Afford Anything - The Secret Psychology of Successful Negotiators, with Matt Schultz

Episode Date: November 29, 2024

#562: More than 90 percent of people who ask to get their credit card annual fee reduced are successful. Yet most people never ask.  Why? They assume the answer will be no. Matt Schultz, the author of “Ask Questions, Save Money, Make More,” joins us to explain the psychology and tactics behind successful negotiation.  The key insight: companies want to keep your business. Banks, employers, and service providers invest in long-term relationships because it's more profitable than constantly finding new customers.  This gives you more leverage than you might think. For credit cards, Schultz points out that calling the retention department directly (rather than general customer service) often leads to better results. He shares his own experience of getting his $600 annual fee cut in half just by making a yearly call. With mortgage negotiations, Schultz suggests getting quotes from 3-5 lenders on the same day, since rates change frequently. A quarter-point rate reduction on a $360,000 mortgage saves $20,000 over the life of the loan. The fees themselves can differ by $5,000 between lenders. When it comes to workplace negotiations, Schultz recommends keeping a weekly log of your accomplishments. Note both your regular duties and times you went above and beyond. This creates a strong foundation for salary discussions. The most effective negotiations frame requests as win-win scenarios. Instead of just asking for tuition reimbursement, explain how additional education will help you contribute more to the company. Rather than demanding a lower rent, offer to sign a longer lease that reduces the landlord's vacancy risk. Schultz emphasizes building relationships during negotiations. The person at the call center has likely dealt with angry customers all day. Being pleasant and making a human connection can lead to better outcomes. The interview also covers negotiating with family members about money, choosing when to negotiate versus pay full price (like at charity shops or with small businesses), and how to time requests effectively.  The common thread: success comes from understanding the other party's interests and finding ways to align them with your own. This episode will show you how to save hundreds — or thousands — in your regular spending, simply by asking.  Timestamps: Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths. (0:00 Intro: Most people fear asking for discounts/negotiations (1:37) Keep weekly notes of work accomplishments for better negotiations (3:38) Companies want long-term customers - use this as negotiating leverage (6:04) Credit card fee negotiations - 90% success rate when asking (8:36) How to negotiate mortgage rates and compare lender quotes (13:15) Open-ended questions get better results than yes/no questions (19:41) How to handle pushy mortgage reps who bash competitors (26:41) Tips for millennials who hate phone calls but need to negotiate (31:17) Framing tuition reimbursement as benefit to company (39:19) Building rapport during negotiations vs being aggressive (44:42) When to walk away from difficult negotiations (49:20) Negotiating with small businesses vs large corporations (54:53) Red flags in workplace negotiations (58:38) How companies signal if they value employee growth (1:06:38) Final thoughts on customer lifetime value and negotiating power For more information, visit the show notes at https://affordanything.com/episode562 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Sometimes just by asking questions, we can make a lot more money or save a lot more money, but oftentimes we are afraid to ask. So today we are speaking with Matt Schultz, the author of the book, Ask Questions, Save Money, Make More, on how you can use the power of asking questions to make more money at work or to save more money in the things that you buy in your day-to-day life. Welcome to the Afford Anything podcast, the show that understands you can afford anything, but not everything, every choice carries a tradeoff. And that applies not just to your money, but your time, your focus, your energy, any limited resource. This show covers five pillars, financial psychology, increasing your income, investing, real estate, and entrepreneurship. It's double eye fire. I'm your host, Paula Pant. I trained in economic reporting at Columbia, and I help you focus on what matters.

Hello, Matt. Hi, thanks for having me. Thank you so much for being here. Let's start with the primary category where people can really make the most money by asking for more, and that is at work. Most of the people who are listening to this right now currently have a job and are not imminently about to switch jobs. Can they make more money despite the fact that they're not negotiating for a new salary? Yeah, they absolutely can. The stuff that we're talking about that you need.

to do isn't really complicated. It can take a little bit of time, but a lot of it is just about taking notes of what you do on a day-to-day basis. One of the job experts I talked to, was saying that if you, once a week, take the time to note down all the things that you've done during that period, you can kind of build up this laundry list of things that you can then present to your supervisor the next time it comes up for promotion or if you're just like, I haven't had a job review in two years. It's time I'm bringing this up. It's really simple stuff like your basic job duties.

But then it's also things that you did that you went a little bit above and beyond on or you helped out somebody who needed help or you made some sort of big sale or whatever the case might be for your job. Making those notes really make a difference because one of the things we always struggle with when we are kind of hyping ourselves in a promotion and that sort of thing is we forget what we've done. So just the simple task of making notes can allow you to better understand your own value and kind of better key yourself up to present yourself well. Let's actually take a step back. Asking for more money, whether it's in the context of work or whether it's in the context of trying to save on credit card fees, on items that you're buying at the store,

asking is one of the most powerful levers that we have. Why do so few people, do it. There are as many reasons as there are people. One of the biggest is that they just don't think that they'll succeed. Many times it's way more successful than you would expect. Asking to have a late fee waived on a credit card, for example, 90% of people who ask get that waived. It's just a policy that a lot of card issuers have. You just have to ask for it. But a lot of people don't know that they can be successful, but then a lot of other people just don't like doing it, or they get intimidated, or they don't think they have enough knowledge to really be successful. One of the things that I always try and make sure that people know is that everybody has experienced negotiating.

everybody. Everybody has had a roommate or a partner who they have had to figure out what they're going to set the thermostat at in the apartment. Yeah. People have negotiated with parents as to who's going to take what day in the carpool to soccer practice or to the recital or whatever the case might be. Those little things are negotiations. The stakes aren't super. high necessarily, but they are still negotiations in which you're trying to accomplish something and ultimately things work out better if everybody is happy. And really all of those same sort of principles apply when you're talking to your partner or significant other about where you're going to go for dinner that night with the in-laws. It's not that different from when you are negotiating with a credit card company or with an employer or with contractor or somebody at a furniture store. It's all really very similar. I want to go back to something you said earlier

when you talked about how people are so often very successful. One of the stats that you mentioned is that when people ask if their annual fee on a credit card can be reduced, six out of ten people get that fee waived entirely, and another three out of ten people get that fee reduced. So nine out of ten people either get that fee eliminated or reduced just by asking that annual fee on a credit card. Isn't that crazy? In my day job at Lending Tree, we do a bunch of these types of surveys, and we've been doing that particular one around annual fees and credit limits and that sort of stuff for five, seven years now, and I know other places have done similar things for years. And the success rates have always been about the same.

Good times, bad times, high interest rates, low interest rates, recessions, pandemics, whatever. You just have this opportunity because banks and other businesses want to keep your business because they know that if you stick around, they're going to make more money off of you. Once you internalize that idea of the importance of lifetime value and how businesses view you, it kind of changes the mindset to where you're not necessarily going in anymore,

groveling, saying, please, can I have this fee waived or whatever, you're going in a position of power because they want you to stick around. It's the same reason why your gym gives out logo water bottles and t-shirts and why credit card companies waive late fees and all that sort of thing. These companies want you to stick around and it doesn't cost them much to keep you really, really happy. And it's one thing if that annual fee is a 500, 600, 600. annual fee may not be as likely to get those waived, but it can't hurt to ask. But certainly if it's a

$80, $90 annual fee, you absolutely should ask because your chances of success are better than you realize. I have a credit card with a $600 annual fee. And I just said a reminder on my Google calendar that every summer I call them and I say, hi, can I speak to card member retention? I say that right off the bat. Yeah. Every time that I call, like clockwork, I don't get the fee waived entirely, but I do get a significant reduction, usually about half off. Okay. Typically, that's in exchange for some type of behavior that they want to see from me. Sure. So they might say, assuming that you spend a minimum of $1,500 per month, then we will reduce $100 per month for the next six months, assuming that you meet this minimum spend threshold. Yeah.

And that really is a win-win. Like they have some type of user behavior that they want to see from me. I have some type of discount that I want to see from them. Boom. We work it out. Yeah. And the better a customer you are, the more likely you are to get your way. And I said earlier that maybe if you have a higher fee, you may not be as likely to get it waived.

The caveat to that would be exactly your situation, where if you're somebody who spends a lot of money on that card and, pays it off regularly and you're a good customer, and they like having you around, $300 to American Express or Chase or whoever it is is a grain of sand on the beach. It doesn't matter to them at all, but it keeps you a happy customer. And that's what it's all about. You also mentioned the idea of kind of the win-win. That's such an important thing, too, because as much as we want to make sure that we are, getting what we need and what we want out of this conversation, it makes it a whole lot easier to get that, or at least to get some steps in that direction, if the other person on the other line is going to get something out of it, too. Right. And so that's why the phrasing matters so much. So for example, if you know that you are going to be late on a given bill, let's say that you've lost your job or some big emergency came up that consumed your entire emergency fund and then some. And you know that

momentarily you're going to be laid on some bills. Call in advance. Right? Let them know in advance. And then the phrasing is, how can we work through this so that we make sure that you get paid? Yeah. It's also about not just allowing yes and no answers to cut you off. Because one of the things that I talk about is the idea of kind of making sure that you're asking open-ended questions, because the harder you make it for the person on the other end of the phone to say no, the better it is for you. Maybe something along the lines of who on your team can I talk to about getting a lower rate on my card, something like that, as opposed to, can you give me a lower interest rate on my card? It's a small little thing, but it's a way of starting a conversation rather than just asking a yes or no question because a lot of what keeps

people from making these requests is the fear of getting that no and having to know what to say when you get that no and a lot of people like I'm not sure what to do those sort of open-ended questions could really help let's walk through some examples of open-ended questions we've been talking a lot about credit cards so far, but this applies in any domain. One of the biggest ticket purchases that people make is housing. So let's talk to an example of using open-ended questions to negotiate the interest rate on a mortgage or the fees that you pay on a mortgage. Obviously, your mortgage is such a big expense and there's so much that you can do. But when you're talking about open-ended questions and just negotiations, a lot of times,

people don't necessarily know that they can ask for these things. I mean, because there are clearly places that you can go where you can do a lot of this stuff online where you don't necessarily have to talk to anybody, and that's fine. But there are certainly things that you can do once you have gotten in touch with your lender and you're trying to walk through getting a better rate and getting fees waived and that sort of thing, where you can just, just go to them and say, you know, hey, who can I speak with about potentially seeing if you could match this other interest rate that I've gotten from this other lender? I've spoken with a few

different people. They have a little bit better rate, but I've liked working with you, and I wanted to see if y'all would be willing to match that rate for me. Is that something that I would speak with you about, or how would we go about finding a way to bring down that rate? So it's phrased as an open-ended question, and it also indicates that you want to work with one given lender. Now, your approach is to apply on the same day, apply for three or four or five mortgages, get those quotes, so that you see, and it has to be on the same day because rates change so often. but you see on the same day the quotes that you get from three, four, five different lenders. So you'll be able to make an apples to apples comparison of both the rates and the fees on that mortgage. Yeah. And that's what's really so important is that your power comes from being able to compare because we always think about price matching for other types of retail.

but we don't necessarily always think about it in other places, whether it's mortgage or medical or any kind of thing. If you get rates from three to five lenders, you can see what's what and play one off the other if this lender maybe has different fees or a little bit better situation. or maybe sometimes it's that you spoke with the person on the phone after contacting and you felt like you had a rapport with them, that stuff matters too and that stuff gets factored in as well. But so much of that is about being able to compare and contrast what the actual offers are and working from there to Frankenstein your way into the best possible offer that you can get. to take a moment to illustrate the stakes here. So a quarter point rate cut on a $360,000 mortgage is $20,000 over the life of the loan. It's a big deal. Right. And in terms of the fee structure on

a comparable mortgage, similar mortgage amounts, like lending volumes, similar terms, everything else being the same, the fees themselves can be a $5,000 differential or more. from option A to option B. Yeah, no question. It is absolutely positively worth your time to compare different lenders when it comes to mortgages and really almost any financial instrument, right? It's about comparison shopping. But then you don't have to stop at that comparison shopping.

You can take that next step. Ask for more price matching or ask for whatever else. else you may be looking for. Opening that conversation is such an important thing. And it's a little like when you're negotiating job promotion or a salary at a new job interview, people get intimidated and think that the person they're talking to is going to get offended or put off or something if you ask for something or if you negotiate. Anybody who has ever hired somebody knows that you go in fully expecting to negotiate. And that's the case with so many different places.

But we don't really apply that same principle that you yourself may have lived through as somebody who hires people. You may not necessarily see that as being functional or being an issue or being something that you can do in other facets of your life, but it absolutely is. I want to talk more about hiring in just a second, but to stay on the mortgage example and the reason I'm staying on it is because, as we just described, the stakes are so high, we're not talking about $100. We're talking about $20,000. We're talking about literally tens of thousands of dollars. Yes. Something that can have a significant impact on a person's net worth and their budget. To illustrate what that playbook would look like, that step-by-step book for a person who's listening to this,

if they're looking for a mortgage, on one given day, at one given point in time, they obtain quotes from three to five lenders for the same type of mortgage. So let's just say, for example, a 30-year fixed rate. mortgage, you want to keep it constant, right? 30-year fixed-rate mortgage. You get quotes from three to five lenders all on exactly the same day. And then you take a look and you say, all right, option one has the lowest fees, option two has the lowest rate, and option three, four, and five are somewhere in the middle. And based on that as a starting point, you then start talking to representatives. Yeah. And they can you price match? Yeah, yeah. Who would I be able to? speak with about potentially matching an offer that I've seen from another lender.

Do you have to tell them who that other lender is or what the offer is? Not necessarily. One of the things that always comes up with this stuff is, is it okay to lie and bluff and play a little poker? And sometimes it is. It's a little bit of what you're comfortable with, because there certainly can be value in a little bit of poker playing. and it can certainly work to your advantage in so many different types of negotiations.

But short answer is that you don't necessarily need to give them chapter and verse on the other things that you've seen. What would you do if they ask and you're not comfortable revealing that information? Well, if they push and there's not really much of a reason not to give the information, it's okay to do it. But that's also one of those things that you can keep in mind when you're building the rapport with the person. Because in so many negotiations, whether I mean you're talking about like people who have a handyman that they've used forever, a doctor that they go to, or a mechanic and that sort of thing. If you are kind of building this relationship and somebody is too pushy or somebody doesn't like.

like that you ask too many questions or it just kind of rubs you a little bit wrong, that can be a red flag potentially that you may want to take your business elsewhere. Because as much as a lot of these relationships are strictly about dollars and cents, other things do come into play too. Right. Because the situation I can imagine is that the representative you're talking to pushes you to find out, all right, where did you get that quote from? And so you tell that person, oh, well, this particular lender is the one that gave me a quote for this amount, where, oh, the one that quoted me the speed. And then the representative just starts bashing that particular lender. Yeah. Oh, well, of course you got that kind of quote from that lender.

Yeah, they're the worst. That lender. So, yeah, they're the worst. Yeah. Exactly. Exactly. So, but that just reflects badly on the representative. But you see it all the time. You do see it all the time because things are so competitive. And again, there is something to be said about liking who you work with, whether it's in your day job or it's somebody that you're talking to who you are giving your business. because, again, a mortgage is a really, really big thing. And you're talking about a lot of money. And if you don't like the other person or you just kind of get a icky vibe from them or whatever, take your business elsewhere or at least factor that into some of your thinking. Right.

What would you say before we move on to the workplace, what would you say to, to someone who's listening to this who's going, wait a second, I'm a millennial, I don't pick up the phone. What I would say is I understand. Sure. But I also think that there is so much value in the connection between a direct conversation with a person, whether it's face-to-face or a FaceTime or a phone call or whatever, that can be so valuable. Because as we see every day in social media, it's very, very easy to tell people know

if they're just a random person that you'll have no interaction with ever again. But if you can get that person on the phone or if you can go to the branch of the bank or whatever the case might be, or even sometimes if you can have a direct message conversation in social media, where you can at least get some sort of feel for who that person really is, that stuff matters.

People like to help people that they like. You are just somebody who is a tweet or an email, and there's never any sort of chance to get any kind of real connection, even if it's just a little bit of something where, I don't know, you mentioned a football game you saw the day before or the trip you took, little stuff like that that may or may not come up, but if they do, that sort of stuff matters. And it can separate you from the person who may have been really difficult to them or yelled at them or just whatever the case might be. those sorts of things can really measure. Right. Because there is a range of what is possible for that representative to do.

And if you have a good rapport, then they're more likely to give you that top end of that range. Oh, yeah. One of the top rules is just don't be a jerk. Whether you're talking about mortgages or work or whatever, people like to help people that they like and people who are nice to them. And the person at the mortgage company has probably had a few hard conversations that day. The person at the hotel check-in counter has probably been yelled at 10 times. Just these things matter. And if you can have an actual kind of relationship conversation with them, even just a little thing can matter. And it can be the difference between them,

like, no, I don't want to give that person a break. And, oh, sure, yeah, I can help you. Let me, let me look this up for you. I'll just take a second. Right. You know, so I bring up the example of millennials who don't answer the phone or who don't like making phone calls because what I hear anecdotally is that a lot of people feel anxiety around phone calls. Sure. Because it's so unscripted. When you send an email or compose any type of written message, you have the time to think about what you're going to say. We actually had a member of our team on Afford Anything who very much did not ever want to get on the phone, be on a Zoom call. She only wanted to communicate by email because she wanted to receive the message, digest it, take some time to think through

her response, craft her response, read over it, and then send it back. She really wanted that slow down. And so the immediacy that is incumbent in live communication, she found to be very stressful. Yeah. Understandably so. And ultimately, what it gets down to is whatever medium you're the most comfortable with, you'll probably be the most effective with. So if all things being equal, it's hard to beat having an actual conversation with an actual person. But if you would feel much more comfortable doing an email or something a little more involved and a little more scripted, that's fine. It's all about what's going to get you where you want to go. It's a little bit like when people talk about Avalanche versus Snowball Debt Payoff method, really don't matter all that much.

It's just what is going to work for you psychologically and what is going, what is going to make you keep going. Because it's not a one-size-fits-all answer. Well, let's talk about how to get the most out of your employer when it comes to not just your salary, but also the myriad of ways that you can get benefits and other forms of compensation. We'll discuss that in just a moment. But first we're going to take a moment to hear from the sponsors who make this show possible. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology built to evolve with your business. Fifth Third Bank has the big bank muscle to handle payments for businesses of any size.

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Now, people often think about their salary and their benefits when they consider compensation. When I say benefits in this context, I mean health insurance retirement. But one of the points that you've made is that your benefits, or at least your potential range of benefits, depending on the size of your company, could include mentoring. It could include tuition reimbursement. These are things that we rarely hear about when it comes to salary and benefit negotiation. Yeah. That stuff is a big deal. And so, and maybe the biggest of all of those in the past few years is hybrid versus remote versus in office.

Remote work is a benefit. And all of that stuff really, really matters. And so many times we end up kind of getting stuck on the headline number, whether it's the salary that we're negotiating or the credit card. sign-up bonus or whatever other example there might be when what you almost always need to do is look deeper down as well because ultimately the devil is in the details, right? So it's all about knowing exactly what the full range of the offer is.

All of those things, tuition reimbursement, mentoring, remote versus, in office, all of those things matter. And what's really important for you to do before you have these conversations, whether you're talking about an interview for a new job or you're talking about a review at your current company looking for a promotion, is to sit down and think through what matters to you the most. because again, most people don't do well without a script, right? And so the more you can kind of anticipate some of the questions that will come

and some of the counteroffers that you might get, the better off you are. So if you are nervous about thinking through things on the fly, if you can think, okay, well, if somebody offers me a little, like some stock options versus tuition reimbursement, or if they offer me the chance to work with this one person as a mentor versus three days in the office. And all of those kind of permutations matter. And I mean, you're not going to think of everything. You're not going to have this giant matrix of stuff to commit to memory, but even just

the initial exercise of thinking that through is a really helpful thing. Okay, so let's go through a word for word script. Now, if I worked for a company that had a tuition reimbursement program for its employees, this would be fairly straightforward. I could just email and say, hi, I understand that you have a tuition reimbursement program. Can I learn more about it? It's pretty simple. Let's say I work for a company that does not have such a program.

So word-for-word script would be, Hi, I'm considering enrolling in classes to help increase my performance and make me a stronger asset to the company. However, tuition is expensive, so I'd love to discuss the possibility of the company offering some help. Lots of businesses offer tuition reimbursement, including some of our competitors. That's aggressive.

Including some of our competitors. And I'd like to make the case, that offering this benefit to all employees could be a big win for the company. Would you be available to talk about this? That's an aggressive ask. Well, but it's really not, really not, because it's framing it as kind of a win-win, and it's changing it from a, from me asking for something for me

to this is something that can help the company, right? this is something that our competitors do and something that if we were looking to have, if we were fighting over the same employee or same potential employee, it's really about kind of helping the company understand what's in it for them, right? If you're recruiting for positions and you're battling over the same employee, the same potential candidate as your competition is, and your competition has a tuition reimbursement program, but yours doesn't, it's a significant thing.

And so much of these conversations is about making it a win-win and saying, here's why this is good for the company. And that's true whether you're talking about tuition reimbursement, mentoring, charitable donation matching, all of these things have positive impacts on the company. I think that sometimes when people would consider asking for these things, they may not necessarily want to do it because they may fear the pushback of, you're not busy enough? Why are you bothering me with this? Why do I care?

Focus on your job. And what I try to do in the script is to switch that around and say, you know, this is something that's good for the company. And making me better makes the company better. And this also has these other ramifications too. Now, I notice in the script it talks about making this available for all employees. Why did you choose to put that in the script? Because when I hear that as an employer, what I immediately think is, wow, all right, the initial ask, which is this something that you and I can work out,

That initial ask is going to cost me maybe $10,000. But now if the ask gets amplified to, can you make this available for all employees, now you're asking me for something that's going to cost hundreds of thousands of dollars. But I think you can also look at it the other way, where asking for yourself can be viewed as kind of a selfish me, me move. Whereas if you're asking for it for everybody, then you're just seeing this as something that is a greater good. But that's also then the way that you can pitch it to the company as being valuable to them,

again, in recruiting in company morale in any number of ways. It's a significant thing. I think you're more likely to get a better reception if you're looking at it broadly, rather than just having it be about me. As an employer, what I would say right off the bat would be, well, we need to hit our revenue goals, we need to hit our certain sales goals. This money has to come from somewhere.

So either we reallocate from some other portion of the budget or we need more revenue. It's got to be one of the two. Yeah. And that's understandable. And that's why you end up needing to kind of make the broader case. because maybe if you're needing to bring in more revenue or your team is struggling, it's because you're having a hard time recruiting. And because competitor A has a better tuition reimbursement program or other sort of perks than you have.

And spending a little bit of that money in the tuition reimbursement frame may end up paying benefits in the longer term by helping you build a stronger team, happier team and like that. That's certainly one way to go about it. As an employer, all of the things that I could spend money on that would allow us to improve our products, grow our reach, and keep our team happy, it seems like a niche request that has come from one person, but that they're asking to be applied to all. It seems very, very, very, out of touch with an understanding of what our budget is and our understanding of what goes into budgetary decision making. Well, I don't think there's any question that the type of company and the overall demographics and various other aspects of the company would play a role into

kind of how you go about this potentially. Those points that you bring up are absolutely valid. But if you are a bigger company that is struggling to retain people, or a lot of your employees are young and really struggling financially and would be happier and more productive if you spent a little bit in terms of reimbursing their tuition when they're going back to college to improve their skills, it will eventually help the company and the long run, those are all things that can make a difference to a company as well. As we're seeing here, it's not a simple conversation and it's not something that is a guaranteed win for you. But as anybody who is priced out college in the last several years can attest talking about lots and lots and lots of money, it's a conversation that I think can be worth having because it, can also potentially illuminate your fit within your current company. So there's all sorts of reasons to have the conversation, even though it may not be the most comfortable.

Tell me more about how it illuminates your fit within your current company. Well, if it's something where you're already feeling overworked and you're putting too much time in and then you ask for this thing and you get read the riot act, then maybe that's another red flag that it's time for you to go. What are some other red flags that it's time for you to go? They always say that people don't leave companies, they leave bosses. That's a really big thing. If you are in a place where you don't feel like there is any growth opportunity for you,

certainly if you are not happy in the role that you're playing or you're overworked or whatever, and you feel like there's no room to grow, that can certainly be a red flag that it's time to go. And if you are somebody who does have some growth potential or you see growth potential in that space, and every time you ask for a new assignment or an extra assignment or kind of try and step your game up a little bit, to kind of get pushed back, that sort of thing can be a red flag as well. well, if you are asking for things that you think are reasonable, whether that is the fact that you haven't had a review in three years, or you have found out through research that your salary is 10, 15 percent lower than what other people with your title are getting on average, that can certainly be a sign that it's time to go,

especially if you have approached people about that fact and gotten pushed back, that can certainly be one as well. Other than asking open-ended questions, which we've talked about, what are some of the other tactics that a person should be thinking about as they're approaching conversations with employers around compensation and benefits? Well, one of the best things that people can do is role play and people may feel like

silly about it and think why am I doing that? That's we can't predict everything. But the simple act of acting out what a conversation is going to be with your boss or the person who you're interviewing for a job with can help you anticipate some questions

and help you feel a little more comfortable having those discussions, that's something that people don't necessarily see as much value in as there is, where it's a situation where you can run through it a few different times, where the first time, the person who you're talking to, who should be a trusted friend, someone you can open up with or a relative, you run through it that first time, and everything goes perfectly, you're just doing it to kind of run through the paces and feel good about yourself. Maybe you do it a second time where the other person pushes back a little bit more, throws you a couple of minor curveball questions,

and then maybe you do it a third time and they really hammer you. Right? And just get tough on you. It's similar to the sports idea of making the practice harder than the game. And again, you don't want to like beat somebody. down physically, and that you don't want to beat somebody down emotionally and all that, but having having gone through that kind of difficult situation, even just in play with somebody who you know well and are comfortable with, can help you at least mentally and emotionally prepare a little

bit for if things might go sideways when you're talking with somebody else. So what would be an example of that? Making the practice harder than the game, would that be the boss finding all of the shortcomings in your performance? Getting personal with you, calling you ungrateful and saying, don't you know that we just fired this number of people and the company had the worst quarter that it's had in 10 years? How dare you come to me and ask for these things? Who do you think you are? stuff like that. I mean, you can get as much into it as you want. But really, the idea is to keep it where it still has value. Chances are somebody's not going to rip you too hard in an interview, but just having a little bit of pushback, even where it's something a little lighter where the person may say, well, you didn't really anticipate you asking for a higher salary.

I don't think there's anything that we can do. And I'm not real happy with the fact that you asked. And then you can kind of have those conversations as to how you kind of deal with that kind of thing. So you're thinking through different possible landmines that you might run across. How would you deal with that if somebody said, hey, we weren't expecting you to ask this and we're not prepared for that. And also we're not happy that you asked. Well, it really is a lot about knowing your worth and having done your homework. And if you're comfortable where you say, I know that I make $75,000 a year, but my role looked at glass door

and places like that. And I saw that the average nationwide is $100,000. So I think that what I I'm asking is a reasonable request based on my research. How can we continue this discussion? That sort of thing. And so much of this is about doing your homework and knowing your worth. And really, one of the most interesting things, all I spoke with 110, 120 different people in writing the book. And one of the most interesting things that came up in relation, especially

to work and salary stuff is that the old idea of he or she who gives the first number loses isn't really a thing anymore. And that's awesome. And it's about people going in and knowing their worth and not settling for being lowballed.

Right. That combined with the trend of salary transparency gives people power that our parents would have loved to have had because there's so much information and there is so much empowerment in being confident enough in the research that you've done and your personal value to stand on that number regardless of what the other person says. Right. It's a big deal.

And it's something that older Americans could certainly have benefited from when they were younger. I wish that I had been forceful and confident enough in myself in my 20s and 30s coming up that I had been willing to stand on those numbers sometimes. every dollar you give up in your 20s is dollars you have to make up later on, right? So it's it's a good thing. Right. And particularly for people who are in their 20s and 30s, especially 20s, they might not yet have the confidence, which is often born from experience. Sure.

To be able to ask for more. That said, when is the right time to ask? Is it in December at the performance? review period, it's a typical year end, or are there opportunities throughout the year? It really depends on the company in a lot of ways. I mean, one thing that I will say is that Friday at five is not the time to ask, right? So, and there are also ways to kind of plant the seed a little bit and kind of figure out when time may be more right than others in your company. some companies just have policies where they do reviews of salaries and even titles once a year,

maybe twice a year or something like that. And if that's your company, then that may be kind of where you are. But at least you know that and you can prepare for that. Other companies, it may be a little more fluid, certainly in smaller startup sort of companies where they're kind of winging it a little bit more. There may be more of an opportunity. to where if you have just been killing it in business development or sales or whatever and you've had unbelievable quarter or stretch of quarters and you can go to the boss and say, hey, this is what I did to the bottom line. I haven't gotten a raise in a little bit. Is there an opportunity to talk? So it really is about taking the time to kind of understand

when your opportunity is because there's oftentimes not a one-size-fits-all answer. We started this conversation by highlighting the fact that every person has these little mini-negotiations throughout the day. So when you're talking to your spouse about who's going to pick up the kids from school, that itself is a little negotiation. What are the overarching principles of negotiation that can be drawn into those? conversations such that we have better relationship-oriented negotiations. So many times when you're dealing with relationships, it's just about being thoughtful and about setting yourself up for a situation where that negotiation is going to work out the best. Like there's an example in the book about somebody who was going to talk with,

talk about money with their partner for the first time. And every time she tried to do it, he was just like, oh, I don't want to do it. I don't want to do it. I don't want to do it. I don't talk about money, blah, blah, blah. So it became like a thing where she just didn't want to talk about it. So basically what she did was she took the approach of, okay, let's, instead of kind of dropping this on you as being like, let's talk this afternoon.

giving the person a little more runway and a little more time to where you can say, hey, I'd really like to have this conversation. And by no, now may not be the best time. Can we talk about it next weekend or something once we're done with this home remodel that we're doing? Also just reassuring the person that you aren't going to be interrogating them over attacking them. There's so much of that around money conversation with relatives, elderly parents, significant others, all that sort of thing where when you're talking to them for the first time,

you're saying, I'm not asking you for your balances and your passwords to all your investments in checking and savings accounts. I just want to kind of get a feel for what you think. And it can even be just kind of goofy stuff like party games. Like if you got a million dollars tomorrow and you had to spend it on something fun, what would you do? All of these little things that you can do to make the conversation as palatable and as unintimidating as you possibly can is really a good idea. I mean, really almost any kind of negotiation. And what I'm hearing, really, as you illustrate these examples, is not even so much about

negotiation, but just these are what I'm hearing you outline are principles of how to have constructive money conversations. Yeah, I mean, because it really all starts with that. I mean, if you, if the other person doesn't feel comfortable in that conversation, the negotiation's not going to work. And so much of it is about comfort and just feeling good about that spot, especially if you're talking about relationships where anybody who's been in any length of relationship knows how important it is to be open and honest and candid, but also understanding. Right. What do you do then if you have a close relationship with someone and you're trying to agree on something money related, but that person you feel is being obstinate or stubborn?

Well, it depends on the individual topic of conversation. It depends on how obstinate. Because the truth is that if your partner isn't willing to talk about money at all, you should probably run the other direction. That's as big a red flag as you get, because money is an aspect of everything in our relationship. from the very beginning to kids to retirement and everywhere in between. And if somebody is not ever willing to talk to you or very rarely willing to talk to you

in any sort of constructive way about money, it's a really big red flag. In terms of just kind of general icon, kind of budding your heads up against a wall kind of thing or some obstinence. Sometimes it can be as simple as living to fight another day, right? Where you're just like, we don't really think we're getting anywhere today. Let's sleep on this and talk about it tomorrow or in a few days because there is something to be said about the vibe of a moment, right? where whether that is in a room and you're talking to your partner and all they're thinking about

is all the stuff they've got to do at work tomorrow or the fact that the kid got a behavior notice in third grade or whatever and it's just a bad time. The same principle applies with customer service reps on the phone just because the person who you talked to that day didn't want to give you a break on your annual fee, doesn't mean that the person you call 48 hours later who sits in a different spot, the call center won't. There's something to be said for just pulling it back and saying, let's try this again another day and going from there.

If keep having to do that over and over and over and over again, then that's a separate issue. and that's something that you may have to take some bigger action on, but people shouldn't be frustrated too much or draw too many quick conclusions from a little bit of reluctance to talk. Is that a common problem, that reluctance to talk or the avoidance of the subject of money? Yeah, there's no question about it. People just don't like to talk about money.

It makes them uncomfortable. And that's part of why it's amazing that the salary transparency trend has come about. Because I mean, what's more personal than that? Right. And so I do think that you definitely have relationships where there's reluctance to talk. And for some people, it's about money. For some, it's about kids can be any topic. but again, when it is money, it's a big deal and it is something that you have to, that you have to be kind about.

And even to understand that progress can be progress, even if it's small, and having those conversations and kind of building that sort of comfort with the person on the other side of the, table or on the other end of the phone is an important step in building a relationship. And that difficult conversation today may plant the seed for easier conversations in 10 years or whatever. So live to fight another day. And if it's a long-term relationship, make incremental progress. Yeah. Yeah. All of that stuff matters. It's not too different from paying off debt, right? It's about getting started, it's about having an end in mind and not getting too hung up if things go up and down and sideways and all over the place a time or two. So the long-term trajectory matters more than short-term volatility.

And I guess in that regard, it's like trying to lose body fat or gain muscle. Yeah, that's absolutely right. Yeah. And one of the other things that in terms of negotiations, I found interesting that they would come up a few different times is around values and who you are comfortable with negotiating with versus maybe not. And like one example would be somebody who may not want to negotiate with small business, for example. They're perfectly fine negotiating with the giant chain store or big mega company, but the guy down the street who has got his boutique store, whose margins are super tiny, and who's trying to fight off Walmart, maybe you're not going to haggle on price with him necessarily. Sometimes people don't, won't negotiate with artists. They're buying something on the street.

because again, they know respecting the hustle, right, and the margins and that sort of thing. And those sorts of things matter. And also things like if you go to a habitat for humanity restore or a church, the rift store, you're not going to faggle there. Right. So there is something to be said for picking your spots in these situations and letting how you handle these negotiations reflect your views as a person and some of your values. Yeah. There was a guy in Kathmandu who had this bathroom scale.

And you could tell it was like his only asset. And he would, he'd sit on the sidewalk and with his bathroom scale. And for, for a few rupees, you could step on the scale and weigh yourself. Yeah. And that's one of those like, pay asking price and then you pay a tip on top of it. Because I respect that hustle. Like the guy who's like, I have nothing to my name but a bathroom scale and I'm going to monetize it. Yeah.

People who have had nothing. Yeah. Never forget that they once had nothing. Yeah. At least you would hope that they wouldn't forget. And that stuff, that stuff really matters. Yeah, exactly. Another example is really when you are, another example is when you are, another example is when

you know that you're going to be regularly using that person's service or visiting that place. It's a lot of times it comes up where do you tip when you get takeout and that sort of thing? And I always say that if you're going to be going back to that place, then yeah, you should tip. I generally tend to say you should tip regardless in those sort of situations. but if you have, if you got a really good service at your neighborhood restaurant, you're going to be back. Tip a little bit more. If you know that you, if you just bought a house and you know you have 20 things that you're going to need the handymanor contractor to do, don't haggle him to death on the first thing you're going to try and work with him on

because you're building that relationship and that'll help you going forward. those sorts of ways to negotiate as like a relationship builder are important. That's something that even where you're talking about like negotiating rent at an apartment, if you can sign a longer lease, that sort of stuff matters and that makes it to where that landlord will look at you in a little different way. I mean, a lot of it is about kind of finding these little levers to pull and buttons to push, whether you're talking about salary negotiation or any number of things. Right. And as a landlord, I can tell you, I've had tenants who negotiate their rent.

And I've had tenants who will say, hey, I've taken really good care of the place. I've always paid my rent on time. There's never been any issue. Here's a list of all of my positives. and I'm willing to sign a lease for an additional two years instead of just one. Can we discount the rent in order to reflect the fact that I've been a good tenant, blah, blah, blah. I've had tenants who have said that. I've also, this actually only happened once, and this wasn't a current tenant. This was someone who was a prospect was touring the place.

And he was trying to get me to come down on rent. And he was like, well, I just think it's garbage that people try to. a squeeze as much. You know, like, he was basically, like, berating me and insulting me going on this diatribe about how he felt like all landlords everywhere are extractive and just trying to squeeze as much money as they can. That was his approach to asking me for a discount. And I was like, I don't want a rent to you, you know, and he was not a tenant. He was just a prospect who was touring the place. And I was like, well, good luck. Keep walking, see.

Yeah. It's, we all have moments where things get away from us, right? But it's so much easier and so much more helpful in virtually every aspect of life to just not be a jerk to people. Yeah. And not just go on rants to people. And that, I mean, it's people want to work with people that they like. People want to be around people. that they like.

Yeah. And you don't have to be buddies or anything like that, but if somebody's nice and somebody's respectful to you and you're negotiating, if there's a bunch of people who are going in trying to rent an apartment or buy a house and you have some sort of rapport or connection or you're just nice to that person can be a little checkmark in your column, it may not win the day, especially if there's a big difference in somebody's willing to pay or whatever. But that sort of stuff matters.

I think the distinction is a reflection of worldview. Like the tenants who say, I take really good care of the property, I treat the property well, and also I'm willing to sign a longer lease term. So I'm reducing your risk of vacancy and turnover. Right. They have a worldview of creating a mutual win-win. Right. Versus the person who says, oh, all landlords everywhere are extractive has a worldview of a zero-sum game. Yeah.

I think that that's the fundamental distinction between those two examples is, is it a win-win worldview where everyone gains more, the benefit grows for all of us, or is it a zero-sum game in which one person's win is another person's. loss and everything is a battle. That fundamental difference in worldview anchors not just the success of a negotiation, but the quality of a person's life. And when we were talking about red flags and stuff when it comes to companies, the way that the companies deal with their employees who ask for various things in the context of if I do this, my skills will improve, which will thus help the company. And there are other examples as well.

If you get a lot of pushback on that, then that can tell you a little bit about the company too, where it's maybe it's a little short-sighted, maybe it lacks a little bit of perspective or whatever the case might be. but I think that that win-win, we were talking about with renters. That's true when you are talking, when you're negotiating with, again, like a contractor or a handyman, you say, hey, if you knock a little bit off the price,

I'll write you a good review online. Little stuff like that in so many different aspects of life and even relationships. where it's simple as you buy drinks for your friends one day, then the next time you go out, somebody else picks it up, and it goes around. And just being nice, making sure that everybody wins, making sure that everybody feels good generally about the transaction,

tends to work out way better than bullying or just being obnoxious or going on a diatribe like the person you talked about. Right. So going back to the tuition reimbursement example, that might be one of those. All right, the employee says, hey, will you reimburse tuition? The employer would, you know, would say, hey, can we get some kind of a guarantee that if we do, you will stay at this company for an additional two years so that we know that you're not going to take this class on our dime and then immediately quit one week later, right? Yeah, yeah.

And some of it may be based on what you're studying. If you're a coder and you're going to get your English literature degree or history or something, maybe they'll be like, okay, what are you doing here? Yeah. But again, if you can kind of present it in the context of helping the company and you being not a selfish person, but somebody who is trying to do better for themselves, but also to help the company, certainly helps. Yeah, absolutely.

Well, thank you for spending this time with us. Is there anything that I haven't asked about that you want to emphasize? The only thing that I would add is that people have way more power over their money than they realize. if people remember nothing else from this conversation, from my book, it's that. And people don't understand necessarily that they can ask for things, that they will be successful a lot of times when they ask for things, and that you do have power because so many people feel completely powerless over their money in a million different ways. And they don't understand that there are some things that they can do that can really help.

Some stuff may only help them get a $40 credit card late fee waived, but other things can save them five figures to the house or things like that. That power that you have is all about how companies view you and understanding that the longer you stick around, the more you spend money, with a company, the more money they make off of you. So it's ultimately in their interest, in most cases, to keep you around. And when you understand that, that can really help you feel more empowered and help you realize that you're not being needy or begging or being ungrateful or whatever the case might be. Never underestimate your own power when comes to your money. Never underestimate your own power when it comes to your money. You have more power with your money than you realize. Thank you. Thank you. This was fun. Thank you, Matt. What are

three key takeaways that we got from this conversation? Key takeaway number one, you've got more power than you think. Here's something many people don't realize. Companies actually want to keep you around because long-term customers are valuable. And once you get that, it totally changes how you approach asking for things. As a customer, you've got leverage. Banks and other businesses want to keep your business because they know that if you stick around, they're going to make more money off of you. Once you internalize that idea of the importance of lifetime value and how businesses view you, it kind of changes the mindset to where you're not necessarily going in any more groveling, saying, please, can I have this fee waived or whatever, you're going in a position

of power because they want you to stick around. So remember your power as a consumer. That is the first key takeaway. Key takeaway number two. Keep track of your wins, even the small ones. Take five minutes each week to jot down what you've accomplished because simple stuff like your regular duties, when done consistently, add up and go a long way.

And then on top of that, make sure you know any time that you went the extra mile or helped out a colleague because these notes become goal. when it's time to talk about a raise or a promotion. If you, once a week, take the time to note down all the things that you've done during that period, you can kind of build up this laundry list of things that you can then present to your supervisor the next time it comes up for promotion. Or if you're just like, I haven't had a job review in two years. it's time I'm bringing this up. It's really simple stuff like your basic job duties. But then it's also

things that you did that you went a little bit above and beyond on. That is the second key takeaway. Finally, key takeaway number three, make it a win-win. When you're asking for something, whether it's tuition reimbursement or extra training, whatever you're asking for, show how it helps the company, not just you. It's amazing how much more receptive people are when they see what's in it for them, too. So much of these conversations is about making it a win-win and saying, here's why this is good for the company. And that's true whether you're talking about tuition reimbursement, mentoring, charitable donation matching, all of these things have positive impacts on the company. I think that sometimes when people would consider asking for these things, they may not necessarily want to do it because they may fear the pushback of, you're not busy enough? Why are you bothering me with this?

Why do I care? Focus on your job. And what I try to do in the script is to switch that around and say, you know, know, this is something that's good for the company and making me better makes the company better. That is the third and final key takeaway from this conversation with Matt Schultz. Thank you so much for tuning in. If you enjoyed today's episode, please do three things. Number one, share it with a friend, a family member, a neighbor, a colleague. Share this with the people in your life. That's the single most important thing you can do to spread the message of great financial health.

Number two, please leave us a review in your favorite podcast playing app, whether that's Apple Podcasts or Spotify. Whatever it is you use, please open up that app, leave us a review, and make sure that you're following this show so that you don't miss any of our amazing upcoming episodes. And number three, subscribe to our newsletter at absolutely no cost. You can find it by going to afford anything.com slash newsletter. Again, that's afford anything.com slash newsletter. Thank you so much for tuning in. My name is Paula Pant. This is the Afford Anything podcast, and I'll meet you in the next episode.