Not Negotiating Your Salary Could Cost You $210,017

negotiating salary

As college students begin receiving job offers for graduation in Spring, many of them have no experience in negotiating salary. I want to stress the importance of negotiating salary and its impacts on your financial future. And especially with the economy the way it is today, getting an interview is a blessing for many.

Although this may be the case, many job seekers, tired and worn out from their endless job hunt, when given that offer letter, immediately accept it at face value without negotiating their salary. This is the biggest mistake I see college grads make.

Companies Will Never Ask You If You Want More Money. You Need To Take The Initiative

Your boss will never walk up to you and ask “Hey Bob? You want more money?”. No. Never. If you want a raise, or higher salary, you will have to ask for it. They will not fire you just because you asked for more money as long as you can justify it reasonably.

From an employer’s perspective, there is always an allocated budget amount for new hires and for annual raises. Their annual and quarterly budget reviews will indicate whether or not the project contract will have enough money to bring in an FTE (full-time employee). Generally there is no specific dollar value they can offer but rather a range of dollar values that they plan to negotiate with the candidate for salary. Given this range, employers will usually aim for the lower quarter to median value of the allocated budget to account for buffer room. With this, there will always be wiggle room for negotiating salary when you take on a new job offer.

A Company Will Never Revoke Their Job Offer Just Because You Asked For More Money

If anything, it’s generally the employee who decides not to take the job offer because a salary is too low. Rarely is it the case where a company will say “Oh you want more money? Sorry, you’re a greedy bastard and we don’t want you anymore.”


Out of a survey at, no employers responded to ever declining an employee or firing an employee because the employee attempted to negotiate more money.

Your first salary will also be the benchmark for all future salary expectations.

Once you get that first salary, all future job offers will be based off your first salary as a reference point. If you’re not negotiating salary, your reference point will be lower into the future. Over time, these small opportunity costs will add up.

Below is a chart of John versus Jane over the course of their 40-year employment period. John took an offer letter at face value for an annual salary of $50,000 because he was tired of searching for a job and worn out from going interview to interview and was afraid of risking losing his offer letter. He also gets a standard 3% raise every year which doesn’t even account for inflation.

Jane, on the other hand, negotiated her salary and was able to get just $3,000 more dollars more. It may not seem much for the firm, but it adds up huge for her. In additional, she negotiates a 5% raise every year instead of the standard 3%.

Assuming both employees don’t switch jobs or get any promotions, see the difference after 40 years.

Negotiating Salary vs Not Negotiating: The Differences

negotiating your salary differences

From this data, Jane will have made $210,017.51 more than John over their 40 year career period.

Fight for your salary. Negotiating salary with your boss, especially if you’re on friendly terms with them, wouldn’t hurt. Even if it requires taking on a little extra responsibility, because let’s face it, there are a lot of overlaps in job roles in the workforce.

Know what you’re worth and project it to the employer. Negotiating salary can change many financial situations and in most cases, lives.

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5 thoughts on “Not Negotiating Your Salary Could Cost You $210,017”

  1. oh !! this topic trust me is so important .. even knowing i can never negotiate to ask for what i deserve as i feel so shy to ask upfront for the same.. and i feel i should take your advice on this 🙂


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