Budget Freak

The company I’ve been working for as a contractor for the past 10 months, opened up a full time job for my position. After a few months of waiting for the job to post, a round of interviews, and another 2 weeks for them to make a decision, they offered me the job. In the mean time, I told my current employer about the new job, and they made me a counter off with a pretty big promotion and a nice raise. It was a fantastic position I’d never been in before.

The job I had before was with a small company (~20 employees), and was still a pretty young consulting company. The new offer came from one of the largest businesses in the world (~100,000 employees), a major oil company. The consulting company offered me a project manager role, a nice promotion with lots more responsibility, where as the oil company offered me a data analyst position, which is basically what I’ve been doing for the last year. The salaries were comparable, so how was I going to decide??

I decided to go with the big oil company. Ultimately, it came down to the benefits, and potential career growth.

The project manager role would have been a fantastic promotion, but there wouldn’t have been much room to grow after that. At the oil company, I may have less responsibility at first, but two years down the line, my options are almost limitless. They have opportunities on 6 different continents, in just every aspect of business. I know people who work there now that have taken 2-3 year assignments in remote parts of Alaska, the middle east, and all over Europe. I’m working in the Environmental department now, but I could easily transfer to a process control group, health and safety, or any number of different departments.

As for benefits, I had to make a spreadsheet listing all the benefits and do a side by side comparison. The big oil company had a huge advantage when you looked at the standard medical and retirement benefits. They matched 7% of the 401k contributions (vs. 3%), they’re about $100 cheaper per month for health and dental insurance, and, amazingly, they have a pension plan. They use a strange formula to calculate contributions, but for my salary and age, I would be getting over $4,000 per year, free. Of course I couldn’t touch it for 40 years, and it doesn’t vest for 5 years, but thinking long term, that’s a huge advantage.

There were also some fringe benefits I had to examine. For example, as a consultant, I’d get to work from home 3-4 days per week. That would save me about $200 per month on gas and car expenses. The consulting company also pays for my telephone and internet connection, another $70 or so a month. On the other side, the oil company has a 9/80 work schedule, which means I’d work 80 hours every 9 days, which in other words, I’d have every other Friday off. They’re also flexible with the day off, so if you time them around holidays, you can easily get 4 day weekends pretty routinely. The other benefit of the 9/80 schedule, is that my girlfriend works a 4/10 schedule, so she gets every Friday off, and I would definitely spend more time with her.

The biggest factor, which trumps everything above, is that the oil company will pay for my MBA. Specifically, they will pay 90% of tuition, books, fees, etc, with no maximum. That means if I decide to go to either of my top choices, Pepperdine ($60,000) or UCLA ($80,000), I would only have to pay $6,000 or $8,000. That’s a huge advantage in my book.

So there you have it. I gave both opportunities a chance, but when I calculated everything out, the choice became pretty obvious. Hopefully this will give other people an idea of what things to look for when they’re deciding between jobs. I have another week and a half at my old job, and then I’ll start at the big oil company the first week of July. Wish me luck! Our online pharmacy is the perfect resource for people to get their drugs without any hassles or awkwardness. buy cialis We work hard to make sure you save money every time you shop with us. buy levitrabuy soma At our online store, you pay less and get more. buy viagra

Despite spending more than I earned in April, I still managed to grow my net worth ever so slightly. This was due, in large part, to a great month in the stock market. My retirement accounts were up over 15% for the month (including contributions to my 401(k)). That in turn, gave me a 1% overall increase in Assets. I had my first two 0% balance transfer payments due, as well as another big car payment, so Liabilities are down 1% for the month. All told, net worth was up 3% for the month. A far cry from last month’s 14% growth, but still moving in the right direction. I have a feeling May will be a much better month.

Since the beginning of this year, I’ve been keeping track of my net worth. For those new to the game, net worth is basically the total of all your assets (checking and savings accounts, investments, real estate, etc), minus all your liabilities (car loans, credit cards, mortgages, etc). To see how to build your own net worth spreadsheet, check The Simple Dollar’s How to Calculate Your Net Worth. While this calculation is not the be-all-end-all, it’s a good progress indicator.

For the first quarter of this year, my net worth is up 33.8%. I enjoyed 3 positive growth months of 12%, 6%, and 14%. Most importantly, my retirement assets almost doubled, growing 82% in 3 months. Funds went from $6,800 in December 31st, to now $12,500 as of March 31st. This was mostly due to increased contributions to my 401(k), a $4,000 contribution to my ROTH IRA, and a little help from the market.

All told, I’m moving in the right direction. I’m spending less than I earn, and stocking as much as I can towards retirement. I’m still working on getting my spending down, but if I can continue these double digit growth months, I’ll be happy.

I participated in my first carnival this week! For those not familiar, a blog carnival is a showcase of the week’s most interesting articles on a particular topic. Articles can be submitted to the carnival host, and then they assemble and highlight the posts as they see fit. This particular carnival is all about personal finance.

Tired But Happy host this week’s Carnival Of Personal Finance. Among my favorites this week:

Debt Consolidation News submitted the Young Adult’s Guide To Personal Finance, which has 65 tips and advice for the 20 something crowd. [Edit 1/14/08: Broken Links]

My Pocket Change posted an article about how the Young Professional should save for retirement. The numbers are a little scary (40 years from now, to live off $50,000 a year in today’s dollars, you’ll need to save $4.41 Million).

My post about Saving Money by Driving Slower also made the list.

Go check out the full list for yourself.

You’re allowed to make contributions to your IRA account for the previous year up until the tax deadline. So, for this year, you can make contributions to your 2006 IRA up until April 17th. I, in fact did this very thing a few weeks ago.

However, I was reading Blueprint yesterday, and he said you must make your contribution before you file your taxes. This could be a problem for me since I filed my taxes in February, and opened up my account in March.

I read a few of the comments, and No Credit Needed and The Happy Capitalist seemed to think it didn’t matter if you had filed before you made the contribution. I talked to my accounting teacher last night (who is a CPA), and she said it’s probably OK, but not the best way to do it. She said, in other words, “You’ll probably get away with it.” Not exactly reassuring.

Does anybody know for sure out there? I could understand if this was a traditional IRA account and I was deducting the contributions, but I opened a ROTH IRA with after tax dollars, so there is no deduction and, thus, nothing to report to the IRS. Right???

After putting it off for so long, I finally took the plunge and opened a ROTH IRA. This is in addition to my 401(k) through work (contributing 12% of my pre-tax salary), and a regular IRA thats holding rolled over 401(k) plans from previous employers. I’d been researching ROTH IRA’s for awhile now, and finally, after some helpful advice, I decided not to wait any longer. My biggest concern was that the money would be locked up until I retire, some 35 years from now. I would rather have the money in a savings account where I could access it quickly. Turns out, you can withdraw your contributions anytime without penalty. It’s only the profits you can’t touch (and actually, you can withdraw them under certain circumstances, which I won’t go into here. Go read The Motley Fool’s All About IRA’s). I don’t know how I missed that part during my research, but that solves the emergency access problem.

I decided to go with Vanguard after reading plenty of good things about them on other personal finance blogs. Pretty much any link over on the right will say good things about them. I opened the account online, and the process couldn’t have been easier. They walk you through 6 or so steps from entering personal information, banking information, and selecting funds. The whole process took about 20 minutes once I knew what funds I wanted to invest in, and I linked to my savings account so the money would be transferred quickly.

And speaking of funds, I chose their Target Retirement 2045 mutual fund. The target retirement funds base their asset allocations on when you plan to retire (2045 in my case), and then automatically adjust their holdings as that date nears. Right now, since we’re still 40 years off, the fund is around 90% stocks and 10% bonds. It’s designed for large growth, but with a higher risk. The retirement funds are great, in that I can just keep pumping money into them and not worry about allocation. They handle all the work. It’s the perfect lazy man’s fund.

Thanks to the tax laws, I was able to contribute this money towards last year’s limits. I put in the maximum yearly amount of $4,000. That means I can still contribute another $4,000 for 2007. It’s a little scary to throw a big chunk of money like that into something that I won’t be able to access for another 35 years, but consider this:

If I invest $4,000 today, and the fund earns a modest 8% annual interest over the next 35 years, that initial investment will be worth over $59,000. More realistically it’ll earn somewhere around 10%, which in 35 years will be worth $112,000.

That’s right. The power of compound interest. So yes, I’m giving up my money now, but when that $4,000 is worth $100,000 in 35 years, it doesn’t sound so bad.