You have been extended a job offer and the question arises, “what salary are you looking for?” An appropriate reply to the question would be, “what is your salary range?” Why? Because the first one to give the number sets the starting point, and if you don’t know it, you can’t work towards that number.

As the job outlook improves with roughly 200,000 jobs added a month, although a slow reduction in unemployment, companies are feeling confident about the economy and are beginning to hire again. You need to be ready because the salary best for you should not be a question to figure out at the time a job offer is extended.

Planning ahead will enable you to develop your own perspective on a fair compensation plan. That requires time and preparation, so here are some ways how get you on the road to figure out what may be the best salary for you.

First, determine your market value. It is the value you potentially bring to an available position. It is based on factors such as skill sets, knowledge, work and life experience, and how quickly you can transition and produce at the job. Seek advice from professional associations, peers at other companies, mentors, etc, and look up the Bureau of Labor Statistics (bls.gov) on the Internet. Together, these will help you get an idea what are acceptable salaries for the types of positions and their locations (city, state) you are applying for.

Second, sit down at a computer or with a pen and piece of paper, and outline your personal/family budget. List your fiscal obligations in the order of importance; for example, rent/mortgage, utilities (gas, electrical, water, etc), child expenditures (childcare, special events, educational requirements, etc), groceries, bus fare/gas, lunch money ...