Mapgirl’s Fiscal Challenge

BostonGal says, “Seeing how many people are on the Millionaire in the Making list due in part to secure state, government, or military pension plans is becoming a bit of a downer for me. Should I try to start a second career as a state or government employee? Just so I can get guaranteed income and heath benefits in retirement?”

Some of her commenters take issue saying that benefits are not guaranteed and changeable with the economic tides especially at the state level. I agree. It’s a risk and it has a lot of pros and cons. Living in DC, I can see that every day. The CNN/Money series has generally profiled federal government employees and if you ask me, a lot of them have been active military and I’m not sure combat pay is a great way to build your wealth up.

Check Office of Personnel Management if you really have questions. OPM is your best resource for general questions or else the HR office of your potential agency.

In terms of benefits as a full-time employee, you get:

FEGLI - Group Life Insurance: But you have to sign up for it when you are hired. No changing your mind later because you can’t sign up. OPM only runs a sign up period every few years, ‘few’ meaning ‘decades’. You can check their site for the open enrollment dates, they are very, very far apart. When you’re young, you don’t think you need it, so you think you’re saving money. Then you turn 40, have two kids and you want insurance and now you have to go get it on your own. Something to think about if you enter a government career at 25.

FERS-Federal Employees Retirement System: A three-part system consisting of
1. Social Security - Yes, they really think they’re going to pay it in 20 years.
2. Basic Benefits/Annuity - Pension benefit, an annuity payment of a portion of your salary.
3. Thrift Savings Plan - Retirement investments, which on the whole, are very generic and probably don’t chase a lot of risk for high reward. But it’s a little hard to tell from the available literature. The other thing is that the maximum match is 5% of your salary, for a total of 10%. The other good thing is that you vest in 2 years and they automatically give you 1% even if you don’t save anything.

Health Insurance: Health insurance, for your whole family, dependent children, adopted/fostered children.

I’m sure all that sounds great, but you have to work for the government for 30 years unless you are in one of several categories, all of which have stipulations.

1. Military or Law Enforcement: 25 years of service or Age 50 and 20 years of service.
2. Voluntary Early Retirement: Special retirement packages offered agency by agency, dependent on a matrix of age and length of service, determined at the time the packages are offered which could be few and far between.
3. Part-Time Employees
4. Members of Congress/Congressional Employees
5. Military Reserve Technicians

Frankly, I don’t like the idea of working for 30 years for anybody. At that point, I might as well be a company man for some large corporation or something crazy like that.

The other thing is that BostonGal might not like her pay grade and step. I know she’s in IT but some federal IT jobs in the DC area don’t pay well and frankly, they can truly stink. (I knew a sysadmin who left our company for two weeks and came right back because his FAA IT job wasn’t what it was billed to be.) You’re better off being a contractor if you ask me, but the government does pay for a lot of training, so you might be able to move your grade up a lot faster with an internal promotion, new degree, or an agency change.

At any rate, if you want to work for the government, check out USAJobs.com. It’s OPM’s website for recruiting. It works like Monster.com where you can set up agents and bulletins for new listings. That’s key since there are closing dates on postings which are very important. However, several agencies subcontract out to AVUE, like DOJ, USDA Forest Service, and TSA. (Get used to acronyms, that’s what government life is all about!)

There is much more to consider but these are some basics. Things like COLA, ‘danger pay’, locality pay, etc are more esoteric but can really make a huge difference in your salary comparisons. (For instance DC area pay is 30+% higher than published tables.)

I’m super excited. Even though I have to spend a lot of money on gas for my new engagement, I am excited because this office is insanely casual. There’s some manual work going on there and some of the staff wears jeans and *ugh* flip-flops. I hate flip-flops with a passion, but that is neither here nor there. The point is that the other consultants on my team tolerate jeans, sneakers and polo shirts.

I have noticed that most of my management chain are South Asian and tend to wear more formal attire, without going to a full-on suit. That sends me a signal, while it’s nice to be casual, don’t go TOO far.

While I don’t plan on wearing sneakers and jeans daily through the summer. It’s nice to know that I can and no one will get mad. I still plan on wearing a dress shirt and khakis Monday through Thursday, and jeans on Friday with dressy shoes. I have never felt that it was ok to wear sneakers on-site.

I’m so happy about all this. I was so fretful earlier when I first got this consulting job. The first client site was so formal and I felt a lot of pressure to upgrade my wardrobe and buy some suits. But now I don’t need them until I return to a formal client site. I can dry clean my suits and put them into storage till October. If I’m lucky, this gig will last a while and I won’t have to spend too much money. (Though I’m getting fat enough to warrant some new khakis again. Sigh. Must diet to avoid spending money.)

First off, if you are not allowed to share your salary. DON’T. It’s usually grounds for getting fired so check your employee handbook before you do it.

After reading Jim’s story on salary sharing, and the accompanying NY Times article, I’ll give you a Marxist economic analysis of why you should share your salary. (I’m joking about the Marxist part. I read Das Kapital in college with a prominent Marxist scholar and it cracks me up that he makes a ton of money as a socialist.)

The main thing in a free market economy is the value of information. It’s possible to have any kind of arbitrage simply because of a gap in information where the buyer has no knowledge of the seller’s cost.

In the case of salary, it’s a little different, but still the same. You are the seller of labor (a Marxist view of the world) and the buyer of labor is your employer. However, you are in a marketplace of labor providers (other job candidates) and you need to differentiate your labor on the basis of quality to command a better price. But you also have to price yourself within a reasonable range. Tools like Salary.com, salary surveys, published annual ranges, etc will help you set the range, the best way is honestly to talk to your peers in the field about what they make.

Like Jim, I work in IT consulting with the Federal government. (Of course I do. I live in DC!) I nearly kicked myself when I found out I should have asked my company for $100K. But honestly, I don’t think I can command that price. My friend who was advocating that kind of money could justify his asking price with the kind of skills he possesses. I don’t have that same skill set so I lowballed myself slightly, but not embarrassingly. It would have helped me set a better price had I known my friend was applying to the same company I was and discussed our strategies for our starting salary figures. I might have squeezed out another $5K from it, but I think I did just fine.

More than anything, knowing your current market value is the key. Sure, it’s good to know what the company is willing to pay. But you really have to know what you are worth as an individual provider of labor. If you are worth $50K and the company is only willing to pay $45K, then find another employer because there is someone out there who is willing to value you appropriately. I learned this the hard way while working technical support. Support jobs are bottom of the barrel and full of stress. But some companies pay better than others and are willing to promote people out of support work. I had to have a client toss a reality brickbat at my head and tell me that my skills were worth $20K-35K more than I was earning in support. And he was willing to pay me that!!!

The Man keeps us down by obscuring salary information. We’re usually not allowed to know what our peers make in the same job function. They hide things with unpublished pay grades. (Private companies around DC love ‘pay grades’. The government uses them and it seems like it’s fair to have grades till you find out that you don’t know what ranges they represent in the private sector because they are in no way correlated to the government’s published GSA pay grade schedules.) You have to guess if your grade is a managerial one and if you’re going to get a manager’s bonus or a regular employee bonus. (In my case, 10% vs $1500. Uh, that’s a huge difference at a $50K salary.) Shop job postings to see what places are willing to pay for jobs like yours or the jobs you want to have. Frequently there are ranges added to ads to entice candidates or give them a realistic view of what the employer will pay. Use it to your advantage.

I’m not a big advocate of having poor manners. Obviously be judicious in your sharing of a salary and whom you ask. Make sure you trust your friends when you share this information. I usually don’t discuss this sort of thing in-house with fellow employees. The one time I did, the guy had moved out of my department and received a promotion. I didn’t think it hurt to tell him because we were both pretty unhappy with our company. I also tend to discuss salary with my manager because I expect him/her to go to bat for me or help me get to my salary aspiration.

Transparency is key though. If you want to stick it to The Man, then share your salary. Find out what others make in your field and make sure you get yours!

Sometimes I like to browse the hardcore geek blogs like Gizmodo, Engadget, Life After Coffee, etc. One that I like to read is a general geek blog called Scobleizer. He’s a former Microsoftie, who is slightly controversial for using his blog as a PR tool for his company’s products. But hey, we all have to make a living. Even Robert Scoble knows that well.

He’s penned a How To post for getting laid off and what you can do about it. He is very realistic as some of his advice comes from his own experiences being laid off in 2002 when the dot-coms all went completely kaput. He admits to taking unemployment. It’s what it’s for.

9. Don’t feel bad about taking government assistance. You’ll need it to pay your bills. I took it and it helped me get over that tough period.

As for me, the things I can offer you as a financial counseling volunteer are these:

1. Get some health insurance. You can get catastrophic insurance or an HMO to tide you over. Unless you negotiate some continued benefits at the same rate as part of severance, you’ll end up paying ridiculous sums for COBRA coverage.

2. If you can’t get health insurance, find a local clinic with pay scaled rates so that you can pay less for services. Generally they are looking at people who make less than 150% of the poverty line, i.e. ~$15K in 2007.

3. Find a food bank. Times are tough and that’s what a food bank is for. If you can’t buy groceries, try the food bank for some short-term help.

4. If you have student loans, consider forebearance till you find a new steady job.

Just a few thoughts for you. Scoble wrote his post in support of Yahoo staffers who are being cut, but it’s still darned good advice.

ps- If you live in Northern VA and want more specific help, please email me and I can send you a list of regional resources. (mostly Arlington specific, but you can probably find an analogue in Fairfax, Alexandria and Loudon counties based off the list.)

Now that I covered the non-financial side of my departure from my last job, I will cover the financial side as much as I can. Every place is different. Each time is different but I hope I can offer you something here for your next transition.

The first thing is that I was leaving around the holidays. Holidays are paid vacation days, so I made sure that I was going to save up as much vacation time as I could so I could receive a payout on those days from my company. Not every place does it, but a lot do. I took every paid holiday that was available to me, except the floating holiday that I get to use on January 1st every year. That would have been another 8 hours of vacation saved for me to receive as cash, but I didn’t want to ask my boss to approve it and then let me take the day as a 2007 vacation day. That would have been ethically shady. Either way though, I had two days for Christmas Eve and Christmas, two days for New Year’s Eve and Day, and two days post-Christmas. In two weeks, I only worked 4 days. Not too shabby.

The second thing is that I was leaving before bonus season and I had to gauge what bonuses would be like. Would they be a paltry sum or would they be the maximum amount available? Word on the street was very quiet. I couldn’t tell, so I assumed that meant they weren’t going to be that good. I weighed the opportunity cost of waiting with the present value of a higher salary. No, I didn’t do the firm mathematical calculations, but I decided the present value of a higher salary was going to be worth a lot more to me, as well as better benefits with the new firm.

The third thing is what to do with your 401k money. I knew I was forfeiting a decent chunk of my corporate match by leaving before fully vesting, but since the match is so low, it didn’t really matter. In a month or two at my new pay rate, I’ll have made that money back. I am going to pull this money out and roll it over into an existing Traditional IRA I have already. Never leave your money behind at your old company’s plan. You usually have 90-days to figure out what to do. By then you can see what your new company has in equivalent investments and roll your money into the new 401k plan, or into an existing IRA (with some restrictions).

Along with that is to double check if you have restricted funds. I just found out that due to some small transfers into an International fund, I cannot sell without a small penalty. I have to wait 60-days from my last purchase/influx of funds to sell without the penalty. C’est la vie. That’s just a calendar item for me in a few weeks. What I needed to do, was stop contributions to that fund entirely, but hopefully the market will do better anyway before I sell.

(more…)

This is a two part series. Part one is the non-financial side of planning an exit from your job. Part two is the financial side.

Exiting gracefully is an art. Don’t look to me for a graceful exit. I have quit in fits and starts. Pique. Spite. Exhaustion. They’ve all played parts in my departures from jobs. This time, I was determined to do it right.

I felt being from a small team, I needed to do right by my manager, whom I had recruited to be my boss. I didn’t want to leave a mountain of work behind for my co-worker, whom we handpicked to join us from our old company. (All three of us are old co-workers.) I would not leave without a month’s notice. It just wouldn’t be fair to leave with only 2 weeks’ notice. Every office is different. Rarely do you owe more than 2 weeks. It all depends. Due to the nature of documenting and transitioning all of my duties, a month probably wasn’t even enough, but it worked out for us.

The inadvertent upside of staying till January was that my boss gets headcount in the 2008 budget so he can replace me. There were rumors that I wouldn’t be replaced, but everyone is certain that my job is essential enough to fill it. But I do recommend thinking a little strategically about when you leave and what you can negotiate with your new employer (if you have one).

I also made a point of thanking my director in person for all that he did for me while my father was ill in 2006. This guy works in a different location and happened to be in DC for some end-of-year meetings. He had gone to bat for me in front of management and got me a 4 10-hour day schedule to let me return home every weekend. As a courtesy to him, I resigned in person and expressed my gratitude for his generosity with my schedule and the latitude he gave me to get projects done. Everyone appreciates autonomy at work. I sure do.

Sometimes, it’s hard to stay focused when you’re departure date is far off. I know there were days when it was tough. But stay a high-performer right until you leave. I was still working till the bitter end on things because I left after the 1st of the month and there was a ton of stuff that triggers on the 1st of the month. I fretted over it getting fixed. I got a few calls and emails about it and did what I could from memory to help. You should remain open to giving a little help to your old team for the work you did. Not so much that it interferes with your new job or creates some ethical conflict, but enough that everyone still thinks well of you after you are gone.

The exit interview was kind of crazy for me. There was a written questionnaire and face to face interview. I had something sensitive to say, but after talking with a few co-workers, I found out that the paper questionnaire gets sent around to my direct manager and director. I decided to leave the sensitive issue off the paper record, but discuss it with the HR person. Ethically, I could not leave my company knowing there was a larger problem brewing so I told the HR person what was going on and its possible future impact. She seemed to have some idea about it, so I was relieved. Some people say don’t say anything negative in the exit interview. Some people, when frustrated, candidly throw the gloves off and tell it like it is in a truly raw fashion. Strive to stay somewhere in between. That’s the best thing I can tell you to do.

To elaborate a little more about my job and what I hope it will be:

1. I wanted to reduce my carbon footprint. I know it sounds cheesy, but I will be able to commute via public transport for my first engagement with this consulting firm. I find that pretty exciting to get a portion of my life back so I can read or knit while commuting. My corporate offices had moved in the last year and the new drive was killing me, especially when it takes two hours to drive past Tyson’s Corner at Christmastime. I wasn’t going to do that again next year. If you want to know more, listen to this Diane Rehm show episode about Happiness. The number one thing that destroys happiness is a long commute to work.

2. I hope that I can stay and grow with this firm for the next 5 to 10 years. I really loved my team at my old company, but to stay there for 5 years would have meant a transfer to the Midwest in a place where I would only have co-workers for friends at the start. (One of the reasons I spent so much on holiday presents for my teammates was because I knew I was leaving and I wanted to give them a token of my appreciation for their friendship over the last 4.5 years through the thick and thin times with our previous totally sh*tty employer to the awesome team we built at the new place.)

3. I am excited that there are great benefits with my new company. My old firm doesn’t even compare. Tuition, training, health insurance, 401k plan, corporate social clubs, everything. Discounts on cars, cell phones, computers, EVERYTHING. I bet I can join a warehouse club at a discount even. Hm. Must look into that.

4. The money is great. It’s a 6% raise over my total compensation from my last firm, but I know that I am more likely to become a 6-figure employee with the new employer. Whereas my old employer wouldn’t give my senior manager a 6-figure salary, though he deserved it, they’d never give me one as a technical minion. It’s actually more like a 16% raise over my base salary, and though I am losing my bonus money for 2007 and a tiny bit of 401k vesting, the present value of money on the checks between January 1 and bonus season payouts have more value. No, really. I can do the math on that since we were notified that we weren’t going to make our targets to get the full 10% bonus. So why should I have waited till bonus season.

That is all. Really, are there any other better reasons to change jobs? Someone asked me about changing jobs and the job hunt. Hang on. I’ll get to that later this week.

EDIT: Contest update. I forgot a deadline. As I am super busy, you have until Saturday, 1/12/2008, 6pm EST to enter by leaving a comment.

Today, January 7, 2008, Mapgirl’s Fiscal Challenge turns 2 years old.

What a long strange trip it’s been. Some of it good. Some of it bad. But always interesting.

What’s happened?
- I went from Blogger, to my own domain with the help of Flexo.
- This blog has grown from a few of my friends reading it to over 140 daily subscribers, many of whom are strangers. (Or just plain old strange for wanting to read about me. Take your pick.)
- I got Dugg a few times. I’ve been Stumbled Upon, scraped, copycatted, and otherwise flattered by the Interwebs.
- I saved up $8,000 over two years to fix my teeth, costing me about $12,000 total. I have one more permanent crown to put in, and that will cost me $1,000, which I hope to pay in cash.
- I am saving $5,000 for laser eye surgery, which I hope will happen later this month.
- I got serious about saving money in my 401k plan and socked away about $25K in two years.
- I got serious about saving money in an emergency fund and still have some money left in it. (A high of $4k, a current low of $1.6K)
- I paid cash for a motorcycle, my newest hobby.
- I’ve made a ton of friends through blogging.
- I made a decent chunk of change through blogging, but recognize that it’s still only a labor of love and will likely never replace my day job.
- I helped my parents buy new windows for their home.
- My dad had a stroke and retired from work.
- I negotiated a crazy raise for myself last year.
- I have learned to carry more cash on me.
- I don’t feel crushed by my debts, but positively focused on what I can do to change my situation.
- My net worth has tripled, but my consumer debt has quadrupled.
- Last, but not least, I start a new job today with a major international consulting firm.

I’m sorry I have written sooner about my job change, but I’ve been holding onto that last little tidbit for over a month and it’s a major consideration with my goals for this year. I didn’t want to share the news till the time was right.

I really want to thank each and every one of you that reads this blog. I feel a lot of encouragement through your comments and the traffic you send this way. I know I’m bratty, spoiled, bitchy, quirky, boring, but somehow y’all still find it interesting enough to stick around and I appreciate it a lot.

In honor of the day, I’d like to have a little blog contest to give away a copy of Debt is Slavery.

To enter, all you have to do is leave a comment. I’ll try to select randomly from the entries but I can tell you now that the Money Blog Network guys are not eligible to win. Sorry guys! All your traffics are belong to us!

Do you ever spend time networking within your own company? If the answer is no, ask yourself why not?

Two stories:
1) My sibling was working in the R&D group of a software company when they happened to be chatting with the Development Lead for the core application they built at that firm. Turns out they were short staffed and hard-pressed to meet a deadline. My sibling says something about being slightly bored and underutilized at the moment. Next day, my sibling’s desk is moved to the core application team and they meet their future spouse. Go figure. All that from a conversation they had by the water cooler.

To elaborate further, this put my sibling on the path to a senior development job within their company and positioned them well for future work. Otherwise my sibling might have ended up a research monkey writing white papers all the time and generally being an academic pinhead in Silicon Valley. Nice work if you can get it, but the money just isn’t there.

2) This week, I get a COMPLETELY random phone call from within my company. This is a really, utterly, most sincerely, random call. I only pick it up because it’s internal and I think they might have misdialed. I have never, ever seen this person’s name before. He says, “Hi! I was searching LinkedIn.com on Subject XYZ and I saw you have expertise in it. I’d love to talk to you.”

Next thing you know, he needs me to act as a consultant/resource on a development project he has going on. I’m referring him to my boss so we can nail down what kind of level of effort is needed and how much of my time my boss will allow me to use for this project. If all goes well, my team will have an additional high profile project and we will look like awesome team players within the company! That’s really exciting stuff. It’s what I like doing best and I am really looking forward to 2008.

I hope these two vignettes show how talking to other people within your company can create new opportunities for you. Sure, it helps to make friends, but what’s more important is to make allies who are on your side. I could have ignored the call that came in or said, “Sorry I really don’t think I can help you.” I admit, I did hesitate at the notion of being sucked into something in which I don’t think I am an expert. However, he was desperate for any information and it turns out by answering with “Let me see what I can do,” it gave me time to dig up some informational resources and brainstorm how I could help this guy out.

Let’s just say, I have a feeling that there are going to be some monetary rewards for this. Not only a one time Above And Beyond award, but my annual performance bonus as well. Having people all over the company say good things about you is good stuff. Your reputation is just as important as your actual merits and talents. Be sure that all of them are solid. You never know what kind of opportunities might come your way by talking to people within your firm.

Single Ma’s reputation as a valuable asset has brought her more work-life balance that she was seeking. If the right people think you are worth keeping, they’ll keep you. They’ll seek you out.

I had another opportunity this week to make a new friend at work. She’s working on a project with me and stopped by my cube to meet me in person. A long time ago she was told to send me a monthly email. But we never actually talked. Since she recognized my name, she came by my desk. She’s young and energetic. I think I could learn a lot from her about scripting and I can teach her a lot of Oracle stuff. It’s a two way street and I think because of it, our shared project is going to work better.

Talk to people in your company. Say hi. Don’t be a jerk and ask the CEO who he is though. I did that once at a company cookout. It was humiliating, but that’s what they get for not having corporate bios with photographs on our website. My only saving grace was that I was asking about waiting for the Redskins football ticket drawing and trying go back to work, thus signaling my good brownie behavior.

Sorry for rambling along, I wrote this very late at night, but I hope you get the point about professional networking within your current employer. There are benefits to it that can be harvested later if you sow the seeds now during the holiday party season!

I went on a job interview yesterday afternoon. It was for an open job fair. I did ok. The screener was very nice and we talked about Oracle and Information On Demand, which is his company’s code words for business intelligence and all of its attendant technical work.

I honestly don’t know why I signed up for it, other than the fact that an email popped into my mailbox. I’ll have to pee in a cup for any of the jobs they offer since this is DC after all and all the good contracting jobs are with the government in some capacity. Have passport, will travel, but no, we aren’t sending people to Iraq or Afghanistan anymore. Dubai and Kuwait are still ok.

I know one of the reasons why I did this was a random IM from a friend of mine. A long time ago we talked about how we got from Point A to Point B and where Point C might be next for us. I seem to have this cheerleading squad of guy friends who like to tell me that I’d be a cracker-jack programmer if I really gave it a good whack. I take their advice seriously since most of them are self-made computer geeks and they love it.

Anyhow, earlier in the week he wrote me to tell me that he reads my blog. He said forget about stretching out a chicken to last for a week. (And I know he was serious because he specifically wrote ‘rotisserie chicken’ in the message.) He asked if I was interested in consulting and started dangling a carrot at me. I quickly brushed him off. I AM making more money now. I rather like the place I am at. My boss is cool. He totally picks up on my Dead Milkmen references. We drink beer together. He lets me *walk out of work a half hour early to go interview somewhere else*. (Well, he let me leave early. I didn’t tell him where I was going. But I don’t think that fact would have upset him.)

The opportunity with my friend’s firm is intellectually intimidating. It would be a serious challenge to stay one step ahead in technical savvy. So much so, that I’d really like to stick around with my cool boss and my cool salary for another year. I just don’t know why I have this itch. I always get the itch for a new job after a year. I’ve been employed at my company now for almost 2 years. It’s alright. The best part is the team I have. We’re all super friendly former co-workers who’ve created this great mix of talents to get the job done.

How many of you stay at your less than perfect job because the co-workers are totally awesome? How much is it worth to you to stay in terms of dollars? $5K? $10K? $20K?

I mean, in terms of dollars, today I gave myself nearly a 20% raise when they asked for my desired salary. I made a note of telling them my base salary and the bonus compensation I last received. hey asked for the former and I tacked on the latter just so they know my desired salary bump was very serious.

So tell me, what does it take to stay? What does it take for you to go?