It’s hard to deny that one of the main reasons for getting a job is to get the paycheck that comes with it. However, it’s not unusual for job-seekers to leave the salary details to the end of their search, usually finding out what they could be potentially earning only when a job offer is made.
Besides working on your cover letter and customizing your résumé, there’s another step you should include in your job search — researching your own budget needs and what salary range will meet those needs. If you’re not sure how to get started, here are some steps to figure out the math you need to do in your job search.
Figure out your budget
Taking inventory of your own or your household’s bills and expenses will give you a good idea of how much money is going out of your budget every month, an important first step in figuring out how much money you want coming in.
First, list out bills that regularly occur, like your monthly utilities, membership fees or subscriptions. Also rank how important each of these bills are. Some, like credit cards and utilities, need to be a priority, while others, like cable or gym memberships, may be more easily cut.
- Utilities (water, sewer, gas, electric)
- Mortgage or rent, and homeowners or renters insurance
- Transportation costs (public transportation or car costs, like gas, insurance, car payments, parking)
- Groceries and food
- Credit card bills
- Cable, phone, internet
- Education costs for family or self, including student loans
- Clothes and dry cleaning
- Gym memberships, sports fees or exercise costs
- Magazine, newspaper and website subscriptions
Also take into account any medical bills you might regularly pay. Do you already have insurance? Or are you looking for a job that offers insurance coverage? Make a note of what benefits you’re looking for in a job, and also rank by priority.
You may also have financial goals, like putting away money for retirement, saving for a college fund or buying a new house. These larger goals are easier to tackle with the help of someone with professional financial experience. You can meet with a financial planner at your bank or ask a friend to refer somebody for help planning out these larger goals.
Also note that if you’re looking at jobs that would require you to relocate, there will be additional one-time costs, like finding a new home, traveling there and possibly hiring movers. There are also tips for the best ways to negotiate a salary for an out-of-state job.
Research jobs by salary range
Once you’ve figured out how much money you’re roughly spending every month, you can figure out what your goal salary range is. Start by researching the median pay of roles you’re interested in applying for. The Bureau of Labor Statistics offers pay information on a large number of roles in their Occupational Outlook Handbook. This will help you determine if the jobs you’re looking at will meet your budget needs, or if you’re better off searching for a different role or function.
After you’ve found a role that could meet your budget needs, research how that median pay will be affected by outside factors, like the level of experience you have related to that job, the size and success of the company, the industry the job is in and how that industry is performing in the job market. Understanding all of these factors will give you a good idea of how your own salary offer will be determined.
Negotiate the salary offer
After all your hard work in your job search and research, you’ve aced the interview and have been offered a job, as well as a salary. Don’t skip the salary negotiations, though. This is the last step in ensuring that your budget needs are met, as well as how figuring out how much extra you’ll be taking home.
Remember that the salary figure you’re offered won’t really be reflected by the number you see on your paycheck. Take into account that your take-home pay will actually be less, due to taxes and other deductions like contributions to your 401(k) or flexible spending account for health-related purchases and bills.
Taking that into account, have three figures in your head when you enter salary negotiations. The first number will be 15 percent higher than your budget needs, the next will be 10 percent, then five percent. This is a good way to put a number on what an ideal salary win would be, but also to determine where to draw the line in negotiations.
After agreements have been made and contracts have been signed, you can celebrate your new job and have the confidence of knowing you’ve made a smart financial decision.