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Have you ever heard of a starter city?  Much like a starter house, it is not your dream city, but a city you can start out in before you can get to where you really want to be.

I am interested in the concept because I inadvertently picked a job in a starter city before moving to Los Angeles. City life has appealed to me for as long as I can remember, and my first taste of a big city (Chicago) left me exhilarated. After loving life in a major world city for six months on study abroad, I settled into my first job in a small city (about 130,000) in the Midwest. My reasons for doing so were primarily personal: driving distance to my family, reasonably close to the boyfriend, and I already had friends there from my internship. However, there were many positive financial side effects.

Benefits of my starter city

• Very low cost of living. For $575 you could get a nice one bedroom apartment. If you wanted roommates, you probably could get by on $300-$400 a month.  A lot of people my age rented 2 bedroom apartments by themselves and used the spare room as an office.  I can’t imagine having 2 bedrooms all to myself here!  Though the salaries are slightly lower, it certainly isn’t directly proportional to cost of living. I could live better there than I can here, even though my salary is higher here. This allowed me to pay of all of my private student loans, and boost up savings from about -$500 to almost $10k. Gas was cheaper, insurance was cheaper, and even the movie theaters were cheaper ($4.25 during certain hours!)
• My company was much smaller (though still very much a corporate environment), which was a benefit for me. There was a lot of opportunity for a young employee to jump in and get good assignments, and the competition was less stiff. I could have easily moved into management (eventually) and truly became a key member of my team and a top performer in just over a year and a half. I got a lot of great experience.
• The company had really good benefits in order to entice their young employees to stick around. They knew they were in a less desirable location. I had a full 5 more days of vacation at my last job and the bonuses were slightly more generous.
• Much less traffic and much closer to work. I could easily get by on one tank of gas a month if I didn’t go out of town.
• Less fashion/image conscious. It was much cheaper to be one of the best dressed in the office!
• Lower cost of living = lower salary, which makes it easier to qualify for certain tax benefits that are based on MAGI (Roth IRA, student loan interest). I’m in no danger of disqualifying myself for a Roth, but I may not be able to claim the student loan interest deduction this year.  Even though I have considerably less money to spend on fun stuff.
• Clean air. Well come on, I had to say it. I live in L.A.

Disadvantages of my starter city

• Some may argue against this, but there are reasons for it being cheap: no one wants to live there! The weather was bad (I had to scrape ice off my car window regularly. The culture was lacking, even though they tried. Some people argue that there was more nature around… but while it has some nice parks, there are no mountains, no lakes and certainly no oceans.  Despite air quality issues, there is much better nature/outdoors things here.  [This isn't true for all less expensive cities, just the particular one I was in.]
• Better for families than young people. Most people were married, even a good percentage of those who were my age. Besides going out to the bars, there wasn’t a lot of entertainment for 2osomethings (though some argue there is if you are creative about it).  I have nothing against bars and I had some good times at house parties or tailgating at the college games, but… there just wasn’t that many options.
• Since salary was a little lower, any 401k matching was also lower since it is percentage based. However, the difference is less than 1k each year.
• If my company went under, job prospects were slim.

My move to L.A. was also primarily for personal reasons, at least the timing and the location.  I always intended to move FROM my starter city to somewhere more to my liking (at least for awhile, who knows where I will settle).   I really should have stayed one more year to get the most out of it. My savings could have been increased further, and more importantly, I would have been able to be promoted into the next pay grade for my new job (I fell short on experience).

I’m quite obviously coming out behind financially here, though I’m not struggling. Rent is the biggest increase, but gas and insurance aren’t insignificant either. Still, there is much to be said for loving where you live, especially when you are young.  Personally, I love it here and while my former city was nice, it wasn’t for me.  Despite the financial benefits.  There are a ton of factors that go into a person’s choice of where they settle, and money often turns out to be a pretty small piece of the pie.

I received a notice on my door today saying that I had a $30 credit on my account with my apartment, and instead of $1425, I get to pay only $1395 this month! I assume this is from the application fee being credited towards my rent.

After receiving some comments on my budget that my rent was high for my income, I got curious about how “out of line” I was with my rent. Still, there isn’t a lot I can do about it, but I really didn’t think it was such a stretch to think a young professional could afford to live in a tiny apartment in a safe neighborhood.

First, don’t get me wrong here–I’m not trying to pretend my rent isn’t absurd. I still have sticker shock each month I write the check. I sit on my balcony in the weekend mornings enjoying coffee with T, and think to myself “Wow. I pay almost $50 each day for this!” Today a cute little humming bird flew up next to us like a tiny little helicopter, and it almost felt worth it. (We don’t have hummingbirds in my home state.) Almost.

My original idea when I was looking to move here was to pay $1000/mo, but the only places I could find in that range were in neighborhoods I would not feel comfortable in, as a scrawny 25 year old girl who still occasionally gets carded at R rated movies. I’m just not very tough, even with my pepper spray.   Where I live, my commute is super short, and in a city known for congestion, I’m thankful of that every day. Roommates would have been the only viable option, but I decided to pay for the luxury of living alone over finding a random on the internet, at least at first. I toured a couple places, and I could have saved maybe $100 or even $200 by living further from work in an even tinier apartment. It just didn’t seem worth it.

Anyway, so I made up a little poll over in the forums at Get Rich Slowly to hear what people who are at least a little interested in personal finance paid. I asked specifically for what percentage of gross income went to rent/mortgage. Here are the current results, though 50 respondents is hardly a statistically significant sample. (Note the flawed poll options… the second to last one should have said 40-50!)

• 0%: 5 people, 10%
• 1-10%: 8 people, 16%
• 10-15%: 7 people, 14%
• 15-20%: 11 people, 22%
• 20-25%: 12 people, 24%
• 25-30%: 3 people
• 30-40%: 1 person
• 30-50%: 3 people
• over 50%: No one (whew!)

Mine is right around 24% without including any bonuses, slightly less if I do. Which is high and it stinks, but it doesn’t seem to be so abnormal.  I recently moved from Iowa, where I was paying just 12% of my rent to a nicer and larger apartment (I have my old kitchen table in pieces under my bed). It is an adjustment, that is for sure! Still, I don’t mind cutting back on things like clothes and expensive meals in order to live here. As my salary increases, I don’t think I’ll feel the need to move into bigger and nicer places. Even if T were to live with me, we both don’t mind a small cozy place. I actually really like it–less to keep clean and less stuff I need to buy to fill it up.

I’m not sure if this is the city we will live in forever. There are a lot of great cities that just aren’t so darn expensive, and we kind of want to go abroad for awhile. For now though, it is a great place for me to be. Late this afternoon I drove 1 mile to the beach and went for a run next to the ocean (yes i know I could just run the mile, but I feel safer and happier running on the path by the water). The waves came crashing in, the sun was starting to dip, and I felt really lucky to live where I do. I may hate paying so much in rent, but I can’t say that I regret it.

I get paid tomorrow (yes, on Thursdays) and finally was able to view my paycheck online. Though I only am being paid for 40 hrs instead of 80 this period, they did process my signing bonus in the first check (yes!) so I finally have some money to work with. They got all my direct deposit stuff set up in time (nice work!). I have it split between three different accounts, checking, short term savings (insurance, travel, car) and a long term savings (e-fund, maybe house/condo fund one day). I still may have to transfer between these, but this should minimize that. Make savings automatic!

I’m still not ready to finalize a budget, as I’m not certain what my take home pay will be. I tried to figure out exactly how much I’ll be paying in taxes each month by taking total taxes paid divided by total gross pay in this check. I came up with about a 39% tax rate! Yikes, that can’t be right! Google tells me that taxes on bonuses, while calculated as normal income, are withheld at a different rate, up to 40%. Well, that makes more sense! Good to know.

Is it logical to just use 25%, my marginal tax rate? Then again, what about FICA, Social Security, etc? If I do that, I come up with about $1700 after 401k and medical or $1500 if I go all the way up to 20% in my 401k. It isn’t likely I can live off the $3000/month, at least not if I want to grow my cash savings. Though the way some people dream about buying a house, I dream about maxing out my 401k….

My 401k still isn’t ready for me to enroll. I hate when systems are not automated enough. My last job I could enroll in my 401k on the first day (through Fidelity). It has been a full week and CitiStreet still isn’t recognizing my user ID. When I called the number to ask if this was normal, I was told “Please listen carefully as options have recently changed.” Then, there was a single ring, then silence. More silence. I was never given any options! I hung up and tried again, only to have it happen again. I pressed all the numbers and was directed to an operator who could not help me unless I “went through the system and entered my PIN” (which I did!). He suggested waiting another week, or trying the number again. Lame.

I was going to go hang out with the boyfriend tonight, but I think I’ll cancel. He has a lot of school work, and I have needed to do laundry for at least a week. This will give me time to start working on yesterdays to-do list. First up, taxes!

I just completed my first week at my new job, and will get paid next week. Let me just stay, I can not wait!

Work, so far, is horribly boring. I know it will get better, but they haven’t exactly fit me into a program, so I’ve just been chillin’ and doing a LOT of online training. But I’m a hard worker, so it is frustrating to just be sitting here, when I know all my friends at my last job are working their butts off.

By the way, applying to graduate school is expensive. I was accepted to a pretty good school at my last job (usually ranked about 30 or so in my major), but I now have access to a degree from top ten university. They will accept 2 of the 3 classes I have taken, and are on a quarter system, so I will be done with my M.S. degree more quickly. It will be a lot of work, but a better education overall. It will also help my resume out, as my undergrad institution is relatively unknown. My current company will pay for pretty much everything, including books.

In order to apply to the new school, I have paid:
-$60 application fee
-$24 for 2 transcripts from my previous grad school
-$12 for 2 transcripts from my undergrad school

I have opted NOT to send transcripts from my study abroad university (too much of a hassle, probably only about $15 plus international mail) and not order official GRE scores ($20 or so). Still, it is easily $100 a school to apply!

They will eventually be reimbursed to me, as long as I remember to file for it once I’ve completed my first class. My fees for the previous school I applied for were also reimbursed (and the GRE fee), so I am fortunate. But had I gone to grad school right away, I’d be facing these costs as a poor college student. That just seems wrong, but there aren’t many ways around it.

This is one of many reasons I am really excited for my paycheck. Thank goodness for a healthy savings account!

I’m in the process of moving into my new apartment. Technically, I’ve been paying for rent since January 15th (they wouldn’t allow me to change my move in date), but I’m still getting set up.

In apartment buildings, you often don’t have a choice for your cable television and internet provider. My apartment is serviced by Time Warner, and that is my only choice for TV. I was offered free installation and $30/mo for digital cable and $30/mo for internet for a limited six month period. A cable modem is required, but they had a deal where you could get a “free” modem through rebates. There also is $100 cash back in rebates for new services.

So….. Wow. A lot of rebates involved! The rebates are offered through broadbandoffers.com, which a quick Google search turned up lots of negative reviews. Still, I’m going to file the rebates anyway, get delivery confirmation for a couple bucks, then cross my fingers that they will eventually send my $180 worth of checks. Oh, and “free” didn’t include shipping or CA state tax, so it wasn’t exactly free, but $20 for a cable modem is reasonable, I suppose.

I think that negative reviews are par for the course when it comes to rebates. If everything goes smoothly with your rebate, you aren’t likely to go online and write a happy review. But if something is screwed up, you may go write a bad one. I read a lot of negative reviews about the company I bought my laptop from, but I received the over $200 in rebates. It just took a long time. That isn’t to say that mail in rebates aren’t a pain in the butt. They are. But I’m optimistic. I was going to sign up for the service anyway, so if they want to give me $100 to do something I already planned on, then great.

To me, $60 seems reasonable and fair for internet and television. I’ve never had a problem getting fair and reasonable service… for the first six months or year. However, once the promos end, the same service jumps to about $100 a month, which seems high. Besides pulling the personal finance trick of asking for a lower rate, I probably will switch to cheaper internet and drop the cable to get the price down to about $45 a month. With cable, it would still be $80/month, which is pretty expensive to me. Maybe once my promo ends, I can look into options like DirectTV and DSL services, to see if they are viable options.

So, not having a job is expensive! Not only do I not have a paycheck showing up until February 7th (yikes, last paycheck was last Friday, and it wasn’t for the full amount), but I have more free time.

Free time in which to think about how better to utilize my new apartment…. My new apartment is smaller than my last, and things don’t quite fit the way I’d like. Some of my furniture is nice enough, but everything feels too crowded. Crowded, like I took a 600+ square foot apartment and moved it into a 500 square foot apartment. One hundred square feet is more than you would think Or, more than I would think. Everything just feels cluttered, and I don’t like it.
Really, why are flat screen TV’s still so darn expensive? My living room would look at least 3 times more put together if I had one, but it just isn’t worth the price.

The kitchen is teeny tiny (one drawer for the whole kitchen?), so my buffet that used to live in my old kitchen has been promoted to TV stand. Except it doesn’t match the rest of the nice dark wood in my living room. Is it important enough to change? How important is it for woods to match? Probably not incredibly important, though it probably would pull the room together a little more. And the (already small) kitchen table? Well, we are storing that under the bed for now.

My bedroom is a mishmash of cheap furniture, but it always was. I used to have a “red” theme going on, but it seems to have vanished with the curtains and duvet cover. Now it is sort of a blank slate. Do I want to do anything with this? I also don’t own a proper dresser or chest of drawers. It’s true. I keep about half my belongings in plastic drawers (hidden in closet!) and the other half in a cheap thing from Target, half bookshelf with some felt-type drawers. I am plotting a trip to IKEA and am dreaming of purchasing this chest of drawers, in no small part because of the little mirror on top. I’ll have to see it in person to see how sturdy it is.

Should someone who doesn’t have a job really go to Ikea??? Okay, I have a job. I just don’t start until Friday…

After a stressful week, I’m finally in Los Angeles for good! That’s right, I live here now! It is still sinking in that I can go outside without a coat (and hat and gloves!)

Actually, it could have been MUCH more stressful. My new company paid for movers to come in and pack up all my stuff. They pay to ship my car. They bought my plane ticket, and paid for a hotel. They are currently putting me up in an extended stay hotel and giving me $35 per diem for food. And paying for a rental car! So I really shouldn’t complain. My flight was delayed about two hours and I didn’t get much sleep, so yesterday was sort of awful. But now, things are looking good.

Unfortunately, I’ve been really loose with my money lately. I don’t know why. I need to stop! I will stop!

Random Expenses:

• $50 in miscellaneous supplies to clean my apartment for move out
• $150 in random pre-trip spending (book, suitecase, god knows what else at Target/Walmart!)
• $25 at a “going away” meal with a few friends.
• $10 at the airport for food and orange juice (was feeling sick)
• $6 for a latte and snack at Starbucks in the airport in Chicago. I later spilled pretty much the entire latte. What a waste!
• $500 security deposit for new apartment.

Upcoming expenses:

• Tipping the movers. I’m not sure how much but maybe $100 for the three to split. (Any suggestions??)
• Next months rent. I get to pay half priced next month, so this is about $700
• Two belated birthday presents for my sisters, about $50 each
• Random move in costs (replacing things that I didn’t bring with), probably less than $100 if I’m careful

Luckily, I have some upcoming income:

• 21 hours of pay for my old job’s leftover vacation
• $1000 money as part of a relocation package. I think this is tax assisted.
• $3000 signing bonus (not tax assisted)
• $30 refund from the cable company
• $100 security deposit refund from old apartment
• New and improved paycheck!

I had my last day at my old job yesterday. Mapgirl, a blog I read regularly, also recently switched jobs. She put together a series of posts on how to leave your job, financial and non-financial aspects. I had planned to do the same, so here are my tips from my last days on the job.

General

• Give appropriate notice. Two weeks is minimum, longer if you think you can. I told my boss about a month in advance, and we told the rest of the group about a week later. For your own sanity, don’t tell them TOO soon. I’ve been plotting my move for well over six months, but I didn’t want to end up on a “short timers” list, given crappy assignments and having my work affected by knowledge I was leaving. So I kept my mouth shut for quite some time.

• Consider timing. I chose to leave in mid-January for several reasons. First, I wanted to be reimbursed for my tuition from the semester ending in December. Second, we have holiday shutdown from December 23rd-January 1st, and I thought being paid for my Christmas break would be nice. Also, bonus are given in December, though I only would have had to stay through the end of the fiscal year to be eligible for it. It isn’t always worth waiting for things like this, but sometimes it is.

• Stay motivated up until the end. This is much easier said than done! While I met my commitments and did my best to transfer knowledge to my coworkers, I have to admit that I was a little less of an achiever in my last few days. It is hard to ignore that little voice in your head saying “Well, what are they going to do, fire me?”

Staying in Touch

• Be sure to get any contact information of people who you may later want as references. The boss I had for the majority of my time at the company recently transfered to a new location, and I emailed him and requested a personal email address, in case I need it in the future.
• Leave your contact information with anyone who might want it. I wrote a quick email to my group thanking them for making my time with my company be pleasurable, and included my gmail address at the end.
• Say your goodbyes! You likely will not see most of these people again

Benefits/Money

• Ensure that your last paycheck will find you, either through direct deposit or however else they do it.

• Ask about your vacation hours. I believe companies are required by law to pay them out to you, but that may vary state by state. My company said they would include them in my last paycheck. All 10 hours of it, ha. (I use up my vacation as soon as I earn it!) If that isn’t the case, then talk to your boss about the possibility of using most of it before you leave.

• Check on your 401k. If you have a really small balance, they can require you to take it out of the plan. In most cases, you can leave it there at least for awhile. I plan to roll mine over eventually, just not right away. You my have some funds that require a waiting period to avoid fees.

• Make sure you know what portion of your retirement is vested. I became fully vested after three years of service. Luckily, the count the start of that from the first date I did my internship. Even though I only have worked there full time 1.5 years, I got to keep the company match. It amounts to about $6000.

• Your medical plan will likely go through the end of the month. After that, you may need COBRA or other insurance if your new job doesn’t offer insurance on day one. Consider using your insurance, if you already haven’t. I was sure to order contacts (my company pays for $120 if you do a buy-up on the vision plan.) If you have a flex spending account, you also can use it, even if you haven’t contributed it yet. It may be a bit unethical to knowingly do this, but it is legal.

I’ve never left a full time job before. When I left my internships, it was a given that I’d be heading back to school, so there were no explanations needed. I felt a little guilty “abaondoning” my team, especially as we were kind of at a make or break stage of our program. However, my reasons were mostly personal, and I left on good terms.

It seems I can go months on a fairly tight budget, not desiring to spend a lot of money on anything really. I won’t go shopping, I won’t go out to eat, and I will build wealth fairly effectively.

January has not been one of those months. Part of it is because I’m moving out of my apartment (and city, state, and region!). I’ve bought several cleaning supplies that I probably could have got by without (or substituted with things I already own). I also bought a new large suitcase and an inexpensive exercise ball. Then I needed a new coffee mug, because mine ceased to be watertight and was spilling. Then a dinner with my friend, because I’m leaving. And some wine for him because he fixed my car speakers for free. And wine for myself, just because. And a magazine too, while I’m there. Oh, and I needed an oil change. And it’s been like that, one thing after another, the money just has felt like it is flowing out. And out, and out and out.

It has been, too. I have spent at least $300 in the last couple weeks on non-bill related items. Perhaps more. I’m a little afraid to tally it, though I have a handy pearbudget spreadsheet all set up… The thing is, I knew that I’d be spending more than I make this month due to paying double rent because I’m moving. And due to getting 1 weeks less pay, due to switching jobs. So since I knew that, it seemed like I might as well just buy every cleaning supply I thought I’d need… At least it should help me get my $100 deposit back!

Well, anyway, it’s time to tighten up ship again! I pledge to conciously think about each purchase I make for the rest of the month, and only buy things I really need!

In my industry, tuition reimbursement is pretty common. My current job has it, and my new job actually pays the tuition up front for you.

The problem I’ve run into is that Spring semester starts next week, and I am still finalizing my start date for my new job (most likely, February 1st). There is a class I’d really like to take this semester, but I don’t want to pay for it out of my own pocket. I’ve been trying to get an answer from my new job about whether they will pay the bill for me (even some prorated ammount), or if I have to take a semester off from my distance learning program.

The cost for one class would be rough $1600. I could take this out of savings. Why would I do this, when employers typically pay for this cost? Well, I might do it in hopes that I can work something out with my new manager and get them to reimburse it. I might do it because the class sounds interesting and isn’t offered often. I might do it so it won’t take me even longer to finish my degree program. Since I have been unable to get an answer from the new job, I have seriously been contemplating paying for it out of pocket.

When it comes down to it though, $1600 is just too much money for me to spend. Here’s to hoping they get me an answer soon!

In other news, I purhcased my rental insurance from Geico last night, with a 5k deductable. The reason I’m getting rental insurance, despite the fact that the value of the things in my apartment is probably less than the deductable, is the liability issues. The general rule (for me at least) is to insure yourself against thigns you can’t afford to have happen. If my apartment burned down, I could afford to replace my belongings. That is why I have an e-fund. The policy also has some sort of “temporary living” terms that would help me out. What I couldn’t afford is if my apartment burned down and it was blamed on me and I was sued for damages. I chose a high deductable, but also high “liability” coverage. It was only $163 for the year, and it was close to $300 for a more “reasonable” deductable of $1000 or $500.

I spent the week surrounding New Years Eve with a friend I rarely see (we met on a study abroad semester), our boyfriends, and another friend of hers. With the exception of my boyfriend (still a grad student), everyone had just recently entered the working world.

One night, they wanted to go to a “fancy” restaurant for dinner one night, and my boyfriend and I politely declined but offered them the use of the car to go. They graciously offered to treat us, so we agreed to come along. The bf and I politely ordered relatively lower priced items (still probably $40 each), and the others ordered appetizers and dessert (though they were kind enough to share). Dinner for the five of us was about $350, maybe more. The food was decent, but didn’t knock my socks off. The service was good, but not worth that kind of money to me at this point in my life.

Then there was the shopping. My jaw just about fell off when one girl stated that a $1000 handbag was “within the price range” she was looking for. I have no idea her salary (though I do think she lives with her parents, meaning, no rent, which helps), but it just seemed utterly unreasonable to pay that much for a handbag. Still, people do it. All the time. Just not many people that I know.

Sometimes it strikes me unfair when I see people my age spending on expensive items. In many cases, it is flat out unfair–their parents helped them through school and maybe even still subsidize their lifestyles, while mine didn’t. Very few people are wealthy by their own doing at age 24. Many people are comfortable (myself included), but having enough wealth to live the high life? Not me.

Really, it doesn’t matter if it is fair or not. Not one bit. All that matters is they are good people who don’t make me feel bad about being more careful with my money. I do my best not to make them feel bad that they do spend more money.

I think when I move to Los Angeles, I’m going to run into this feeling a lot more than I do here in the Midwest. I’m extremely down to earth, and the L.A. stereotype isn’t. I’m sure some won’t fit the stereotype, but I’ll surely meet a lot more people with piles of money than I know now. I’ll also working at a big name company where many people went to top schools. I went to state school. You’ve never heard of my school. I was smart enough for a better school, but the finances just wouldn’t have worked out. In some ways, it makes me proud of myself. I got to the same place as them, on my own, without a fancy school or lots of money. Even so, I wouldn’t have minded if my parents paid for a top notch education. It wouldn’t make me any less of a person.

Anyway,the girl who bought a Burberry towel (a towel? Why?) and a $250 watch (spur of the moment, out of spite!) suggests getting one coke at a pizza place and sharing the free refils. Too funny.

I took $1000 out of my high yeild savings account and directed it into my Roth IRA for 2008. Really, for true dollar cost averaging, I only contributed $585 above what I would normally contribute for a month. My Roth is fully invested in a 2050 target date retirement fund for now.

I could have funded the whole year with savings, but I don’t feel that I have the approrpriate cushion in my savings, especially with a cross country move coming up. Besides that, with markets being so shaky, I’m not sure I want to throw dollar cost averaging out the window this year. I wouldn’t be surprised if the market recovers nicely, but I also wouldn’t be surprised if it declines as well. I’m not an expert.

Since I’m leaving this job, I’m going to have the option of rolling my 401k (about 16k) into a regular IRA. Since my MAGI is less than $100k, I will also have the opportunity to convert it to a Roth IRA. I’ll have to look at whether or not I can take the tax hit in 2008, and the pro’s and cons of doing this.

Another thing I want to look at once I’m settled in Cali is moving a large chunk of my HYSA to a money market fund, specifically the tax exempt California one offered by Vanguard. My after tax return might be able to beat out my current high yeild savings accounts, especially since I’m not rate chasing. This article by The Finance Buff which suggests it may be so. It’ll make more of a difference if I itemize deductions (I usually take the standard), so I’ll have to do a little research on this. Or another option: TIPs? I have heard a lot about them, but my knowledge is limited. A high yield savings account is a great start, but I think I’m ready to see what else is out there and make sure I’m getting the best deal.

I do not come from a wealthy family. My parents do alright–a nurse and an electrician–but probably lean more towards working class than middle class. I’m from the Midwest, and a chunk of my relatives are from a small town (about 20,000 people) in a relatively unpopulated typical Midwestern state. We went back to visit for the hoidays this year, and apparently my dad had been talking about my new job with his relatives.

Aunt: So, the big move is coming up! You are going to be a California girl! Did they give you a large enough starting salary?
Me: Yeah, I think it should be enough. It is expensive there, but I’ll be okay.
Aunt: Oh yeah…. Well your dad was just saying that he didn’t think that they gave you enough. With the rent increase and all.
Me: :::awkward silence::: No, no… It should be enough. I mean, where I live now is really cheap, but I’ll be able to afford to live there.

In this blog, I have no problems stating how much I’m making. Yet this conversation with my aunt made me extremely uncomfortable for a couple reasons. First, it is someone I know in real life, and I’m not anonymous. I don’t particularly like sharing salary information with friends and family. However the biggest reason was the particular audience. My aunt is in her late thirties and is a substitute teacher. She has a 5 year old son which she raises, though the father is still somewhere in the picture. I don’t know how much money she might make in a given year, but I would venture it’s roughly 1/3 of my new salary. Maybe less.

When I got my first job, my dad shared the exact numbers with his family, probably only because he was so proud. After that, I asked him not to discuss my salary with his relatives, and I don’t think he gave exact numbers this time. He’s just a talker, and he’s proud of me. Besides, what she was saying is partially true. The salary increase just barely offsets the rent increase, and with taxes and other expenses, I’m probably coming out slightly behind. I don’t resent that. There is some price to pay for perfect weather and the great nature, being blocks from the ocean. There is a price to pay for not having to scrape ice off my windows and wear three layers of pants. But it isn’t as though I’ll be struggling.

I think each generation hopes that the next will be better off than them. At the same time, it might be difficult for them to see without some twinge of envy, even if they truly are proud.

I’m relocating to Los Angeles in January, and my company will pay for up to 2 weeks of “temporary housing” at a hotel while I find an apartment. I originally got a move in date for my new (expensive) apartment of January 15th, and I decided to push it to February 1st in order to save half a months rent. Unfortunately, the apartment complex did not like my plan. I wasn’t even able to negotiate an extra week! I’m really bummed out about this, because it is essentially $700 out of my pocket and into theirs. Perhaps I should have been more pushy and tried harder. I still don’t think they would have budged…. Completely lame!

I am feeling nervous about the ammout of money flowing OUT lately and I really wanted to save that $700….

I’m relocating from an inexpensive Midwestern city to Los Angeles. I have received two very similar job offers.

The first offer came in at $65k with a relocation package that included a $2000 tax assisted lump sum. I thought the offer was a little low, so I negotiated $67k and a $3k signing bonus. The pay includes up to 7% in 40k matching/contributions by the company and 12.5 days of vacation the first year. Bonuses were not explicitly mentioned, but I would imagine they do some kind of incentive bonus.

The second offer came in at $69k with a very similar relocation package (except $1000 non tax assisted lump sum rather than the $2000), a $3k signing bonus, and 10 days of vacation the first year. They also explicitly mentioned sick leave, at 8/hrs a month. They match up to 6% of 401k contributions, and have some sort of pension plan. I assume you have to work there some minimum amount of years to be vested in the pension. They mentioned bonuses when i was on-site, which this year was “ten days of pay.”

My current job will be paying about $58k as of next year. I get 15 days of vacation per a year, and sick leave is not really an issues. You are encouraged to make up any hours that you are sick, but it is not an absolute requirement. I get 6% in a 401k match. I also got a 9% bonus this year.

All things considered, my current job is really the best financial deal, taking the cost of living into consideration. The pay increase is nearly a 20% raise. However, my rent is going to MORE than double, and I will be paying an extra $9,600 a year in rent. That practically wipes out the entire raise! The vacation is better, the bonus is better, and I would most certainly get promoted to “Grade 2″ next year. I’m not sure how long it will take me at my next company.

However, the whole point of the job search is to relocate. So, which of the other two is the better offer?

Despite the extra relocation money from the first company (and the extra 2.5 days of vacation) the hard salary numbers will be what my future salary will be based off of. I think the second offer is better, though I’m going to miss that extra week of vacation. Is vacation negotiable? The second offer is only slightly better, but the job itself is more appealing, which really seals the deal.

My next thought is, should I negotiate the second offer? Am I worth more? I don’t want to come across as arrogant to the company–I’m not even two years out of school, and I didn’t go to a fancy big name school. But if I am worth more than what they offered, I don’t want to sell myself short. I don’t know. I think it is a fair offer. I liked the company a lot. But the boyfriend insists it doesn’t hurt to ask. Thoughts?

Here is my sketched out plan for 2008. I’m moving to an expensive city, but I took the difference of the salary and the rent increase, and I’m coming out a little ahead. Of course, there are other factors…. Anyway, savings are blue, if you can see the different colors.

This doesn’t include a signing bonus or any leftover relocation perks, but those will just go automatically into savings and other initial costs of starting over (apartment deposit, etc.)

I’m not sure if I really will only spend 200 on groceries and 100 on restaurants, but I’m sure going to make an effort. I also have to start paying my own car insurance and secure renters insurance. I have no idea what the cost for those will be, but I allowed 100/month. I have $200 of unbudgeted money monthly, and $100 for entertainment–I really spend very little on entertainment currently, so we’ll see.

Ah, I love planning. Or perhaps I’m really just procrastinating on finishing up my take home final for my graduate class.

I accepted a job for January 2008 back in early September. This may come as a surprise to anyone who noted that I was in Los Angeles last weekend interviewing for a (different) job.

To my credit, I did stop applying for jobs when I accepted my first offer. Company A just moved very quickly, while Company B moved very slowly. I sought advice of those in industry (an experienced mentor) and others who love me (parents) and was told that I should go on the second interview, and really, do what was best for me. If nothing else, I could use the weekend to find an apartment.

I have not received the formal offer from Company B, but notification that HR is putting something together. I anticipate it will be similar to the other offer–at least as good, maybe slightly better.

Here is the thing: I want to work for Company B significantly more. I met a lot of great people and liked the atmosphere a lot more. However, I have committed to Company A with a start date of late January.

I do know it is unethical to back out of my first offer, but I think I will do it anyway. I will allow myself this mistake in my career, and will never do anything like this again. I will keep myself out of this position. It is a bad place to be in. At the same time, I have to do what is truly best for me. If the company lost a contract tomorrow, they wouldn’t feel bad about calling me up and saying “Never mind, you aren’t hired”. Still. It is not something I am proud of. I just want to say, I’m not asking advice over whether or not to do this, just HOW to handle it.

I’m drafting a letter of “resignation” (or rather, “renege-ation”). For the sake of getting the information to them as quickly as possible I probably will man up (woman-up?) and call them, as unpleasant as that may be. Ok, let’s be realistic–I probably will send them an email? I will also send a formal letter (I think). I don’t know how to handle this situation, because it is not the types of situations I usually get myself in.

Please offer any suggestions on how to handle this. Here is my first draft:

With great apologies and regret, it is necessary to inform you that I will not be starting employment with Company A this January 2008. I understand that backing out of my commitment is disrespectful to you, and I have wasted the time of you and your company. I am truly sorry for this and will not make this mistake again with any company.

I do not wish to start my career with Company A only to leave for something that is better fit after a short period of time, and waste more of your time invested in me as an employee. With this in mind that I have chosen a different path. My choice was not for monetary reasons, but simply I felt that the job was a better fit for me. Of course, I stopped applying for jobs at the time of my acceptance, however the process moved very slowly with the second company and I’m only now finalizing my decision. I understand that accepting an offer that I was not entirely confident in was a poor choice on my part. I should have, at the very least, requested more time to consider all my options, before making a commitment that I could not keep. Again, I sincerely apologize for the inconvenience I have caused for you.

Thank you for the time you have already spent on me as a candidate and for your gracious offer of employment. I can not apologize enough for backing out of my commitment.

Sincerely,
Me

I was hoping to wait until 2008 to talk about my goals and plans for 2008. However, I’m a planner to the extreme and I can’t help myself from starting now.

There are a lot of unknowns in the first part of next year. I’m moving to a new city with expensive rent. While I have one job offer, I’m waiting on the one that I want more (tomorrow? Very soon!) so I’m not sure what my salary will be. Still, no matter what, there are some goals I can set right away, and adjust as needed.

First, I want to max out my Roth IRA again. That is about $415 a month of post tax money to be directed into savings immediately. In my first year and a half of working, I’ve already saved about $20k in retirement accounts. As my salary increases, I’ll be able to contribute more each year. I think I’m on track to have a comfortable retirement. I have a vague idea of retiring early, but still am not ready to make a plan for that goal.

In that same vein, I want to contribute at least 10% to my 401k. This is pretty painless and will get me a full match of (probably) 6% total from my company. Based on my first job offer, that will mean I’ll save about $15000 in 2008 for retirement. If I feel that I can afford it, this will be increased, with a stretch goal of 15% towards 401k.

I also want to pay a little extra to my student loan account. My goal is only going to be $1000 extra this year. I’m required to pay about $1500. In 2007 my goal was $4000 total. This is really cheap money so paying it off is more for the mental benefits. That means my month payment will increase to $215, though I’ll likely pay it in chunks rather than automatically every month. If any of my goals are faltering, this will be the first to go, as it is the least cost effective.

Next, I want to continue (but decrease) to auto-contributions to my emergency fund, and really turn it into an emergency fund. I have a general purpose high yield savings account which is my efund, but I don’t treat it as an efund. It’s just a savings account with a continually increasing balance. I think contributing $50/week to this account will be sufficient. I pretty much grew it to 10k from scratch this year, so it is a big decrease. I’m excited to have a base fund so I can focus on other goals.

Now… the “boring” goals are out of the way!

For my fun goals, I want to add $25/week to my “travel” fund. If I have extra money, I’ll increase this amount, but it is a start. I have a travel fund earmarked, but it has had really stagnant growth. I also want to start saving up for a newer car. My car has about 75k miles on it and will last another couple years… but I need to start building up some money to purchase my next one. I want to pay for my next car in cash, and I will be spending at least 10k, maybe more. If my budget works out, I’d like to save $100/week for this, giving me just over 5k by the end of the year.

So that is it! These goals will be tweaked once I’m settled into my new apartment, new city, and new job.

In unrelated news, they are announcing who replaces my current manager at work today. I hope they promote from within the group and that Bryan is it. I think that he would have the job if he wanted it, but I’m not sure he is interested in management.

This was not only the most satisfying thing to put on my to do list, but also the most satisfying to check off!

Actually, I really like my job. They don’t discriminate based on age and experience–if you are good, you will be given good tasks and responsibility. In my short time there (1.5 years), I was able to be recognized as a “high performer” and given a key role on my team. Which is really great–you don’t have people forcing you to “pay your dues”. If you can do the task, your dues are considered paid and you are thrown in there. There are several young employees (under 30) that have really big leadership roles in our group, and I don’t think I am too far behind. Besides that, I have gotten to work on challenging and rewarding projects and like my coworkers.

I’m resigning because I’m relocating to Los Angeles (for personal reasons) and the branch in that area really doesn’t do any interesting work. I was very nervous about putting in my notice, until my manager informed us all that he had been promoted and would be moving to a branch in Texas. That made it easier for me. I set up a meeting with my manager, which I titled “Short Discussion”, which I assume made it obvious what it was about. I don’t usually schedule meetings with my manager, and a vague title usually means the employee is quitting. He said he knew when he got the invite.

So, I resigned, effective January 11th. I gave them about a month’s notice, which maybe is more than “standard” but I felt it was appropriate, considering we get a week and a half off for Christmas.

Today my manager presented me with the idea of working remotely from Los Angeles, with a salary differential for cost of living figured in. I was really surprised by the idea, and felt it showed they really appreciate my work. Ultimately, it probably won’t work out. I don’t think I’d do well working in isolation. At this point in my career it is best for me to be surrounded by really brilliant people and learn as much as possible from them. Not to mention, how would I meet new people if I worked alone? I expressed my concerns, and really, I don’t think it would be best for the company either. He was fine with that, but said he just had to discuss it with me.

Tomorrow, we can tell the rest of my team.

I spoke recently about how I got a job offer in California, making roughly 11k/yr more than I make in the Midwest. My company here pays pretty well for new graduates because there is a high demand for them. Even though they are located in a low cost of living area, starting salaries are not much lower than in high cost of living areas. Anyway, this raise will net me an extra $916 a month, which we will call $650 after taxes (optimistically?).

I’ve been doing a little math to see how this move will affect me. The biggest increase in monthly spending will undoubtedly be rent. I currently pay $575 for a small but relatively nice one bedroom apartment. I’m hoping to find something for $1000 (or less, but that seems unlikely) in California, probably equally small and not as nice. I’m secretly hoping that I’ll have a roommate (my boyfriend) move in after several months, but this isn’t something that has been discussed enough to count on, so I’m running the numbers without factoring that in. That is $425 per a month extra in expenses! That destroys a huge chunk of my “raise”, making it an increase of a puny 2.7k/yr!

I will be able to take public transportation, but I doubt that’ll save me any money since I currently live a 4 minute drive from my company and don’t drive often. I suppose, one nice thing about a higher salary is that the company match of my 401k will be of a larger amount. If I want to go home, it’ll cost me $300 for a plane ticket rather than $80 for a couple tanks of gas.

Luckily, the initial costs of relocating won’t be too much of a burden on me. Not only do they give me $2000 for miscellaneous moving costs, they will pack and move my stuff, reimburse me for mileage and lodging and meals for the drive out there. With all of that, there still might be a bit of a hit to my savings, but not nearly as drastic as it could be.

I’m not making this move for financial reasons. It is for personal reasons, and for a desire to live in a big city, the dream of California living. But the impact to my finances is still there, and I hope that it won’t slow my progress too far.

This is a money making trick that doesn’t work except in a very special circumstance–negotiating a job offer.

I’m in the process of relocating to California, primarily for personal reasons. I had an interview last week and received the official offer today. My current salary in a low cost of living midwestern city is about 56k. I was offered 65k to move to California (plus relocation costs!). I was excited to get the offer, but I immediately asked if that was negotiable. I had anticipated an offer in the 70-75k range. (Some random cost of living calculator states: To maintain the same standard of living, your salary of $56,000 in XXXX should increase to $103,122 in XXXXX, California. I think that is a bit high, and certainly less than I would expect them to offer me, but at least, a point of reference.)

The HR rep seemed surprised (which surprised me!), and said something like “Well, it is a 15% percent increase, but if you have justification, I can talk to the hiring manager.”

Luckily, I wasn’t negotiating for the sake of negotiating–I had my reasons ready to go:

• The position is typically entry level, I have 1.5 years of directly related experience and am on the verge of a raise/promotion at the end of the year
• I am 1/3 of the way done with my Masters Degree
• I already have my security clearance (something that costs them several thousand to get!)
• The cost of living is significantly different

The HR lady then called the hiring manager, and then called me back about 10 minutes later. She only could offer me an increase of salary to 67k, but they would throw in a 3k signing bonus. She reminded me that performance reviews happen early in the year, and that there would be tuition reimbursement.

The offer is much more attractive. I got enough money to fully fund a 2008 Roth IRA, just by listing a few reasons.

I have a phone interview tomorrow with another company for a different type of position. I think that the offer I already have seems like a more appealing job, but I want to see what this other position really entails.

This is the first time I’ve negotiated salary, and I’m quite proud of myself!