One of the shittiest questions to be asked in a job interview is arguably also one of the most important considerations when looking for a new job: “What are your salary requirements?”
It’s shitty because even if you’re prepared, the question can immediately throw you into a state of self-doubt and nervous confusion where you risk shooting your potential earnings in the foot. You don’t want to blurt out a number too high and risk them writing you off as an entitled, money-grubbing Millennial with an overinflated sense of self-worth. But you don’t want to lowball them either, lest they see you as a bargain hire and take you on for a fraction of what they’d planned to pay.
Story time. When I was 23 and only about six months into my very first big kid job, I got a promotion. It was great! I got to take the word “assistant” out of my email signature, I got to stop identifying as an entry-level employee, and best of all, I got a 22% raise.
I know, right? All was right with the world.
Fast-forward three years and my company had just merged with another company and in the resulting restructuring of the org chart I got another promotion. A big one.
“Oh god, oh god, the hiring manager just asked me about my salary range” is a text I’ve gotten a dozen times from friends and coworkers over the years. For a young professional, it’s usually the most fraught moment in the entire hiring process. And for good reason! Your answer to this question has enormous financial consequences. The right answer can catapult you forward—and the wrong one can set you back years.
How do you know that the number you’re asking for is the right number? Here are some tips that will help you make sure you’re not selling yourself short.
I don’t attach the word “millennial” to topics willy-nilly. A lot of our advice is aimed at everyone living in these strange times! But this advice is tailored specifically to those who came to adulthood immediately before or after the 2008 recession.
Graduating in a recession leads to earnings losses of about 9% compared to those who graduate in balmier financial climates. The pay gap takes a full decade to become statistically insignificant. For the average worker, that amounts to five grand in a single year. The lost opportunities to invest some of that income—as well as the recession-graduate’s stymied options for other jobs—creates a staggering wealth gap.
If I had to rank all the things I love to do in my precious free time, where would opening a retirement account fall? Let me see, hmm… Above a root canal, but below politely accepting a religious tract from a door-knocking missionary. What can I say? Some of them have pretty nice artwork!
Have you been procrastinating on opening your retirement account? Feeling lazy? Avoidant? Afraid of the paperwork? Feel like you’d rather use that money on stuff right now? Obviously I feel you.
But buck up, son! I’m about to tell you why you can’t afford not to open a retirement account.
To recap: Americans have access to two main kinds of retirement accounts.
First, a 401(k)—or 403(b), if you work for a nonprofit—is a retirement fund facilitated by your employer. You set it up so they can take money directly out of your paycheck and squirrel it safely away for you to use when you’re terrorizing orderlies in the nursing home. That way you can focus on maintaining your record as Wheelchair Drag Race Champion of Shady Hills Retirement Community and not get distracted by petty financial concerns.
Second, there’s IRAs (individual retirement accounts). IRAs are very similar to 401(k)s, but they’re attached to you directly instead of your employer. There are other differences, but meh, they’re pretty minor. You can get acquainted with the finer points later.
Retirement accounts are powerful tools for growing wealth and stability for your future self. The trick is you have to opt into your retirement account. If you’re self-employed, or you work for a company that doesn’t offer 401(k)s, you need to go out and open your own IRA. And if you work for a company that offers 401(k)s, you need to sign up and voluntarily tell someone to NOT give you part of your paycheck every month.
As broke as you are right now, ignoring a perfectly good retirement fund is a terrible idea. Because if you do that, you’ll lose money in three different ways.