my salary.
Not negotiating your salary is a mistake that most people have made, and when my first job offer came around I was no exception. But then I found out my coworker’s salary. My coworker, let’s call him Matt, made $35,000. I made $33,000. We both started out as temps, and now had the SAME EXACT JOB TITLE.
Wait–Matt, who was less valued than me (evidence: I’d eventually become his boss), was somehow making more money than me.
All because he asked. I know, because I told him to tell me exactly how he pulled it off. “Give me your exact words,” I demanded.
He told me he was offered the same salary of $33,000, but had responded with, “I’ve been temping here for 18 months now, and I really think I should be starting at more.”
That’s it. The company dangled the 33k carrot in front of both of our faces, and I was the only one who fell for it.
And now I was making $2,000 less. The salary difference alone wasn’t a devastating amount, but it’s a huge blow to know that you are a much more valuable employee, and yet, aren’t compensated to match.
After I picked up my jaw from the floor at how simple his ask was, it was time to get mad.
Not at my coworker. Not at the company. But at MYSELF. This was 100% my fault. Because you don’t get what you don’t ask for.
The sad part is, when I was offered the 33k, I DID think about negotiating. I had read a few personal finance blogs and knew negotiating was something I was supposed to. But I felt I had no leverage. I had never had a real job before, and I couldn’t come up with a legit reason for why the company should give me more. Before I accepted the job, I actually temped for months in a different department at the same company, as the office receptionist/manager. I didn’t think those skills had anything to do with the salaried job. It didn’t occur to me that the achievements and skills from that other position could be used as leverage to negotiate my salary.
Basically, I made the rookie mistake of thinking, why me?, when I should have been thinking, why NOT me?
How much did this mistake cost me? Not asking for an extra $2,000 upon the offer actually cost me at least $8,000, if I had negotiated the same as Matt. Let’s check out the math, keeping in mind that my company gave an extra 5k for every raise or promotion.
My actual salary trajectory:
Initial salary: 33k
Promotion #1: 38k
Promotion #2: 43k
Promotion #3: 48k
If I had negotiated that extra $2,000:
Initial salary: 35k
Promotion #1: 40k
Promotion #2: 45k
Promotion #3: 50k
See how that small decision actually added up? That initial salary you accept sets the tone for future raises.
What to do instead:
Everybody could stand to be more aggressive when it comes to negotiation. Two key points to remember:
If you don’t ask, you lose 100% of the time.
It’s 1,000 percent easier to negotiate your salary BEFORE you start the job.
So dig deep to mine what you can bring to the table that other candidates might not. Yep, even if you’ve never had an “official” job. For example, if you were a PR intern in the past, you might have some valuable contacts that the prospective company might be interested in. Maybe you’re an Excel whiz and can come up with some macro that could save the company hours of work. Or maybe you’re a cool millenial who knows all the latest digital tools. Also look at your other work experience and skills, and see how you can spin them to be relevant to the role you want.
Yeah, that’s great and all, but now what? How do you actually negotiate?
You don’t need more “theories” in your life. You need to PRACTICAL advice, so for negotiation advice that’s actually useful, I think this article delivers on that.
2. I hated my job because I didn’t first check the work environment.
A few years ago an old coworker e-mailed to poach me for a job at her new company. I’m an opportunist, so every lead is at least worth a look.
Before the interview, here’s what I researched:
- I read the company’s Glassdoor reviews. The reviews were glowing. Check.
- I asked my former coworker for the inside scoop on what the job was really like, warts and all. Check check.
In a span of two weeks, I interviewed, got the offer, and told my current boss I was peacing out.
On my first day at the new job, my boss walked me to my work area. And that’s when I noticed something unsettling.
IT WAS DEAD-MAN QUIET.
I like to joke around with my co-workers, and there was zero joking happening. I watched my new coworkers arrive at their desks, put their stuff down, then put their headphones on. Not one person greeted anyone nearby: “Hey, how’s it going?”
I’d interviewed in my boss’s office, which was NOT the area where I would be working. And I’d never met any of my coworkers until that first day.
I was miserable for the entire year and a half I worked there. Every day I would take a walk at lunch time because the office was so depressing and I had no work friends. I spent money on lunches out, and also found excuses to “treat myself” to coffee several times a day, adding up to over a hundred dollars of unnecessary spend.
What to do instead:
Don’t underestimate the importance of cultural fit. I would say it could be even more important than your actual job. For instance, I’ve stayed at boring jobs just because I had a best friend at work to talk to all day.
- When you interview, don’t be afraid to ask for a walk-through of exactly where you’ll be working. Is it a cubicle farm or open layout? Is it loud or quiet? Pay attention to how people are behaving. Do they all have headphones on? Are people laughing or talking about Game of Thrones? Each of those scenarios can impact how you feel about your job. Be honest with yourself. If the place is set up like a call center, can you see yourself being happy there? If you can’t really visualize yourself working there, it may be a sign that it’s not for you.
- Insist on meeting your future coworkers whenever possible. If someone you’re going to be working closely with seems like a jerk, or has a radically different working style from you, think twice about that. Don’t ignore your instincts.
Don’t worry about looking like you’re “asking for too much”. Making these requests will actually have the opposite effect. People who ask smart questions come across as more thorough and competent.
3. I thought I got a pay bump, but I actually didn’t.
A common mistake is thinking that your ‘salary’ and ‘compensation’ are the same thing. They’re not. Your ‘compensation’ is the full package, consisting of your salary, benefits, work culture, etc. Your salary is just one part of the equation.
I got a job offer, yay! Now it was time to evaluate it. The job I was leaving paid $73,000, and the new job paid $80,000 (after some negotiation). Sweet, past-Luxe thought, I’m getting a $7,000 raise.
But I didn’t do a side-by-side comparison of the full offer.
So I failed to realize that by taking the new job I was actually barely getting a raise. Check it out:
- $73,000 salary
- $4,380 401k employer match
- Excellent 401k investment options with low fees
- Five weeks of vacation
- Four Summer Fridays
- Profit sharing
Total compensation estimate: $83,000
- $80,000 salary
- $250 401k employer match
- Terrible 401k options with high fees
- 2 weeks of vacation
- 2 Summer Fridays
Total compensation estimate: $85,000
Just with the decrease in vacation time and the new, tiny 401k employer match, my “$7,000 raise” now morphed into a $2,000 raise.
What to do instead:
Always take a day or two to assess the full job offer. If a company hasn’t given you information on the benefits, go ahead and ask for it. It might not be super detailed, but you’ll be able to sketch out some basics, like, how much vacation you’ll be getting and what the 401k employer match is. Then compare the compensation package side by side and decide whether job hopping makes the most sense for you.
Recognize that your job is a powerful financial tool. Accepting a job offer is a huge decision whose consequences sometimes aren’t clear until you’re already locked in. But seemingly small mistakes, like not negotiating your initial salary, can add up to bigger financial setbacks. So when it comes to your career, spending a little more time to assess the big picture can pay off.
What about you? What’s a job mistake you’ve made that people need to avoid?