Entries Tagged 'Salary' ↓

Today I read an  article on the New York Times titled “Lure of Big Paycheck Tugs at Graduates Considering Public Service“.  The basic gist of it is that top colleges are trying to encourage students to enter non-profit sectors and take jobs in public service, but many students are burdened with huge loans that they have to pay off so a secure job with a fat paycheck is the path they end up taking.  I am not surprised at this at all, but here are some of my thoughts in working in public service.

Most people are idealistic when they are young and then get disillusioned later, but I think I am the opposite.  In highschool I knew people that were truly believed that they could change the world for the better, but I wasn’t one of them.  I knew that after college I wanted a high paying job, and I wanted to be financially secure. I know that sounds selfish, but I figured that I am just practical. I also said to my friends that I would never work as a teacher or work for the government.  Now after graduating and working for three years at fairly well-paying corporate jobs, I think my thoughts on public service has changed quite a bit.

First of all, I think America really has a shortage of great teachers.  Most of my immediate family members have been teachers and professors in China at one time or another, and I think my dad enjoyed it more than most people. So I know that it can be a very personally fulfilling job. Anyway, I think one of the main problems with finding quality teachers is definitely financial.  The starting salary for highschool teachers in the Bay Area is around $30000 to $50000 depending on the school district and credentials, but the new teacher might have a buttload of student debt to pay off.  Couple that with the extremely high cost of living here in the Bay Area, I don’t see how we could get good public school teachers.  Good science and math teachers are especially hard to find because people who study science and math could get much more lucrative jobs. I went to Albany High School and I had a bunch of excellent science and math teachers who graduated from UC Berkeley.  They are mostly retired now, but any one of them could have taken up a more lucrative job as an engineer. I had a physics teacher that almost completed his electrical engineering PhD at UC Berkeley, but decided to be a high school teacher, and he was a great teacher.  If we don’t have more public school teachers like them, then the next generation of children will suffer as a whole.  Anyway, I know of one classmate who gave up her lucrative job at a large web retailer to apply for Teach for America, and I hope she is still teaching.

Next, I think many young people do not realize how much of their souls they have to give up for that big paycheck at that corporate job.  There are plenty of high profit businesses that have less than ethical practices.  Additionally, many highpaying jobs require you to work to your bone.  There is also corruption in public service, but for the most part I don’t believe it is encouraged.  Granted, there are plenty of great jobs in the private industry, too, but in the article I read a lot of these Harvard students are going to hedge funds, which I think are mostly shady businesses because they have very little regulation or disclosure. Of course, a public service job might also be terribly boring, but if it’s a job that helps people and fulfills you, then it might not be as bad.

Finally, there are lots of perks in public service and non-profit jobs, too.  For example, I think government employees still get pension for the most part, and my mom will get her healthcare covered after she retires.  Sure, the pay might be  lower, but a perpetual pension is worth quite a bit. Additionally, non-profit organizations  usually give more time off than for-profit corporations so that is worth something.  Also, I feel that there is a bit more job security in non-profit and public corporations.  Someone told me once that the government never fires anyone.  There is quite a bit of bureaucracy involved, and so people stay in a job forever.

Right now both of my parents work for non-profits.  My dad really thinks he is changing the world through his work, and I think that’s pretty cool.  My mom just started at a state university after working in a for profit company for all of her career in America.  She is trying to adjust to all the bureaucracy and a huge pay cut, but I think in the end she will reap the rewards of paid health care and a small pension. Now with that said, lately I have thought about getting a non-profit job sometime in the future because now I do want to change the world  for the better somehow.  However, I think I would be happier to do the job for free when I am financially independent.  As much as I have warmed up to the concept of public service, I am still practical and selfish by nature.  So I guess I will just have to spend a few more years as a well compensated corporate cube dweller.

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I don’t write very detailed numbers concerning my personal finances on this blog even though it is a personal finance blog. I always write some estimates and approximations and also things that have happened in the past. That seems a bit weird since I sort of advocated revealing salary information and being transparent about personal finance. I am actually really open with my close friends about my personal finances, but I do feel weird about revealing exact numerical details to the world. I also don’t keep a networth graph here like many other PF bloggers because I feel that is akin to keeping score with money. The hubby also doesn’t like to give out too much information. Anyway, today I decided to satisfy some personal finance voyeurs by posting our savings and expenses in terms of their percentages of our gross income. I took most of the numbers from our current paychecks, and some numbers are averages of bigger expenses.

Taxes

Payroll taxes: 20.16% - This includes Federal and California State Income taxes, Social Security and Medicare Taxes, and the CA SDI Tax. The total may seem a bit low because the income taxes are only taxed off our income after our fairly significant 401k deduction. The income taxes are also tiered, so only a portion of our money is taxed at the highest brackets. Though I am pretty sure we may owe some more taxes this year because I exercised some incentive stock options at the beginning of the year and we may trigger the AMT.

Living Expenses:

Rent: 12.26% - We have been living here for less than a year, and when our lease is up in July the rent might go up, but we don’t think it would be too egregious because our landlord is not some huge corporation and we’re taking care of his apartment. We really do enjoy living here.

Car Insurance :1.71% - The hubby just recently got a rate reduction for being a good driver. It took about three phone calls to the insurance company but those phone calls saved us $400 per 6 months term so I am pretty happy about that.

Car maintenance : 1.08% - This is an monthly average of the amount of money we spent on maintaining our cars in the past 9 months or so. We actually spend big chunks of money at once. For example, my last car maintenance was a bit over $1000, but this happens rarely so I averaged it out.

Utilities: 1.1% - The main utilities we pay include cable internet, the hubby’s cellphone, and electricity.

Food: 4.69% - I feel that we spend quite a bit on food every month, but actually sometimes eating out is cheaper than cooking. For example, making a couple sandwiches at home actually costs a lot because deli meats and bread are getting expensive. A lot of the times the hubby and I just buy one dish and split it because restaurants give too much food anyway. There is a really good Thai place nearby so one time we just bought one curry dish for $10 and then cooked rice at home and stuffed ourselves.

Gas: 2.52% - We have been doing good at saving gas lately by driving slower.

Entertainment: 1.1% - As it was laid out in The Baglady Budget, we have a 2% ceiling on entertainment, but actually we never spend that much. On average we have spent about 1.1% per month, and that’s why the hubby is running a surplus that he wants to use on a computer in a few months.

Donations: around 6.5 to 8% - We upped our donations a bit this year and we’re donating more than before. The percentage seems a bit small when it is based off our gross income. In light of the recent disasters in Burma and China we also added a few special donations this and last month.

Other: 0.7% - This category includes things like gifts. It seems that there is always a birthday or wedding around the corner. The hubby has a gift account for such expenses.

Total expenses inventory: ~31.61% of gross income

Savings:

401k: 17% - We both contribute 17% of our paychecks into our company 401k plans. The hubby was pleasantly surprised when he bumped his contributions this year from 10% and 17% and barely noticed a dip in his take home pay. The reason is that his taxes were reduced accordingly.

529 plan: 0.72% - I have a 529 plan open with Fidelity for our future child(ren). Right now we are putting very little into it every month.

The rest: 31.21% - The rest of the savings currently is going into money market funds in our Vanguard joint account. I also funded our Roth IRAs for last year with our savings. I’m not sure if we’ll qualify for Roth IRA again this year since the hubby may be getting a raise soon, but we’ll see. This money is also our emergency fund and house down payment savings. It is growing quite a bit and I may buy some more mutual funds with it once it gets past 25% of our entire portfolio.

Total savings: ~48.2% of gross income

I hope we can still save this much when we have kids, but I think we can afford to spend 15% of our income on a kid and still manage to save a good amount for the future. It is also good that we are able to essentially live on one income because this means we don’t have to worry if one of us loses employment. Anyway, it was fun to lay this out so I could see the flow of my money clearly, and I hope someone’s curiosity has been satisfied.

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Some time ago I wrote an article about crazy bosses and how they could drive you crazy. I haven’t had any super crazy boss, but I have had some nice bosses. Today I want to discuss the phenomenon when nice bosses actually encourage me to work harder voluntarily.

My current boss is really nice. He is really easy going and trusts people to work on their own. He wants us to get things done, but he never pushes extremely hard. He always allows people to take care of their personal hardships first and seems to truly care about his team. This week I asked for a day off for Friday because of the hubby’s bonus Vegas trip. So I asked if he would sign my vacation form, and he said don’t worry about it and just go. Then he told our entire team that we could take the whole week off because we just finished our release. This is actually the second time he negotiated with upper management to give us a week off. When our team is on a deadline we do work pretty hard and put in time late at night or on weekends so the days off are like a release bonus for all of us. Now the hubby says that I can use the time to clean the house and lose some weight. I’m not sure if that will really happen, but I could try.

I think nice bosses actually encourage me to work harder. When I am left alone and not prodded constantly I tend to finish my tasks faster. The key takeaway here is that if a boss leaves you alone to do your tasks it shows that he or she trusts you. Having that trust allows me to do the best I can do. I think if I had a crazy boss that looked over my shoulders constantly while I worked I would be pretty annoyed and just try to get him or her off my back as soon as possible.

Another thing is that by being nice, a boss actually instills loyalty in his or her reports. I know that in a previous article about Gen-Y and the workplace I wrote that there isn’t much loyalty between employees and companies these days, but there I believe loyalty still exists between people. For example, my team at work all share the same goal when we are working, and we all want our product to be the best so that everyone on the team can look good in the company. Having a nice leader makes me want success for the entire team because in a way I don’t want to disappoint them.

Finally, I believe that having a competent and nice boss is really better than having a higher salary because to me a friendly working environment is more important than money. What do you think? Do nice bosses naturally encourage you to work harder?

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In many ways, I am a minority in the United States. I am a female engineer, an Asian immigrant, a saver, and an only child. Being in the minority isn’t always easy, so I thought that I should write a series on how to succeed while you are different from the rest. First and foremost, you need to learn how to deal with prejudices. Here are some things I have learned over the years about how to deal with prejudice. I am sure it’s not a comprehensive list, but it’s a starting point.

1. Don’t fight battles with people who won’t listen - Sometimes you should just walk away from ridiculous bashing of your race, gender, or religion. Getting into a fight with unreasonable people is a waste of time.

2. Point out your discomfort - Sometimes people don’t know that you are offended by some comments or actions because America is such a multicultural place and there can be misunderstandings. I have encountered that at times and if I know that they are sensible people I try to explain my point of view. Most of the time this works well in the workplace where people are more civil.

3. Go to the authorities with evidence - Before you take the drastic action of suing someone you need to have evidence. For example, if you think that you’re being discriminated against in terms of pay you need to collect quite a bit of salary information in your company and that may be hard to get to. In other cases where violence has occurred you should report it as soon as possible so that the authorities can collect evidence.

4. Try to break the bad stereotypes - A lot of prejudice stems from stereotypes, and not all stereotypes are bad. For example, Asians are usually thought of as hard working and frugal. I don’t mind that at all, but there are stereotypes such as “only children can’t take care of themselves” and “women engineers are worse than male engineers” that I deal with. The only thing I could do is to break those stereotypes through action and show others that they are wrong.

5. Don’t threaten or throw back hate - Unfortunately, all of us are imperfect humans who are capable of hate and prejudice but adding to the cesspool of hatred isn’t going to solve anything. It is natural to be angry when you are attacked, but if you escalate attacks based on prejudice then there will be no end to the whole thing.

6. Don’t abuse your minority - Since America has so many laws against discrimination, there have been instances when people abused the laws and sued for “damages”. I think there is no point to raise a fuss if there is no real issue because that just brings more hatred against an entire group. Sometimes it is hard for people to tell what prejudice is, and simply talking to the “offender” could resolve a lot of things.

7. Don’t let prejudice cut you down - Finally, prejudice may throw obstacles in your path, but you shouldn’t let it deter you from your goal. For example, I am acutely aware of the fact that female workers still get paid less in this country, but I remedy that situation by moving to jobs with higher pay. Conquering obstacles often makes a person more competitive and likely to succeed.

For the most part, the prejudices I have dealt with over the years are quite small compared to what minorities dealt with in America in the last century. I think for the most part, prejudice could be dealt with in a civil manner in the current United States. The key is to recognize when you are treated unfairly and act accordingly.

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Recently, several personal finance bloggers I read have taken the plunge and quit their jobs. They include The Silicon Valley Blogger at The Digerati Life, Trent at The Simple Dollar, and my fellow peninsula resident Lazy Man. Today my friend asked me how much income I need from blogging to quit my job, and I told him I’d probably be willing to take a gross pay cut of $30000 per year. He then said, “you are willing to take that big of a paycut?” I then sort of explained that it isn’t as a big of a cut as it seems. Here are my reasons why.

1.Taxes take a big bite out of things - An extra $30000 ends up being only $15000 after the various taxes I have to pay. (Federal rate 28%, State rate 9.3%, plus social security, sdi, medicare) So really I’m really only taking a pay cut of $15000 take home.

2. I can save money on my vehicle when I stay at home - I really don’t drive very much. My commute is 9 miles each way and I have a pretty gas efficient Honda Accord that needs to be filled up every two to three weeks. Nevertheless, it costs me over $100 a month to get the fill ups. If I stay home and drive less I can save over $2000 a year on gas and maintenance. So that $15000 I am losing now becomes $13000.

3. I will be able to cook more and save more - Out of convenience we still go out to eat a lot these days. We come home between 7 to 8pm and just don’t have the time or will to cook. Sometimes we cook some simple salads and pasta, but the other times we go out to eat. If I do stay home I will be able to cook more and save a lot of money on food. I will have time to coupon clip and be even cheaper. The savings there could add up to another $2000 to $3000 a year. (We spend around $200 to $400 a month eating out right now)

4. I can write a lot more - These days I blog on my lunch hour or when I get home. It takes a lot of time to write anything coherent and informative. If I could concentrate on writing more I could grow my income stream better. Then the paycut would become smaller every day.

Unfortunately, I am nowhere near the income I would get if I took a $30000 paycut and if I quit my job now it would be pretty devastating. Another thing is that I would probably have to pay some money for health insurance if I were to get on my husband’s plan. The good news is that February is the best month year in terms of income and exposure for my blogging. I have already gotten $250 through various sources and I hope March is just as good or even better. Write on bloggers! Maybe one day you can quit your job like these brave souls I mentioned at the beginning of the post!

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