Self-made millionaire: Don't make these 5 mistakes when negotiating your salary

Ramit Sethi
CNBC Make It

Negotiating your salary is the most crucial part of the hiring process. That single conversation can be worth enough money to spend lavishly on things you love, take that exotic trip, pay off debt, buy drinks for your friends or even retire early.

There's a limit to how much you can save, but there's no limit to how much you can earn. And with just one conversation, you can boost your income for life.

When negotiating your salary, always avoid these five mistakes:

1. Don't tell them your current salary

The primary reason employers always ask for your current salary is simply so they can offer you just a little bit more than what you're currently making.

If you're asked this question, say, "I'm sure we can find a number that's fair for both of us." If they press you, push back: "I'm not comfortable revealing my salary, so let's move on. What else can I answer for you?"

Keep in mind that it's typically the first-line recruiters who ask this question first. If they won't budge, ask to speak to the hiring manager. No recruiter wants to be responsible for losing a great candidate.

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If the gatekeeper insists on knowing, consider playing hardball, because you can always jump back to negotiating later. (Also, in New York, asking for your current salary is actually against the law.)

2. Don't make the first offer

Making the first offer is their job. It's that simple.

If they ask you to suggest a number, just smile and say, "Now come on, that's your job. What's a fair number that we can both work from?"

3. Don't tell them if you have an offer from a 'mediocre' company

If you've got another offer from a company that's generally regarded to be "mediocre," don't reveal the company's name. You can still answer with something vague (but true), such as, "It's another tech company that focuses on online consumer applications."

...with just one conversation, you can boost your income for life.
Ramit Sethi
author, "I Will Teach You to Be Rich"

If you say the name of the mediocre company, the negotiator essentially has you in a corner, and instead of focusing on negotiating, they'll just keep telling you why it'll you'll be happier at their company. So be smart and withhold this information.

4. Don't ask 'yes' or 'no' questions

Avoid saying things like, "You offered me $50,000 dollars. Can you do $55,000?" Instead, say, "Your $50,000 offer is an excellent start. We're in the same ballpark, but how can we get to $55,000?"

5. Don't lie

Don't say you have another offer when you don't. Don't inflate your current salary. Don't promise things you can't deliver. You should always be truthful in negotiations.

Ramit Sethi, author of the New York Times best-seller "I Will Teach You To Be Rich," has become a financial guru to millions of readers in their 20s, 30s and 40s. He became a self-made millionaire at a young age thanks to his website (which he started as a Stanford undergraduate in 2004), book and personal finance courses.

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