When Johnny and I got our first real jobs out of college, we were both just giddy that someone wanted to pay us a salary. Us! Our combined income the year prior had been $19k, so any sort of steady income made us feel like kings (ahem… or rather, king and queen). Our only real question when it came to job searching was, “How much does it pay?!!” I mean, what else was there? Well, actually a lot, which we learned as we became more immersed in this thing called “adulthood.” Blegh.
As many of you full-timers know, a lot more goes into a salary than just the number on your pay stub. So before you become all slack jawed and googly-eyed over the salary number a company is promising, it’s important to consider the following:
As Johnny and I learned after Sally was born, the insurance your company offers can save you thousands. It’s important to look not only into the quality of the insurance, but also the amount of your monthly premium (here’s a refresher on insurance terms). When considering the quality of insurance, the premium, copay, and deductible are core considerations. Since the premium is the amount you’ll be paying each month, that number is especially important. Employers could pay anywhere from 0% to 100% of your premium.
Does the company offer a 401k (or 403b)? Does it match any contributions you make? To what percent? I know these sound extremely boring and — if you’re under the age of 25 — extremely irrelevant. But they’re not! It’s important to know the answer to these questions, especially if you’re planning to work for a company long term. Having a 401k match from an employer is free money — free money that will grow exponentially and make money babies just for you.
While no one wants to think about the depressing topic of life insurance, it is good to know whether your company offers it for free. As a newly graduated 22-year-old, I tried to opt out of my company’s life insurance because it seemed irrelevant. But they told me it was free, duh! This one isn’t a huge consideration, but it’s good to be in the know on a company’s policy.
Bonuses are pretty self-explanatory. If possible, find out what kind of year-end bonus a potential employer offers. It could boost your salary thousands of dollars, or maybe just a few hundred dollars. It may also be dependent on other factors, such as meeting certain quotas.
Relocating can cost thousands of dollars. Before you say “I do” to a company, knowing whether they offer a relocation package (and what it entails) is a must. Johnny has negotiated a relocation package with every job he’s accepted, which has made the whole moving process less stressful on us and our wallets.
It’s always important to factor paid time off into a salary. A company that offers 10 days off versus 20? Well, your quality of life at the latter company will most likely be better. Also, knowing the hours expected from employees is crucial. Asking about the work/life balance of other people at the company is probably a good indicator of what kind of hours you’ll be putting in as well. If you’re a single twenty-something, 60-hour weeks may not be a big deal, but if you’ve got a family, long hours could be a deal breaker.
Back to the talk of retirement nonsense? Yes. If the company has profit sharing, your retirement savings could really benefit. When the company does well, your retirement savings do well. While you won’t see that money right away, it could make a huge difference in your retirement years down the road.
So the next time a job offer (or two or three) comes your way, do your homework on what that salary really entails. Being a responsible adult is oftentimes totally dull, but when money is on the table, it pays to be just that.
Any other factors you consider before accepting a salary? Please share!