2010 April | Well Heeled Blog

Will Social Security Be There When I Retire?

Written by WellHeeled on April 28, 2010 · 16 Comments

Will social security be there when I retire? Probably, but with caveats

One common refrain I’ve heard is that today’s young adults don’t (or can’t) expect Social Security (the combined Old-Age, Survivors, and Disability Insurance Trust Funds) to be there when we’re older. I understand that sentiment. There are very serious issues facing Social Security. Unless changes are made, we can’t keep paying out benefits the way we have been. (See this CNN Money series that explains the system).

But I don’t believe in the knee-jerk response that Social Security is dead! or that we are only going to get a few pennies when we reach our dotage. Government retirement / disability insurance is a valuable safety net for the disabled and seniors, even though I am still 40 years away from retirement age, I expect some form of Social Security payment to be there when I retire.

Safety net, not the whole kit and caboodle

Expecting some form of Social Security, however, doesn’t mean that I expect 100% of my benefits nor do I expect the government retirement insurance to be my only source of income in retirement. In fact, the Social Security Statement (an annual statement that is mailed about 3 months before your birthday) that I received last year tells it pretty much like it is:

…Social Security was never intended to be your only source of income when you retire. You also will need other savings, investments, pensions or retirement accounts to make sure you have enough money to live comfortably when you retire.

…the Social Security system is facing serious financial problems, and action is needed soon to make sure the system will be sound when today’s young workers are ready for retirement. In 2017 we will begin paying more in benefits than we collect in taxes. Without changes, by 2041 the Social Security Trust Fund will be exhausted and there will be enough money to pay only about 78 cents for each dollar of scheduled benefits.

These are sobering facts. Still, 3/4 payout of scheduled benefits (or even 1/2 payout) is a far cry from the dire prediction of absolutely zero benefits. Of course, many things can happen in the next 30 to 40 years, but I think it’s more likely that Congress will enact changes, such as means-testing for benefits, increasing eligibility age, lowering benefits, increasing the income that can be taxed under Social Security, etc. than allowing the entire system to go “bankrupt.”

What you can learn from your Social Security Statement

Looking through my Statement was quite interesting – it detailed the years I worked and my taxed earnings, the basis for which my future benefits will be calculated. According to my statement, I do not qualify for retirement benefits or Medicare benefits (although I have qualified for disability benefits) because I’ve only been working for a few years. You need 40 credits to get retirement benefits – a maximum of 4 credits per year. Every year, the income needed to get each credit changes – for example, in 2009 you would earn 1 credit for each $1,090 of income. That means if you’ve earned $4,360, you will have earned the full 4 credits.

Apparently, I only have 17 credits, but of course as I work more I expect to very quickly reach retirement payment eligibility. Now I understand why people who have stepped away from full-time work are penalized under the system – not only are Social Security benefits calculated from your total income, your own eligibility is determined by the number of years you’ve worked.

My bottom line on Social Security

Nobody knows what today’s 25-year-olds will get in terms of Social Security in 40 years, just like nobody knows if any one particular 25-year-old will live to retirement age. But I feel comfortable expecting something (both in terms of getting some Social Security, and living long enough for that to be a concern to me!). It’s too soon for me to incorporate estimated benefits into my planning, however. As I come closer to retirement I will take Social Security payments in account, but for right now I will continue to save as aggressively as I can for retirement.

Do you expect Social Security when you retire?

image source: socialsecurityretirementincome.com

How to Squeeze Time Out of Your Day

Written by WellHeeled on April 26, 2010 · 18 Comments

Time is such a funny thing… if you ask someone what he or she want the most, the answer is probably “time” (or “money”). But whereas money can be made and lost, time marches on. It offers us no do-overs, no second chances. Every second that passes is one fewer second we have. The days are long, but life is short.

Rest assured that in the groggy hours of the early morning, I am hurrying to leave the house, not pondering the philosophical underpinnings of this concept called time. I’ve realized, though, that between driving 1-1.5 hours and being in the office for 10+ hours a day, it’s hard to find enough time in 24 hours to do anything else. I love the weekends. But I’ve determined not to live FOR the weekends. Weekdays are busy with work and commute, but I’ve found ways to “squeeze” a little bit more time out of my waking hours. Here are some tips that works well for me:

1. Do something productive on your commute: I listen to public radio all the way – where I get my daily dose of updates about the economy, international affairs, business news. Before I started my day I had no idea who Manual Noriega is, and well, now I do. I am on my way to becoming a very well-informed member of society!

2. Chop up the ingredients ahead of time: On Sunday night, I try to take 15-20 minutes to chop up a lot of the veggies I will cook for the first half of the week. I chop onions, mushrooms, eggplants, sweet potatoes, etc. One of the biggest hassles to cooking is preparing the ingredients, but if I come home and already have a bowl of veggie stir fry ready to go, I can have dinner ready in 15 minutes.

3. Use the slow cooker: I’ve found that by tossing cubed chicken breast, potato chunks, mushrooms, onions, and chicken broth into the slow cooker, then let it cook on “Low” overnight, I will be greeted with a fragrant and substantial bowl of chicken soup in the morning. That’s my lunch and dinner for the day. If soup is not your thing, there are so many great recipes for slow cookers. Pick something you like, and cook with ease.

4. Plan out your outfit for the week: I lay out everything I wear for the week in the first shelf of my linen closet. Not sure what this says about me, but I have enough business professional / casual clothes to put together 5 outfits at once. (It probably says I should refrain from adding to my wardrobe, at least for a while).

5. Don’t sacrifice sleep! It’s tempting to squeeze more time by going to be later, but don’t do it. Getting 8 hours per night is very important to function at your best. (Some genetically-blessed people can get by, successfully, with 6 hours or less over the long term, but most people need 8 hours).

6. Do 1 happy thing for yourself per day: This is something I’ve been very adamant about – I take the time every day to do 1 thing that makes me happy. Most of the time, that something can be as simple as a nice phone chat with CB, Mom, or my aunt. Or I give myself a facial mask. Or I go to bed an hour early and catch up on my reading list (my current favorite is The Simpsons and Philosophy: The D’oh! of Homer). Even at the end of a long day, it’s important to just take time to do something nice for yourself.

What tips have worked for you?

image source: http://screensaver.qweas.com/

Moving vs. Not Moving: Where I Prize Life Over Money

Written by WellHeeled on April 21, 2010 · 22 Comments

Thank you everyone for your input on the dream apartment vs. shorter commute dilemma … the moving vs. not moving camps are surprisingly equal (or so it seemed to me), with many more people than I would’ve thought encouraging me to give staying in my dream apartment a try. I was also surprised to read that so many people commute 30-40 minutes each way as a matter of fact! I suppose I’ve been lucky as my longest commute before this job was under 10 miles (although that distance would ALSO take me 30 minutes in traffic).

The commute

I’ve been commuting for almost 2 weeks now, spending 1 hour and 10 minutes to 1 hour and 25 minutes round-trip, per day. It’s a lot of wear-and-tear on my old car, and I need to fill up my gas tank about once a week ($30-$35 per tank). This presents difficult choice, especially because moving is the financially prudent thing to do – if I move closer to work, I would probably save $100-$200 total a month (including gas & rent are factored in), and I would have more free time (conservatively speaking, an extra 2.5-3 hours a week).

After looking at some apartments closer to work…

But. After scoping out some potential apartments this weekend, I’ve realized that not only do I love my current apartment, I also truly love the area where I live. I get to work quite early (before 7 am), and I’m back home by 6 pm or 7 pm depending on when I leave and the traffic. So I am home early enough that I can squeeze in trips to the Trader Joe’s, head to a tango class or go on a Pinkberry run. I can still enjoy my neighborhood on the weekdays (although honestly speaking, most nights I stay in). On the weekends, CB and I just enjoy hanging around this neighborhood – catching an occasional burst of ocean breeze.

Bottom-line: I have a (1) reasonably-priced, gorgeous, and spacious apartment, (2) with a caring and responsive landlord who looks out for me, (3) in an area that I enjoy. Talk about a tough deal to give up!

My landlord & landlady must be mind-readers

Tonight, I hit traffic towards the last mile of the freeway – so I got home in 45 minutes instead of the 35 I was used to. I started thinking, well… maybe I should think about moving a bit more. Then what do you know. As soon as I pulled into the driveway, my landlord came over and offered to back my car into the garage (so it’s more convenient for me to pull out in the morning). A few minutes after I stepped into my apartment, my landlady knocked on my door with a plate of home-made chicken taquitos stuffed with juicy shredded chicken breast, freshly diced tomatoes, and caramelized onion. And a dipping sauce. And a side of refried beans. I wanted to take a picture of them, but by the time I thought of it they were all gone.

After I finished this delicious dinner, I thought… how can I leave this place?!

And so, I am making a choice that is not in the best interest of my finances, but that I think will be quite good for my quality of life, even with a long commute factored in. I’ll reevaluate as time goes on, but for now I think I’m staying put.

image source: thepickyapple.com

Bringing Lunch to Work

Written by WellHeeled on April 19, 2010 · 37 Comments

Personal finance experts often cite bringing your own lunch to work as one of the ways you can save big. It’s no surprise – at $5 to $10 per meal, eating out at the office every day can put a dent in a young professional’s budget. I haven’t made any specific goals with regards to bringing lunch to work yet, except, well, I should be doing that at least somewhat frequently. For the sake of both my budget and my waistline, bringing lunch to work is a smart way to go.

There are not many appetizing options around my work, so the good news is that I won’t be tempted by an In-N-Out or a good pizza joint right down the street. But I also don’t want to just eat lunch from home all the time – it’s fun to grab a bite outside with coworkers, and sometimes nothing can curb the appeal of a big Chipotle barbacoa burrito bowl (with extra corn salsa, of course). I’ve decided that 4-5 times of eating out at lunchtime a month is a reasonable amount for me, or $40 to $50 a month. Other days, I will bring my lunch.

Right now, my midday culinary choices aren’t the most adventurous – I’ve brought veggie curry & rice, chicken & potato soup, chicken & rice (see a pattern here?), and… chicken & mushrooms & rice. I need to get more easy-to-make but still delicious (and healthy) lunch ideas! I hope to slowly branch out into… more soups, and maybe a salad here or there. Every time I cook, I try to make enough food for at least 2 meals – both dinner for the night and lunch for the next day, or I’d set a pot of soup in the slow-cooker and have it for both meals the same day.

How much do you spend on lunch a month? And what do you bring?

image source: frugalmania.com

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Dream Apartment vs. Shorter Commute: What Would You Do?

Written by WellHeeled on April 13, 2010 · 71 Comments

Consider this apartment situation:

You are currently living in your dream apartment, with a wonderful landlord. Your rent includes covered parking, laundry, utilities, and wireless internet. You have a beautiful little backyard space to hold your dinner parties. You are paying a very fair market rate for this gem of a place. You never worry about anything to do with the apartment – all repairs are done same-day or in one-day. Basically, you’ve hit the apartment + landlord jackpot.

You receive a great job offer, however, in a city 30 miles away. If there were no traffic, it’d take you 30-35 minutes each way. At a minimum, the round trip commute would be an hour a day. If there were traffic or accidents, it could take over 2 hours, easily. Fortunately, you are going against traffic for most of the way, so your drive is usually very smooth. Still, your car insurance would increase quite significantly because your expected mileage per year would shoot through the roof. Your car will have more wear-and-tear. You will spend more on gas and possibly repairs.

Should you stay in your apartment or move?

You’ve always thought that you’d take a shorter commute, no questions asked. But now you’re not so sure. You can move about 15-20 miles closer to work, where apartments are a little cheaper (a studio can be had for around $800). Added in the utilities, you’ll probably be paying the same amount as you are currently paying or at most $50 cheaper. You cannot find a comparable studio for the same price you’re paying now, if you can find one at all. You will never find a landlord as great as the one you have now.

But if you move, you will have a much more predictable commute (and the peace of mind that comes with it), lower gas prices, lower insurance premiums, and less wear-and-tear on your car. You would love to stay in your current apartment. You would love to have a short commute. You cannot have both.

Dream apartment vs. shorter commute – which would you choose?

image credit: sfgate.com

FREE $10.40 Certificate to McCormick & Schmick’s

Written by WellHeeled on April 12, 2010 · 8 Comments

Does the April 15th tax filing deadline make you stressed? Or hungry?

If so, you’re in luck! McCormick & Schmick’s has generously offered to give one reader of Well Heeled Blog a $10.40 dining certificate and a McCormick & Schmick’s fish-shaped stress ball.

Even if you don’t win, you can still partake in restaurant’s tax day specials. On April 15, McCormick & Schmick’s locations nationwide will be featuring several $10.40 dinner specials in the bar – items like the ½-pound “Inflation” Burger and “Taxing” Fish Tacos. Every guest in the bar will receive a $10.40 gift certificate.

If you are a tax preparation professional, April 16 is your day: Any professional tax preparer who dines at McCormick & Schmick’s that day will receive a complimentary dessert with the purchase of an entrée at lunch or dinner. Professional tax preparers will also receive a $10.40 dining certificate in exchange for their business card.

See more details for the McCormick & Schmick’s Tax Relief Celebration.

How to enter: You can submit up to 3 entries total. Please leave a separate comment for each entry.

Tweet this give away (please be sure to include @wellheeledblog in the tweet so I can count it)
Write about this on Facebook or your blog, and include the link in the comment
Leave a comment in this post and tell us what’s the most frustrating thing about taxes

The deadline is Thursday, April 15 at 12 noon PST. The winner will be announced on Thursday, April 15 by 10 pm PST, and must contact me within 48 hours of winning to claim his or her prize. Thanks for entering, and good luck!

Best of Blogs Link Roundup: New Job Edition

Written by WellHeeled on April 11, 2010 · 7 Comments

This week will be my first week of work – very exciting. I’m sure I have much to learn. I am also in the process of booking some interesting freelance work. The extra money will surely come into handy as I try to go to Galapagos before I turn 80.

Here are some notable posts from the personal finance blogosphere:

Girl with the Red Balloon* is planning her wedding in… 30 days! I’m in awe.
I Pick Up Pennies asks whether she should get AAA coverage. To this I say an emphatic YES! AAA roadside assistance has saved me (and my old car) more than once.
No TV but still want to catch your favorite shows? You might be in luck. Forest of Frugal Zeitgeist* tells you where to watch TV on your computer. I don’t have a TV, so I watch everything via the internet.
Derek from Christian Common Cents* had a… ah.. less than auspicious start to his honeymoon. His emergency fund, though, saved the day. After you read it, you’ll never want to go without an emergency fund again.
If you’re job hunting, you will need to go on interviews. If you go on interviews, you’ll need to be amazing. Read Financial Samurai* for tips on how to master the art of the interview.
Simple Life in France* shares her experience on how she realized a comfortable living situation is important (hint: it involves two neighbors who yell at each other… for silence).
Budgets Are Sexy talks about all the reasons not to have a car payment. I thought I had an old car (1996 Honda), but J. Money drives a 1993 Caddy. Wow!
The need for speed can cost you. Latika of Personal Finance Journey* discusses the costs of speeding.

* denotes Yakezie Challenge members.

The Ugly Truth: Men, Guys, and Money

Written by WellHeeled on April 10, 2010 · 9 Comments

Who better to share with us the truth about men, guys and money than a man (or, er, guy) himself? This is a guest post by Eric, who maintains a personal finance blog, Narrow Bridge Adventures (RSS feed). He is a recent MBA and financial analyst.

Ugly truth The Ugly Truth: Men, Guys, and Money

Because this blog is read primarily by women, I thought it would be fun to give you all a fresh, manly point of view on how many of us guys look at money. There are already dozens of great blog posts out there on the difference between men and guys. While they all come from a different perspective and offer a unique opinion, nothing is more descriptive about the difference between men, women, and guys than this quote:

“A woman will see a river and marvel at its beauty. A man will see a river and try to build a dam in it. A guy will see a dam in a river and climb on top will all of his friends to see who can pee off the farthest.”

I would define a man as someone generally at least in forties, financially stable, is housebroken (puts the toilet seat down), has kids, and is generally reaching that boring point in life that leads into retirement and being old. Men are probably good companions and never forget birthdays or Valentine’s Day. They are an important part of the world, but this post is not really about men, it is about guys.

There are two types of guys. There is the messy with no real goals in life other than making it to level fourteen in whatever video game came out last month guy and there is the career/driven black leather furniture and sleek Armani suit guy. Most of us fall somewhere in the middle of those two extremes.

If you are dating the sloppy type, do not expect much as far as motivation to do a lot. This is likely not going to change for many, many years. In my part of the world, Colorado, many of these guys end up bumming in the mountains doing the minimum work possible to get by skiing as much as possible. They will likely suck you dry for money if you end up with one. The best example I can think of for this is the group of guys including Seth Rogen and Jonah Hill in the movie “Knocked Up.”

The other extreme is a vain guy concerned solely with image and money. They are going to work extremely hard, try to make a lot of money, and try to show it off. If you want to be the “independent woman,” this guy might not be a great fit. He is going to insist on paying for everything and frugal is not in his vocabulary. An example is Charlie Sheen’s character in the movie Wall Street.

The Ugly Truth: Men, Guys, and Money

You probably want someone somewhere in the middle. I would say that I am about 20% the sloppy guy, 80% the motivated guy. I work hard to do well, and I will spend on things that make me (and my girlfriend) happy. However, I enjoy a good couch day where my focus is Netflix and Guitar Hero.

So, as we wander in the long journey of love, think about what kind of guy you want and where he fits on the scale. Double down on the right man (or, guy?).

image source: (1) wikipedia.org, (2) moviehole.net

Journey of a Thousand Miles Begins with a Single Step

Written by WellHeeled on April 9, 2010 · 17 Comments

CB and I got our Galapagos Fund (or Account #1234567) set up. Joint accounts don’t appear to offer the option of nicknames. Though we couldn’t name it something fun like “Going to Galapagos,” “Swim with Turtles,” or “Date with Darwin,” a fund by any other name is just as money!

It truly is great motivation to have a specific “home” for each of our dollars designated toward Galapagos. The total amount of what we have to save, however, is quite daunting. This trip costs over $10,000 for the both of us in today’s dollars. Our savings won’t be earning an interest rate that matches inflation, so we will need to save even more because we’re losing a bit of real purchasing power every day as we save. (And we’d have to set aside money for things other than this trip – say, retirement!).

Assuming a 3% per-year increase in the price of travel to the Galapagos, we will need $11,000 by 2014.
A 5% increase means $11,500.
In 4 or 5 years, the Galapagos trip will likely cost $12,000-$13,000.

Right now, we have $500 in the fund, or less than 5% of our eventual goal.

There’s a popular saying: “a journey of a thousand miles begins with a single step.” Inspiring and true, to be sure, but I wonder if the poor soul staring down those thousand miles ever thought, “I’m going to 80 by the time I cross the finish line.”

New 2010 Financial Goals

Written by WellHeeled on April 6, 2010 · 19 Comments

You know you are a personal finance blogger when the prospect of making new retirement contributions makes you so excited you can’t stop looking over the 401K plan document.

Now that I have a new job, it’s time for revised objectives for 2010. My financial goals for 2010 are simple: I want to contribute the most I can to tax-advantaged vehicles. That means I will:

1. Max out 401K ($16,500):

I reach 401K eligibility in July, so that means I will have 6 months to contribute for 2010. That will be $2,750 per month. My total net income – including freelance earnings – will cover my expenses during that time. But I won’t have much money for anything else.

2. Max out Roth IRA ($5,000):

I currently have $2,000 for 2010 – another $3,000 and I’ll be done with this goal. I’ll concentrate on Roth IRA goal in April, May, and June so it will be taken care of by the time July comes around.

If I make all these goals, at the end of 2010 I will have over $50,000 in retirement savings. These are aggressive goals for me, but I need to take advantage of every chance I have to save for when I’m a cool old lady. In addition to the purely financial goals, I also want to do something nice for my parents. This means I will:

3. Send Mom & Dad on a weekend trip ($200-$300?):

One of my favorite presents for my parents is a night or two at a high-end hotel for weekend getaways. I put them up at the Mandalay Bay in Las Vegas (Christmas 2008) and the Omni Hotel in San Diego (Summer 2009). They would never spend that kind of money on themselves, so it makes me happy to be able to do something nice for them. Mom apparently still talks about the Vegas trip to my aunt and my family. Score in the Good Daughter category.

Now that I have a job, it’s something I can resume doing. Perhaps a trip to Santa Barbara is in order. There are so many nice bed-and-breakfasts in that city… let me know if you recommend any one in particular.

image source: searchenginepeople.com

Graduate School: (When) Should I Go?

Written by WellHeeled on April 5, 2010 · 29 Comments

Graduate school is a significant undertaking both in terms of time and money. During the last few months, I’ve felt some pressure from concerned family members about going to graduate school. I know they only want the best for me, but I’m glad I followed my gut instinct and pursued more work experience instead. A business school education has been a professional and personal goal of mine since graduating college, but right now is not the time for me to go. Bottom-line: I only get one chance at an MBA, so I wanted to do this right.

The answers to “Should I go to graduate school?” and “When should I go to graduate school?” depend on the individual. I know very successful people with no graduate (or even college) degrees. I know very successful MBAs who had only two years or three years of experience before they headed to business school (if you are a college student looking to get an MBA a few years after graduation, check out Harvard’s 2+2 program). But I knew going right now wasn’t the right decision for me. I wanted more experience before I go because I’d have more to contribute to and more I can gain from an MBA experience if I have a few more years of seasoning. From a financial standpoint, I’d like a few more years to bolster my savings so that I can minimize the loans I’d have to take out.

Graduate education, be it medical school, law school, business school, or other masters programs or Ph.D. programs, exacts a hefty price. Medical school takes four years and often costs $200,000+ in tuition and living costs. Law school is 3 years (full-time) and 4-5 years (part-time), and the costs cross into the multiple six-figure territory as well. Business school is shorter at 2 years, but the average total cost for full-time students range from $100,000 to $140,000 for the two year program.

Given the costs, it’s very important that before making such a big commitment, people understand what they are getting into, and what the purpose for such a commitment would be. Here are three helpful questions I’ve asked myself to determine if graduate school is right for me, right now:

What will you do with a graduate school degree?

You don’t need to map out your career from graduation to retirement, or list out every possible contingency, but it’s a very good idea to carefully consider what you can do with your graduate degree once you get it. The point of graduate school can be for personal enrichment or career advancement, although for most people it’s a combination of the two. But unless you have a substantial trust fund, you can’t make a career out of being a “professional student.”
Do you need a graduate degree? How will it help you achieve your goals? Some fields require a degree to enter – i.e. if you want to practice law, you need a J.D. If you want to become a pharmacist, you need a Doctor of Pharmacy degree. If you want to teach at the post-graduate level, you need a Ph.D. and published research. You do not need an MBA to do business, although an MBA can be particularly helpful for career changes.

When is the right time for you to go to graduate school?

Some students decide to head to graduate school right after college. Some decide to wait a few years or decades between college graduation and a J.D., an MBA, or an MD. If you go to graduate school right after college, you will still be in the “student mindset” and will be able to start your post-graduate career sooner (i.e. if you are studying to become a lawyer, a professor, a doctor, a pharmacist, an accountant, etc.).
If you go back to school after working, however, you have the chance to save for graduate school and gain valuable work experience. Business schools especially prefer work experience (average age of a business school student is 27 to 28 at entrance), although the quality of work experience and the candidate’s maturity matter more than the quantity of experience. Make your decision with all these factors in mind.

How will you pay for graduate school? Is the debt load sustainable?

Don’t think about graduate school without also consider how you will pay for it. Many “professional” schools (medical school, law school, business school) in the U.S. may not offer much in terms of grants (i.e. money you don’t have to pay back). The expectation is that you will be able to make enough after graduation to service your loans. (From my limited understanding, many Ph.D. programs offer tuition grants and living stipends for their students, so the financial outlay is more reasonable at these programs.)
You can get more money out of these places if you are a stellar candidate whom they want to attract (many schools have a full-tuition or half-tuition fellowships that are awarded to the top sliver of students), or if you seek out outside scholarships. You can also apply to be a teaching assistant. Many schools offer loan forgiveness programs for students who go into nonprofit or government work. If you are considering this line of work, be sure to ask about such programs.
If you go to school part-time, you will have your income during school. But it will take you longer to finish your degree. If you go full time, you will lose X years of income. Some schools may also discourage full-time students from seeking work during the school year.
Going to grad school will give you higher chances of getting the job of your dreams. For example, people in law enforcement will consider a masters in criminology to acquire administrative positions and get promoted quickly. You just have to find your passion.”

image source: insidesocal.com

This post was featured in Carnival of Personal Finance #252

Getting a New Job: Next Step of Career Confirmed

Written by WellHeeled on April 2, 2010 · 65 Comments

The job

So… I got a new job! This is going to be a great next step of my career: I’ll be working in a business development position with exposure to C-level executives. My team has a direct impact on the company’s top-line growth – very exciting, but also high-pressure. (By the way, I actually wanted to share the news yesterday. But it was April 1 and I didn’t want to be accused of pulling an April Fool’s prank!)

I began seriously interviewing in January 2010. From September to December 2009, there was very little movement on the jobs front. For the last few months, however, I felt a marked improvement in both the quality and quantity of job listings and invitations to interviews. Many job leads I received from people I knew, however this job I actually found via online. After three rounds of interviews (including one with the CEO) and a background check, I was extended an offer.

Salary negotiations

Once you get over the excitement of a new job offer, you move on to the realities of salary negotiations. My original base salary was lower than I had expected, so I negotiated a $2,000 increase. I wouldn’t say I did the best job negotiating, not by a long shot, but I did it. I tried to be confident, positive, and professional. I emphasized my experience and fit within the organization, and reiterated my interest in the position. Even though I would’ve loved a higher than $2,000 increase, I am proud that I negotiated. After all, negotiations aren’t about getting everything you want, especially in this market. But knowing when to push (and when not to) helped us secure a deal that both parties can respect and agree to. Given everything, I am very happy with the new job offer and excited about the position.

My new target compensation (base salary + bonus) is a double digit increase over my previous target compensation. [I'm taking between a 5% and 10% decrease in my base salary, but my target bonus as percent of salary has increase significantly]. Having such a big portion of my total compensation as bonus means that it’s a bit challenging to budget. The wisest course will be to live and save on my salary, then allocate the bonus when it comes.

Looking ahead

I decided to accept this new job because it’s a great opportunity to challenge myself and to step up my game, so to speak. People have gone on from this position to top-5 business schools or managerial positions within the company. I am open to different opportunities for growth, but right now I think it would be an excellent foundation for business school in 3 years. I am so happy and thankful that I found a great position amid almost 13% unemployment (that’s California for you). I’m excited that I’ll be:

Embarking on the next chapter of my career, with a great new job, where I will have the opportunity to make an impact within the organization, work with – and learn from – really smart people, and continue building my experience.
Making and saving money again, now that I’m in a hurry to make up for lost time, I’ll have some very aggressive savings goals listed here later. 2010′s #1 priority would be to save as much as I can in 401K and max out Roth IRA. I also want to give my parents a weekend trip – at a bed & breakfast in Santa Barbara, perhaps?
Giving back to worthwhile charities and organizations, because as important as saving is, I also want to cultivate a spirit of generosity in my life. I want to give to places that share my values and advocate causes close to my heart.

Thank you’s

Throughout this 6-month journey there were many people who have given their time, energy, and expertise to help me. I am deeply grateful to all of them.

One of the people whom I met via blog is Manisha Thakor – yes! the personal finance expert and published author has become one of my biggest mentors. She leads a hectic schedule with media, writing, and speaking engagements, but has always made time to provide insights and encouragement. I’m not quite sure where she finds the time, but I hope one day I can be to another young woman the mentor that Manisha is to me.

Many bloggers friends have been, in a word, amazing. Revanche and I commiserated quite a bit while we were both job-hunting. Her common sense advice and superb editing skills have helped me tremendously. And every time I ask for crossed fingers, she goes above and beyond and crosses all her appendages! Mapgirl and Cal Girl Finance gave me resume advice and job search tips. Kim’s Kitchen Sink, Dazed In Los Angeles and Budgets Are Sexy were my sounding boards on issues such as salary negotiation, career management, and thank you letters. Sam commented that things would look up in the first 6 months of this year – let’s just say that I’m glad he’s right.

There are so many of you that I still haven’t thanked by name, but I truly appreciated every comment, every email, every note (or tweet!) of support. You guys have stuck with me for a long time, and I’m glad that I have good news to share with you.

image source: topimages.blogspot.com

Money Attitudes In Relationship

Written by WellHeeled on April 1, 2010 · 17 Comments

This is a guest post by “Mia” for the My Honey, My Money series. Mia is a little concerned about the different money attitudes between her and her boyfriend. She shares her story and asks for your advice.

Hi there. My boyfriend and I don’t really have any finance-related conflicts in our relationship – not outwardly at least. We do, however, have very different ways of dealing with money, and moved in together about six months ago.

Living together, we share household expenses, and our current situation (he moved in to my place) has me fronting the money for rent and bills. I also cover groceries, since he hates grocery shopping and I love it. He covers most meals out, and special purchases (like concert tickets), and at the end of each month, we tally up what we each spent and whomever spent less pays the other person the difference (usually, he owes me about $700). This system works fine, and he is always willing to lend me funds throughout the month if for some reason I’m running short (if I’ve had unexpected large expenses, like plane flights or medical bills).

That’s not the “issue,” though, that’s just the background.

Like I said, we have VERY different ways of dealing with money, though our salaries are about the same. I save and budget; he just goes with the flow. I have about $12k total (spread out in checking, 401k, savings, and a CD). He has about $13k total (exclusively in checking; nothing in savings of any sort). He has a credit card (that he hasn’t used since he paid off the balance a few years ago); I have never had one, though I have established credit through my car and student loan payments. A couple of times a year, he mentions something like, “Oh, yeah, I should open up a savings account” but he never actually does it.

We are not married, we do not have a joint bank account, and we basically split everything down the middle – I am not responsible for his finances. At this point, I feel like what he does with his money is his business (as long as he’s meeting his half of the monthly bills and such, which he always does, because hello, all of his funds are in checking). Until it’s OUR money, it’s his prerogative and he can put his money wherever he wants.

I am, however, a little worried/concerned because of his lack of active interest in the area. When things DO move forward (marriage, large joint purchases, etc), am I going to have to be the money nag? I am now (since I’m fronting the money, I am usually the one to say “Hey, it’s that time again; let’s go over money stuff”), but when we move forward together, am I going to have to be the one bringing up finances all the time? When is it appropriate for me to ask him about his plans for retirement/other savings? Like I said, in the past, he’s said he “needs to do that,” but hasn’t actually done it. And again, right now, it’s not really my problem…except for the fact that I think about it every so often.

At what point in your relationship do you “need” to sit down and have the money talk? I feel like that point would be when we’re planning to combine our finances, and that for now, if I ask him if he’s going to open that savings account or start putting money away for retirement, I’m just being a nag. I don’t want to push it…since it’s something he says he knows he needs to do, I feel like I should just let him do it in his own time, but I can’t tell if I’m just being non-confrontational. When did YOU all discuss moneys with your honeys?