Learn how to get the compensation you deserve.

When evaluating job offers, it’s not just about the salary. Benefits are like those little extras that can make a big difference to your financial well-being.

So, you’ve finally settled on a career path that excites you and aligns with your passions. Congratulations! But now comes the somewhat awkward part: thinking about salary and benefits. We all know the dreaded interview question that often makes us stumble: “What are your salary expectations?” Don’t worry. We’re here to help you navigate this process and provide some handy tips that you can use to approach the topic with confidence.

Steps for Determining Your Desired Salary

Although some factors are beyond your control, like average pay for the job or salary schedules based on education and experience, it doesn’t mean your salary is set in stone. In fact, understanding your worth and measuring your budget needs can help you influence and negotiate the compensation that suits you best.

1. Find Your Worth
   Before you put a number on the table, find out what’s fair and reasonable for the role you’re pursuing. Benchmarking is a process of checking the standard or average salary for a specific job position. Doing your research on factors like role requirements and then matching those to your education level, industry experience, and skills will give you a better understanding of what’s fair and help you identify ways to communicate your value as a candidate.
2. Consider Your Cost of Living
   The cost of living can vary greatly based on where you choose to live. Big cities like Los Angeles or New York City tend to be more expensive than suburban or rural areas. Take the time to research the cost of housing, taxes, transportation, and other essential expenses in your area. Then, compare this data with your benchmarking results to ensure that your desired salary meets your lifestyle needs without stretching your money too thin.
3. Budget Like a Pro
   Review your budget, including your needs, wants, savings, and debts. Understanding your living expenses will help you determine how much salary you’ll need to meet your financial obligations and achieve your desired lifestyle. Try the 60-20-20 rule for budgeting your money. Allocate up to 60% of your paycheck to housing, transportation, groceries, healthcare, and other living expenses. At least 20% of your income should go into savings. The remaining 20% is your fun money. Spend it on restaurants, travel, entertainment, and gifts.

Remember to Consider Benefits

When evaluating job offers, remember that it’s not just about the salary. Benefits are those little extras that can make a big difference to your financial well-being. Let’s explore some of the most common ones:

• Retirement savings. Employer-offered retirement plans like a pension or a 401(k) can contribute to your future financial security. If your employer doesn’t sponsor a 401(k) or similar plan, the government allows you to save for retirement in individual retirement accounts (IRAs) (either traditional or Roth).
• Health insurance. Health is wealth! Health insurance protects you from the high cost of healthcare. If your employer offers healthcare benefits, understand not only how much they will cost you, but also what they actually cover. The employer contribution toward healthcare benefits can add up to a sizable amount, so factor in their value when considering a salary offer.
• Dental insurance. Dental insurance usually covers regular cleanings and check-ups, along with various treatments at negotiated fees, keeping your dental health in check.
• Vision insurance. Vision benefits often include complete vision exams, coverage for prescription glasses, contact lenses, and other vision treatments, ensuring that your eyes stay healthy and your vision stays sharp.
• Disability insurance. This insurance protects you in case of a disability that prevents you from working. While no law requires employers to offer disability coverage, many do. These benefits provide partial or full income in case of a disability that prevents the employee from being able to work. If the disability lasts for more than three to six months, long-term disability kicks in. If this is an offered benefit, understand how long you will need to wait to receive benefits and how long those benefits will last.
• Life insurance. Though it’s something we don’t like to think about, life insurance is an important safety net for you and your loved ones in case of unforeseen events. Generally, this is offered as term insurance, meaning the policy is valid for as long as the insured person is employed.

Pretax Benefits Can Help You Save More

Let’s talk about pre-tax benefits – a smart way to reduce your taxable income. Contributing to plans like a 401(k) or an IRA, if your prospective employer doesn’t offer a 401(k) plan, or a health savings account (HSA) before taxes are calculated can lower your overall tax liability. Just remember, you’ll owe taxes when you eventually use these benefits, so plan accordingly. These contributions can stretch your budget and add flexibility to your salary calculations.

Be Informed and Confident

By researching average salaries, considering the cost of living, and reflecting on your budget, you can confidently discuss your salary expectations during interviews. Remember, it’s not just about the numbers; it’s about finding the right fit for your career and financial goals. If you need help managing your finances as you start your career, reach out to your financial institution.