Sometimes I think of financial resiliency as a real-life Super Mario game. In the video game, you are trying to move forward and get bombarded with piranha plants, ice boulders, firebars. In real life, there is precarious employment, skyrocketing housing costs, post-secondary education, privilege, systemic racism, loaded dice, fixed fights.…. It often seems Leonard Cohen might be right in saying “everybody knows, the poor stay poor, the rich, get rich”.

Recently, Duca’s State of Fair Banking in Canada report found that of respondents who knew their interest rate, BIPOC (black, indigenous / people of Colour), were charged interest rates that were 22% - 44% higher than white Canadians. Sadly, this is yet another example of the systemic challenges Canadians are struggling with.

The report also clarified a small window of opportunity. According to one third of lenders, customers with similar credit scores will get better prices if they negotiate well. So, negotiation can be like those blocks in the game that when activated, will grow and act like a ladder or vine helping you avert the obstacle. But, just like in the game, they are only available when you press a certain block. So only in certain situations - making negotiation one of the many props needed in the journey towards financial resiliency. With, this in mind, I have outlined three steps to activate the negotiation prop.

1. Know you can negotiate and consider negotiation part of the process

In a 2019 survey by LowerRates, 37% of Canadians did not know you can negotiate a mortgage to get a better rate[1]. I personally have negotiated on salary, mortgage, renovation costs, bank fees and monthly phone plans. I have interviewed many individuals who have negotiated on everything from real estate broker fees, insurance costs, loan interest rates, and hotel charges to conference fees and large purchases like furniture or appliances as well as everyday purchases on kijiji or facebook marketplace.

2. Understand the market and possibilities for value

Being able to secure the best value from a negotiation requires some sleuthing work up front. It requires understanding the full value associated with a potential purchase or agreement. This is not hard work but it is work. So, if we are negotiating a loan, mortgage or credit card rate, we need to understand the various options provided by different providers and the benefits associated with each option. If we are negotiating a salary offer, we will want to find out about pay, level of benefits and supports such as education for similar roles in the organization, pay for level of education, expertise, years of experience.

Individuals I have interviewed for Strive go about this in various ways – they look for information online, post questions in various community groups or ask friends and colleagues (here’s a good blog on discussing salaries at work). One of the individuals I interviewed had built a running spreadsheet of all the salaries they had knowledge of including colleagues, those found on Glassdoor, those posted with roles they had been interested in. This helped them not only in negotiation but also in thinking about their next career moves.

3. Understand what you want and your value

It is important to understand what you want out of a negotiation and what you are bringing to the table. If you are getting a loan to consolidate your credit cards, have researched interest rates, and have a target of x%, then a good process will likely involve a number of meetings with various providers and managers. Unfortunately, that is the case –rejection does not mean it is not possible. The interest rate you get will vary across providers and across individuals within the same provider. So, the greater the number of individuals and providers you speak with, the greater the chance of getting closer to what you are looking for. The process may involve language like:

· “Thank you for your offering, I was looking for something in this range. I know this is possible through research. What is required for me to secure this rate?” This helps you understand the components of the decision.

· “Are there any other options you can think of that would enable me to get closer to this rate?” This helps you get them engaged in the problem solving.

· “I’m really hoping to better understand the opportunities available to me. I know through research that individuals like me typically struggle with getting the best rates and that your bank has made a commitment to diversity and inclusion. I’d like to book an appointment with the manager to go through my application and get their advice on ways that I might be able to get a lower rate?” If you are in a marginalized population, this demonstrates your knowledge of systemic issues, creates accountability to public commitments the organization has most likely made and approaches the situation in a constructive solutions-oriented manner.

· “Thank you for your offering. As I am looking for something closer to this range, I will connect with other providers to better understand my options. I’ll certainly connect with you if this is the best offering.” This positions you to check with other providers yet come back if this is the best that you can find.

If you are working on a salary discussion, what is your goal for base salary, benefits, bonus, vacation time, RRSP contribution…. Equally as important, what is the unique value that differentiates you from other candidates. Why are you better? Sometimes we may not have all the experience an employer is looking for but we bring certain expertise or qualities to the table that we know are critical to success. It is important to take the time to clarify and communicate that.

In non-salary negotiations, understanding your value can help problem solve unique solutions. My parents were immigrants and like many families, we struggled financially. As my father was handy, they were able to negotiate a reduction in rent in exchange for taking care of small repairs, cleaning and maintaining the 10-unit building we lived in. One individual I spoke with offered to volunteer at, or write blogs about conferences they wanted to attend but could not afford.

Summary

On that road to financial resiliency, there will be many challenges that come your way and negotiation is an important tool in your toolbox. It can help you address some of those challenges. Knowing you can negotiate, understanding the market and possibilities for value as well as what you want and your value will help you overcome some of the obstacles that come your way.

[1] https://www.lowestrates.ca/blog/homes/canadians-dont-know-mortgage-rates-are-negotiable