Women, credit and debt management: Negotiate a higher salary

If you're a woman, you're more likely to lose money over the course of your working lifetime than your male business counterparts. That's a scary thought, but it's also very real. The money you don't make is money you never get – to manage your debts, to leave the kids with a sitter so you can seek credit counseling, or even to avoid bankruptcy. You are probably all-too-familiar with the statement “A woman earns 75 cents to every man's dollar,” but you might not know how true this is, or why it is true. And strategic salary negotiation during your first job – and at the start of every job you take after that – will have long-term positive effects on your future debt management, your credit score health, and your finances into retirement and beyond.

The Boston Globe recently featured an editorial by Evelyn Murphy and E.J. Graff that examined in depth why women are losing money. The article stated that full-time female workers stand to lose anywhere from $700,000 to two million dollars over a lifetime. One paragraph was all-too telling: “Women (...) must consider what the wage gap means (...) the missing retirement fund, the nonexistent care, the precarious mortgage, the food budget that doesn't quite deliver ...” This missing money can ruin women's finances. Some might have to embark upon strict debt management plans. They might need to put everything on credit cards, destroying their credit scores in the process. They might have to enroll in credit counseling or debt management sessions. They might have to foreclose the family home or declare bankruptcy.

Advantage CCS female Web readers should take control of their financial futures. It's never too late to begin negotiating your way to sounder debt management and a higher lifetime net worth.

Negotiate your salary for better debt management

“The Wage Gap,” the title of that Boston Globe editorial, states that discrimination against women in the work place is still rampant, and is all-too-often reflected in salaries. It is true that many women forgo the late nights, long days, and weekend business trips necessary for lucrative promotions in order to devote time to family. Some professions such as investment banking or journalism require hours and schedules that make having a family difficult. However, these facts don't tell the whole story. Women need to take control of how much they earn each year – because every extra dollar a woman makes is a dollar put to good debt management use or wise credit score salvation.

Linda Babcock and Sara Laschever are co-authors of a book called Women Don't Ask: Negotiation and the Gender Divide. Their Web site, www.womendontask.com features some statistics that make women's need to negotiate all the more compelling. Well over three-quarters of women now work outside the home; about one-third of mothers are raising their kids solo, and about half of all marriages end in divorce. The pressure is on for working women to be breadwinners. But it's obviously difficult to practice good debt management, avoid bankruptcy, and keep credit scores strong on salaries that are too low to live on.

Babcock and Laschever say that 20 percent of women don't negotiate their salaries at all – and, among those who do, women ask for 30 percent less money than men. This is a defeatist way to go about earning a living – and can derail a debt management plan – but fortunately, a reluctance to negotiate for fear of offending or being rejected can be overcome. Here are a few tips:

• Don't commit to one number. When asked how much you are looking to make, give a range. The lowest number of that range should be the median salary for your line of work, with cost of living factored in. Add 5-15K to that number to get the higher end of the range. And know your industry. Research how much you deserve to be making, given your experience and education levels.
• Forbes magazine recommends dodging the “How much do you make now?” question. The reasoning behind this mindset is that a low number will be accepted – and your new salary will be low-balled because of it – but a high number might disqualify you from being considered for the job.
• Never settle on the first number, especially if it is too low for you. Don't talk, either. Just wait. Pause, and consider the number. This will make the employer uncomfortable – and chances are good you'll walk away with a higher salary.
• Never be afraid to negotiate. “Hmm, that sounds a bit low, how about this,” seldom costs a woman opportunities – but it can allow a woman to gain respect.

Salary negotiations are scary for many women. Fortunately, you can learn how to ask for what you should be making. Think of confident negotiating as a strong asset in a lifetime of strategic debt management, and as a well-paved road to a good credit score.