Today in my networking challenge I am interviewing Kimberly Palmer. Kimberly is the author of Generation Earn: The Young Professional’s Guide to Spending, Investing, and Giving Back and a personal finance columnist at US News & World Report. I just finished her book and really enjoyed asking her all of my questions! Kim thank you so much for sharing your advice with us! You can find more information about Kimberly on her website Generation Earn and on Twitter @alphaconsumer.
In case you are reading this at work and can’t watch the video, you can read all of the great advice below instead!
1) I learned in your book that men are 4 times more likely to negotiate their first salary than women and asking for more money early in one’s career can mean the difference of a half a million dollars over the course of one’s lifetime. What tips do you have for young professional women who are about to negotiate their salary at their first job?
The first thing is to know that in almost all cases that you absolutely should negotiate your salary because. The biggest mistake you can make is to not negotiate your salary especially in this environment because you are so grateful to have a job offer that you don’t even bother asking. Just a small question like “is there any wiggle room with that” or ”can you go any higher?” That alone can put thousands of dollars in your pocket. The next biggest thing is practicing. In the book, I talk about how I practice with my dad. Since so many of us feel uncomfortable with negotiating, it is great just to practice saying the words. You can have one of your parents or your friend act out the script with you. They can act like your future employer and you act like yourself since everyone is different how they want to phrase things. Figure out what words you want to say and what makes you feel comfortable asking for a higher salary.
Another tip is to let there be silence especially when you are nervous, it can be easier to keep talking. After you ask, stop talking. This can really help shift the pressure off of you and onto them because if you just keep talking they don’t have to say anything.
It’s amazing how much the dollars add up. Once you have that first job offer so many of your future salaries are based off that salary, whether you get small raises or if you switch jobs you often base your new salary off your current one so it really adds up over time.
2) In the book, you recommend earning an income outside of your full time job as a self protection device in our current economy. How can we figure out what it is we should do on the side?
This is my favorite topic right now because it has become increasingly important. I think all of us feel like to some degree we could lose our jobs at any time. So to have that backup, that small side income that you could ramp up if you had to just gives piece of mind. So in terms of figuring out what that could be you really have to think about what you love doing so much that you would do even if you were exhausted. Second, think about what is marketable? You just have to figure out what the intersection is of those two things.A lot of people use websites like http://etsy.com which is a craft marketplace, you can make handmade things and sell them. Other people are more service oriented and offer coaching in whatever it is that they have expertise. You really just have to think about what you are good at and what you could sell in the marketplace
If you are doing it on top of another job, you are probably going to be tired when you are doing it. And you are going to have to figure out a way to get that energy when you are spread so thin. SO it has to be something that is energizing.
3) How can young professionals struggling just to make it at their first job out of college begin to start paying back their student loans and other debts?
The biggest first step is just getting organized. SO many people when they first graduate or even years after, just don’t even know exactly what debt they have. So if you can just sit down and make your priority list of where your highest interest rate debt is, who owns it and who you have to contact about it. I also recommend making a second list of your savings goals because a lot of people it helps to look at those two goals together because once you start earning a decent salary and you can have some wiggle room to decide if you are going to put this money into savings or use it to pay off credit card debt. Usually what makes sense for people is if you have any credit card debt whatsoever to pay that off first because it is so expensive and then rank your student loan debts sometimes people have variable rate debt that can suddenly shoot up in the coming years, you probably want to get rid of that first. If you have debt at like 6% that is pretty high relative to the current savings rates so you probably want to prioritize that off. Come up with a plan for yourself. I am a big organizer and I write everything down so I have it right in front of me to visualize it and see where your debt is and come up with your plan for how long it will take to pay off and how much you want to pay off on which accounts each month.
4) Do you have any online financial tools you recommend?
I use excel but I love mint.com, especially for people that who are more visual because it can help in terms of they put your money and your goals into pie charts and you can see how exactly you are paying things off and where your money is going. So I think that can help for people who are more right brain oriented to visualize instead of just looking at an excel spreadsheet.
5) What would you say to the person who says I will pay that off in a couple of years when I am making more money?
As soon as you make more money, you have more needs and more places that that money needs to go. As we get older we get more and more responsibilies and suddently you have a mortgage, children and other responsibilities. That is why even if you feel that you are hardly making any money, you might actually have more flexibility than you will have after ten years. Of course when you just start and you r budget is so tight, it is totally fine to put your student loans on the back burner and make your monthly payment while you are just figuring out your budget but as soon as you get passed that initial crunch phase, then it is time to really come up with that plan.
6) I love how you devote a whole chapter on giving back and volunteering. How can we be givers and become deliberate about giving back part of our incomes?
I think one thing that is really hard is that we are constantly getting requests in this area. Whether you have a friend that is running a race and you want to support them or we get things in the mail, and we feel that we don’t even have control and we aren’t empowered in our giving because it is spread out in so many areas. The first thing is to really decide that you are going to be focused in your giving and really figure out what it is that you connect with and whether it is something that inspired you from a movie or a book that you read and then to learn as much as you can about that area. And you still want to support your firend when they are running a race but overall you can really concentrate your giving, even if it is just $200 per year, you can really decide that you are going to support this non-profit and give to them every year. If you take time to learn more about it And you can really become a empowered giver that way.
7) What is one thing you wish you would have known as a young professional woman just starting out in her career?
I wish that I had always done what I wanted to do instead of what I felt like I should do. It’s so easy to get caught up in what you should do whether it is going to law school or some grad school program that you feel like you should do or taking a job you feel like you should do because it is the more serious or professional choice and your parents would like it. It’s so easy to just go along that path with what you should do. For most people they are lucky and at some point they realize they have gone wrong and corrected it but you can save yourself so much time and trouble if you just start with what you want to do.
