The Weight of Money

This post continues the discussion of unexpected or underestimated costs associated with a new job. This series looks at clothing, transportation, food, and professional fees.

Food: A new job may present or renew challenges of keeping within a lunch budget.

You could be leaving a position where there were endless opportunities of lunch options and joining a company with only a burger joint nearby. If this is the case, you’ll probably start saving and need to take time at home to actually pack a lunch.

However, if you’ve just entered a company amidst enticing lunch options, then you may face a bigger challenge. If you’re used to bringing your lunch, you may be able to walk blindly past all of the food places and continue your established ritual. However, if you’ve been starved for a variety of eating establishments, you may feel like you’ve struck a gold mine – at a price.

Because food and dining out is a common personal finance topic, this is a condensed list of suggestions and comments for reducing the impact of food on your wallet:

1) Tink about the reasoning behind your lunch choices:

• Is getting out of the office for lunch necessary for your stress level?
• Do you have the motivation to leave the office if you are not going out to eat?
• Do you find restaurant atmospheres relaxing or energizing?
• Do you develop better bonds with coworkers if you dine together regularly — does this require eating out or can you meet in the lunch or board room?
• Do you consider good dining a part of your standard of living?

2) Think of ways to meet your daily expectations in a way that fits your budget and your personal preferences.

• If eating out gives you a break from the office that you wouldn’t take otherwise, budget for it and enjoy your time without feeling guilty.
• If you work in an area full of great places and you enjoy good food, then decide how often you want to eat out and budget for it.
• If you love eating out but are focused on saving money, remind yourself why each time your pack your lunch or skip eating out.

3) Develop money saving suggestions based on your personal preferences.

• Visit places that have the best daily specials (price and quality).
• Order dishes that will give you enough leftovers for another day or more.
• Pack a lunch at home for every day or some days.
• Buddy up with someone willing to split plates.
• Balance how often you eat out for lunch with dining out for dinner.

Price of a New Job Series: Clothing, Transportation, Food, Professional Fees

This post continues the discussion of unexpected or underestimated costs associated with a new job. This series looks at clothing, transportation, dining, and professional fees.

Transportation: A new position can take you either closer or further from home than your last position. Clearly, if it turns out to be closer, then you are probably saving some money in transportation costs. However, if you decided the new job is worth a longer commute, you may be surprised at exactly how much that new commute is going to cost in time and money.

Transportation & Costs: Start by calculating the cost per mile to drive your car. You can look at several online calculators and articles for details on doing this. Calculators range from simple (gas price per mile), moderate (cost per mile), and complex (true cost of driving). I highly recommend calculating in insurance, maintenance, and wear and tear for more accurate consideration.

Driving: If both the new and previous job require a driving commute, it is easy to compare the difference. Simply multiple the number of miles to and from work each day by the cost per mile. You can compare the daily differences, but also compare weekly (day x 5) and yearly (week x 52). What can be a $3 difference a day works out to $780 over the year.

Public Transportation: If either or both commutes required the sole use of public transportation, simply calculate your daily and annual cost for comparison.

Driving & Public Transportation: Now, if your commute requires the use of both public transportation and driving, calculations and comparisons are slightly more complicated. I found several calculators that allow you to compare the cost of driving versus using public transit, but most lacked the ability to combine both options and were region specific. The WMATA Calculator gives you comparisons for several different commuting options (driving, driving+public, public); however, their calculator is based on local fares and fees. For do-it-yourselfers, just add the daily public transportation cost to your daily driving cost if you combine public transportation and driving in your commute.

Important: One very important item to realize: even if you take public transportation you still incur annual vehicle costs if you own a car. Insurance and maintenance fees will be less when you are not driving every day but they will not disappear. This is something that many people overlook when championing the public transportation platform and calculating their annual transportation costs.

For my new job, I am using public transportation exclusively and using this option as one of the justifications for selling my car.

Transportation & Time: This area of comparison is more subjective and there are several options for how to address it.

Option One: If you simply alter your driving commute, there will be a straight forward comparison of time commuting. You can use this as a simple comparison.

Option Two: In my Comparing Job Offer Series, I calculated the value of time at work on a salary per hours worked basis. When considering a commute, some people may simply add the commute time to their workday. For these people, this is time that cannot be used for anything else and should be counted as part of their workday calculated as such.

Option Three: When using public transportation, you have another option. You may conclude that the time you spend commuting is free time to read the morning paper or a good book. This time would not count as part of your work day and you may find it a valuable use of time.

For my new job, my public transpiration commute of nearly three hours a day is time that I use for personal reading and relaxation. I do not consider it part of my work day and am happy to have “me time” each day – something that often gets cut out of my schedule when other tasks take precedent.

There are many ways of looking at time and commuting. These three options simply offer some options for how to consider your commute. As mentioned, evaluating time is subjective and is dependent on individual preferences and situations.

Price of a New Job Series: Clothing, Transportation, Food, Professional Fees

A new job should be all about new income but often new expenditures come too. There are changes in transportation, clothing, dinging, and social environment — each of these can take a bite out of the to-be-received paycheck.

Clothing: Will your new position require a change in your clothing style? Is it casual, business casual, or formal? Will you be working in an environment where clothing matters (i.e. The Devil Wears Prada)? As much as I deplore keeping up with the Jones, you will probably want to make a good impression and fit in at work — this may mean buying new clothes.

My new position is with a highly respected national organization. I converse primarily with presidents of colleges and universities across the country and will eventually attending meetings with these people. Additionally, my position is in Washington, D.C. and there is a certain dress code or fashion culture present. In short, my wardrobe is insufficient for this office.

I recently spent $150 on new clothing at a local, lower-cost clothing store. I know that the quality of this store is not the greatest, but I needed enough variety to get me through the upcoming weeks and I hate to spend money. My penny pinching on clothing has already resulted in a pair of pants that look like they will barely last 2 months. Sigh. I still need to purchase more clothing.

I frequent thrift stores for clothing but rarely find good buys. I am not sure where to shop because I am not a shopper and am not fashion conscious. I want clothes that can go through the wash and look fine. I also want clothes that are going to last because I’m not interested in matching the latest fashion style, I want to buy it once and never again.

So, on my current shopping list is:
- 3 pairs of pants — must wash and dry well, ironing is a pain (est. $100-120)
- 1 or 2 pairs of shoes — something that is both comfortable and will go with all of the pants (est. $60 - 100)
- 3 tops — this is to supplement the five tops I recently purchased (est. $60-100)
- 2 bras — I simply need new undergarments and they need to not be black (est. $80)
- 10 pairs dress socks - I want two weeks worth of socks, but I also need a variety to match shoes/pants (est. $20-30)
- accessories — watch, necklaces, bracelets (est. $100)

The accessories are to help add variety to the wardrobe. The above purchases, along with what is in my closet, will give me about 2 weeks worth of office clothes. This means I will need to change the looks with small accessory changes to help reduce the redundancy. I am not an accessories person, but it is a step to help fit in and limit my clothing purchases.

I will see what I can find at the local thrift stores this week. However, I will buy quality clothing if I go to another clothing store — no more buying pants that last only a couple weeks before showing wear.

I must state that I hate spending money on clothing. I tend to go shopping with the intent to buy and come home with nothing. Here is one area where childhood has a strong influence on my shopping habits. As a child, my mom would take me shopping and allow me to pick out many things. Then, after we’d settled on which items I wanted, she’d suddenly decide that we could only afford to buy two or three items. As an adult, if I ever end up with more than an item or two I start panicking over the cost and end up leaving the store empty-handed — or, I simply rationalize that it is all too expensive and don’t bother picking anything out.

Price of a New Job Series: Clothing, Transportation, Food, Professional Fees

Dual-employed partners often need to compare their insurance benefits to select the plan or combination of plans that will best fit their needs and financial goals.

My new job pays 100% of individual premiums and 50% of dependent premiums. The partner’s job pays 30%. This comparison shows that the high percentage paid does not always mean a better deal, at least in terms of our desired PPO plan.

When comparing plans offered by your respective empolyers, follow two simple steps:

Step One: Find out if either employer will provide a cash payout if you do not use their medical benefits. Some companies will pay you in salary what you are not using in medical benefits.

For my company, however, this was not an option.

Step Two: Compare the fees associated with each plan and decide on a plan of action. Be sure to consider premiums, deductible, co-pays, percentage paid, etc. (See final remarks for additional considerations.)

Luckily for us, the plans at both HIS and HER companies were simmilar and required only a comparison of employee-paid premiums. Here are the comparisons that I went through:

Cost Comparison: This table lists the costs of each plan based on HIS and HER company; these are the fees that we pay and do not include employer contributions. HER company does not have a plan similar to the POS plan we currently participate in.

Options: The second chart details the comparisons I used in order to determine our plan of action.
- Plan 1: No Change. We stay with the family plan at HIS company that we have now.
- Plan 2: We switch to the family plan at HER company.
- Plan 3: We change to the Individual+Child plan at HIS company and sign up for the individual plan at HER company.
- Plan 4: We change to the Individual plan at HIS company and sign up for the Individual+Child at HER company.

Plan of Action: As you can see, the best option for us is Plan 3 - change to Individual+Child plan at HIS company and enroll in the individual plan at HER company.

Savings: Our annual savings will be $1,288.82 a year, $107.40 a month, and $49.57 a paycheck.

Final Thoughts: If you compare your health plans and discover that they are both fairly similar in all aspects, including employee-paid premiums, pay attention to the full premium. If you ever lose your job and must rely on COBRA, this is the monthly fee that you will be required to pay. For dual-earner families, this may not be a big consideration because you can always begin using the insurance benefits from the employed partner.

Also, the type of coverage desired obviously has a big impact on the fees. I personally desire PPO plans for my own, personal medical care. For the rest of my family, the POS plan that we currently have is sufficient. Our plan of action will meet the needs of our family and our situation well.

Carnival of Personal Finance #67 has been posted on Canadian Capitalist.

Some posts I enjoyed:

Colorado Health Insurance Insider’s post about kids and health insurance.

My Finanical Awareness’s post on money and relationships. I don’t think enough can ever be said about this subject and hearing the same things over and over again is a good reminder.

Accumulating Money’s Need vs. Want. This seems like an ongoing dialogue with the partner, classifying things as a need or want. He seems really stuck in the everything is a “need” category.

My long job search has finally ended. I started at a national non-profit last week and my head has been spinning ever since. I’m part of a project that has just launched a national call for proposals and the activity is almost overwhelming. I’ve come home from work exhausted every night, yet eager to wake up and start again.

In terms of personal finances:

The position is $1,000 less than I wanted but I took it anyways. It is $12,000 more than my last position, so that makes me feel a little better. I described many details about this position in my evaluating job offer series Part One and Two (it is closely related to job offer two).

My title leaves much to be desired because it is the same one I had at my last job. However, I realize the responsibilty is much greater than previous positions and it provides a good challenge and opportunity to excel.

I have to commute to work and will be using public transportation. This requires a ~45 minute bus ride, 22 minute train ride, and 10 minute walk (to the bus and then to the office) each way. For me it works out to free exercise and about $130 a month. I will be able to get $105/month in pre-tax benefits.

I must improve my habit of bringing lunch to work. I work in an area full of wonderful food; it can add up quickly. Last week put a major damper on my budget because I failed to bring a lunch each day.

I am excited about this position. It is taking me away from home for longer periods of time than I am used to. My family is having to adjust to the fact that the partner is now the one home the majority of the time but I know that it will work out as we get used to the new schedule.

In July I posted about selling my car and got some useful comments. However, I realized that I still hadn’t committed to either prospect.

To briefly folow up on previous comments: 1) we will (most likely) not be getting a new car payment — we both like the freedom of owning our cars outright; 2) Maryland insurance was more than $3,000 a year and Oklahoma was $500 — big difference; 3) the partner’s marriage discount amounted to $100 a year — not impressive.

The partner and I discussed this further and outlied the pros for selling:

• milage (almost 140K)
• no a/c — summer in Maryland is painful and none of our three cars has a/c
• stick shift — annoying in rush hour traffic but otherwise great
• front-wheel drive is harder for the partner to work on
• no where to work on a vehicle at current residence
• don’t want unexpected problems to arise — more common as car gets older
• will be easier to sell now than later
• I will be using public transit for work and need to reduce transportation costs
• we really don’t need three cars for two drivers
• no inspection fees and fees to tag it in MD

and the cons for selling:

• I love my car
• timing on being able to buy a newer car — will I be stuck driving his car for a while?
• it is a great car and it never complains about anything
• time and effort
• again, I really love my car

So, we’ve decided to sell my car and I think I have finally settled and accepted this fact. This weekend I will do everything I can to get it cleaned and see if I can get out some spots in the backseat (oh the joys of children). Then, I think I’ll visit the local CarMax, but I know they offer low numbers for cars over 100K, and then post to craigslist. I’ll also post around in my social circles as well.

Also, I am considering getting it Maryland inspected anyways just so I can advertise that it has been done. This will help in terms of selling the car, I think, but will create a new timeline needed to get it sold. I’m a bit swamped right now and wondering if this will come back to bite me.

Finaly, I think the blue book value for my car is $3,100 but I just don’t see anyone paying that much for it. It is a great, reliable car but it has power-nothing (except breaks and steering) and no a/c. Maybe this cool spell and cooler weather that we are having will help people overlook that aspect. The heater works great!

I have lived with high speed internet for at least 7 years. It started with DSL and my last residence had a T1 line. Needless to say, I have grown very accustom to high speed internet access. The partner has been living with high speed internet even longer than I have. We are both firmly committed to high speed access, or so we thought.

As soon as we signed the lease for our current residence, I ordered DSL and phone service. After a lot of calls and trouble tickets, the local dsl service finally decided that we cannot get high speed internet at our residence. All of the other dsl providers in the area echo this sentiment and we’re left with only cable modem options.

However, neither the partner nor I want to spend money with the local cable companies. Yes, we are quite aware of the fact that we don’t have to get cable in order to get internet, but that isn’t really the issue. Being a tv-free household, we just don’t want our money going to this company. Maybe some people think this is ridiculous, but it is just part of our way of voting with our dollars and we’re voting ourselves right out of internet.

Now, while we were waiting for the dsl that was not to be to get installed, we had to come up with some other internet options. The partner discovered that he could dial into a friends house and I remembered the free dial-up access I can get through campus. So, we’ve been making do with dialup and have discovered that it just might actually work for us.

We are looking at the option of paying nothing for a slower connection or paying $60+ to a place we don’t want to support. Now, while I thought that dial-up would be the end of the world, it turns out that is not the case. Dialup is actually working out just fine for the surfing that we are doing. The partner had high speed access at work, so he can get all of his streaming news articles. I am patient and will wait the couple of minutes for my pages full of tabs to load. Overall, it is far better than I thought it would be.

So now, I think we’ve decided that we would rather deal with slightly slower service for free instead of adding to our already elevated monthly expenses. Maybe it is something other internet-addicts (which I am also) could actually do for the right price. But I know, most people will read this and think “dial-up? no way!” and a couple months ago, I was right there too. But, having given it a go for several weeks now, it’s not too bad. In fact, I think we can make this work for the next year for an annual savings of about $800.

Welcome to the conclusion of my mini comparing job offers series. In the previous post, Comparing Job Offers: Part One, I compared the financial value of benefits offered by two different jobs. Now, having some numbers to work with, it is time to also consider the other job qualities that can make or break a job offer.

While the salary offered stands out for each job, we must recognize that money is not everything. There are several other qualities that must be considered when looking at the big picture of a new position. These qualities vary based on your personal preferences and everyone should compile a list of criteria to judge the positions by. Some qualities to consider are:

• Workplace culture: What is the office atmosphere and the general attitude of coworkers? Is it an office where the finish line is on everyone’s mind and you must constantly wonder if your coworkers are working for or against you? Is it an environment where everyone is friendly and interested in working together on projects?

• Office Location:Where is the office located? Will you be out in the middle of no where with nothing to fill the required 1 hour lunch break or are there endless temptations just next door waiting to lighten your wallet?
• Prestige: How will you feel telling your friends and peers about the company? Is it a company or organization that lends additional respect to the work you are doing? Also, how will it look on the resume when looking for a future position?
• Work day: What are the hours? Is full-time a 35-hour work week or a 60-hour work week? Do you have to be a slave to the clock? Is there flextime available?
• Time Off: Just like time in the office, consider how much time you’ll be able to spend out of the office. You can place a dollar value on this and determine the importance of time off in terms of job satisfaction.
• Commute: How long will it take to get to work? What are your transportation options? Car? Train?
• Duties: What are your tasks? How do they compare to your experience, desired level of responsibility, and future growth? How do they compare between offers? Also, how challenging is the position?
• Stress: What is the stress level expected for this position. This can include a combination of commute, schedule, time off, and duties.
• Growth and Advanement: Is there room for growth? Is individual advancement expected and encouraged? Will this position stall your career growth potential?
• Personal Values: How does the position fit in with your personal values? Will you be doing work that you feel is worthwhile? Will you be working to improve the bottom line for you and/or yourself?

As a reminder, I am comparing the following hypothtical positions in this series:

Job Offer One: Office Manager position at a for-profit, blue-collar industry company. This is a small, home-based business that has been in business for many years. This is a new position for the company and was established to respond to the companies continued growth in business. There are only two or three office personnel and the remaining staff work out of the office at customer sites. There is little to no room for growth or personal advancement in this position. ($38,000/year)

Job Offer Two: Program Assistant position at a non-profit, education field organization. This is an organization that has been in operation for almost 100 years and is nationally recognized in the field of education. This is a new position paid for by a new grant funded initiative. There are almost 50 staff members working on a variety of projects, programs, and initiatives. There is extensive room for growth and personal advancement in this position. ($33,000/year)

Conclusion: This chart illustrates the degree of differences between the two job offers. For me, this is the comparison that truly makes a difference. Based on this comparison, I am far more interested in Job Offer Two, even with the longer commute and smaller salary. Thanks to taking the time to compare job qualities and the financial value of benefits, I am confident that my selection is a good one.

Resources:
Comparing two or more job offers looks mostly at the financial aspects but also lists the importance of considering job factors.
How to Weigh Pay vs. Prestige When Comparing Job Offers talks about the importance of prestige and how it can go farther than your paycheck sometimes.
Comparing all the factors when comparing to jobs has lists similar to the one above. It also describes rating the qualities on a numerical scale.

For those who have be actively searching for a new job for several months, like me, you may not believe this could ever be a problem. For those entering the job market with high hopes and expectations, you might be expecting companies to be falling all over themselves to get you. Either way, it is important to carefully analyze each job offer your receive (and/or negotiate).

Part One of The Weight of Money’s Comparing Job Offers series focuses on benefits.

While salary is one of the primary criteria for judging employment positions, it should not be the only criteria. There are many other factors about an offer that should be considered, including responsibilities, advancement, commute, office environments, and benefits.

In my search to compare two upcoming job offers, I found several articles detailing ways to compare the overall job qualities. However, I wanted to focuses on benefits packages and look a true values, in dollar amounts, of each option.

In this series, I will compare two different job offer packages. While this is a fictitious example, it is closely related to personal choices that I will be making in the next week. Therefore, I will also be evaluating these offers based on my preferences. Each job seeker should carefully use their own criteria to judge offers.

Job Offer One: Office Manager position at a for-profit, blue-collar industry company. This is a small, home-based business that has been in business for many years. This is a new position for the company and was established to respond to the companies continued growth in business. There are only two or three office personnel and the remaining staff work out of the office at customer sites. There is little to no room for growth or personal advancement in this position.

Job Offer Two: Program Assistant position at a non-profit, education field organization. This is an organization that has been in operation for almost 100 years and is nationally recognized in the field of education. This is a new position paid for by a new grant funded initiative. There are almost 50 staff members working on a variety of projects, programs, and initiatives. There is extensive room for growth and personal advancement in this position.

Generalizations made to simplify calculations: Medical and insurance premium were kept consistent for both organizations. Annual salary increases were excluded.

Time Off Adjustment: This adjustment will depend on your personal preferences. For me, time off is extremely important and therefore highly relevant in calculating the amount paid per week of actual work. One reason for this preference is that my personal time commitments necessitate at least 11 vacation days a year. Also, some people may choose to exclude sick leave from this calculation. While I feel that it is not advisable to use all available sick leave, I do not want to be penalized with unpaid time off if I, or my child, should get sick for an extended period of time or ill several times in one year.

Conclusions: Developing this chart really helped compare the different benefits packages with actual numbers. It confirmed my understanding that while non-profits often pay less than their for-profit counter parts, their benefits packages can often make up the difference in pay.

Next: In Comparing Job Offers: Part Two, I will evaluate the overall job characteristics of each position. While salary and the actual value of benefits helps paint the financial picture for each job offer, there are other important considerations that should be made before making a final decision.

Resources:
The only source I’ve found discussing calculating vacation time was The Value of a Vacation Week posted at Find a New Job.

Next: Part Two