Money is Not Everything

(After Taxes It Isn't Much of Anything)

$40,000 a year! Does it sound too good to be true? Possibly.... Start Thinking One must ask questions...

  1. What benefits will this position offer you -- Health, life, dental, vacation, which holidays does this company give paid and what portion of the cost(s) will be your responsibility?
  2. Will the company provide you with the required tools of the trade, or are you responsible for such as a "professional"?
  3. Will the company train you in new technologies and skills that are relative to the position and company's needs or are you responsible for seeking and paying for such training?
  4. How does the job fit in with the rest of your life? Schedule? Friends and family?
  5. Overtime?
  6. How do you feel about doing such a job? Will it compliment your day, or will it haunt you until you have had a "cold one"? …


Sure the numbers in the initial offer may sound good, but as the costs of providing benefits rise, many companies are looking to have the employee (A.K.A. you) pick up more of the cost. Companies are doing many things to "control" (read as off load) such costs

  1. Paying full employee costs, but leaving family benefit costs to the employee
  2. Offer incentives for an employee to NOT seek benefits from the company, such as an extra percent of base pay or a fixed amount added to your pay check
  3. "Cafeteria Style Plans" where the company gives the employee a specified amount to "spend," allowing the employee to take home any unused portion or pay out of pocket for any additional costs..

A new employee should always ask what the benefit plan will be for someone entering a certain position at a certain time. Asking the person who had that job before is by no means an indication of what you may get. In trying to control costs while retain some of their senior employees companies may grandfather (allow a certain group to be included) employees hired before a certain date (read as "nah-nah-nah" we were here first) in the older (and better for the employee) plan. When starting a new job, especially near a holiday, ask when you become eligible for holiday pay. Many salaried positions give holiday pay to employees day one, notice I did NOT say all. For hourly paid positions, many companies feel it's a benefit for regular employees, not probationary employees, so you may not be eligible for such benefits until your review.

Cafeteria style benefit plans tend to be great for the employee at first, but are to the company's benefit in the long run. At first the plan covers the customary benefit costs and allows employees to pick additional benefits or take home money not spent on the plan. Single employees are given a certain amount to spend, while those with family obligations are given more as to cover the cost of family benefits. Other benefits may be added enriching the buffet, such as additional vacation. Such a vacation benefit gives employees time off beyond company's traditional paid vacation plan. But like the slop you got in your high school's cafeteria, there's a price, you have to "buy" additional vacation. For every day off, a certain percentage of pay is deducted; retained by the company as to be used as pay during your "paid for" vacation. With such a benefit, even a new employee may be able to get two weeks off their first year, for a pay cut. Retirement If you plan to stay with that company for a while look into retirement benefits.

Some companies require a certain tenure before one can participate usually ranging from 90 days to 1 year. Such companies may further complicate the issue by having periods when one can join. If you thought getting into the retirement plan was tough, getting out before retirement may be tougher. Most plans will allow you to take out the portion you contributed, but may tier company and interest contributions based on tenure or plan participation time. Thus an employee who has worked at a company 3 1/2 years, participated in the plan for 2 years may only be entitled to 40% of the company portion of the contributions. Keep in mind a plan can not only not make interest, but may lose principal as well. Before putting a penny into the plan:

  1. Find out who controls the plan.
  2.  Does the money get invested into one place, or can you choose how it's invested?
  3. Can you change your plan and if you can, when can you change your investment strategy

As an insider the company may set up many rules as to inhibit your use of your position within the company for personal gain. You may be allowed to only increase or decrease a certain percent of your investment at a time. You may not be allowed to buy or sell stock for a month before the annual report comes out, before a stock split, a merger, etc... In short because you will be in control of the company (haha), you may not be allowed to control any of your money invested in the company.


Many companies offer three benefit levels --

  1. Employee
  2. Employee plus spouse
  3. employee plus family

More Expenses

Beyond the insurance benefits there may be more hidden expenses.
Some jobs require uniforms or may have some minimum dress code. Companies that require specific uniforms usually provide them, but may not let you start until they have your size in stock. Such items are usually a shirt or jacket with the company logo or other such item that mark you as an employee to customers.
If instead of a uniform you are told about certain standards of attire expect to dress like you're interviewing every day. Because there is nothing special about such clothes, your new employer will expect that such clothes are already part of your wardrobe. "Business casual" usually excludes jeans, t-shirts, sweats, sneakers, boots and other types of really comfortable clothes.

Having a job is expensive. Another big expense to many in both time and money is the commute.

Even if your car is 99% dependable, consider the other 1% Coworkers, friends, spouse or mass transit are other options to be considered.

Time As A Resource

Most interviews are conducted within business hours or well after business hours as to accommodate the working applicant. As a result the applicant misses the real killjoy of the day -- the rush hour commute. During this period of the day, 55 mph road ways crawl at 30 mph or less, while commuter railroads and busses charge peak fares (read as max screw).

 People who live in the city where everyone works and work in the suburbs where everyone lives are able to zip along empty lanes while looking at everyone else sitting in what looks like a parking lot. Commuters going from one suburb to another may wish to drive around a big city than try to drive through it.


Unless you are either telecommuting, close to home or are on a starvation diet, you are going to need to eat at least one meal away from home. If the company has a refrigerator and a microwave, then you may get off cheap by eating last night's left overs for lunch. Large cost conscious companies (read as cheap) may have cafeterias, so they do not feel the need to provide access to refrigerator and microwave for every employee. Employees at better companies or more privileged departments may have access to both a kitchenette and a cafeteria. On the way to the site keep a lookout for nearby restaurants and which make the three working food groups

  1. Fast food (Mickey D's, BK, etc...) and other such chains
  2. Sit down food -- local pizza, Chinese, deli's etc...
  3. Classy expensive restaurants

If items 2 and 3 are in the area, keep $20 at all times, in case you are "asked to participate in a working lunch" (read as if you want to stay in the real loop....).

Professional Equipment

If the job you are seeking requires special tools, will the company provide them or are you expected to have them because you are a "professional"? Many companies will provide some of the bigger tools as part of the company's facilities, but may nickel and dime the employee to death requiring the employee to purchase small items that have a tendency to walk off. Wire cutters, screw drivers, etc... do have a tendency to disappear in even the most honest work environments, especially in cases where the employees frequently travel to client sites. If the company says that you are responsible for providing your own tools ask about materials. A computer technician may be required to purchase their own soldering iron, but who is going to foot the bill for the solder itself? Yet again you may be nickeled and dimed from your paycheck.

Home Facilities

If you seek a job that allows you or expects you to work at home, do you have the facilities? If you don't then who foots the bill? Even if the company says that they will offer certain allowances, you may have to wait before they'll reimburse you of any such expenses. Once when the company pays you back for anything that you received to do your job, what other strings are attached? Some companies will ask for all physical materials back when you leave. Other companies may offer to sell such items to you at a reduced price, depending your service time and the age of the equipment at the time of your termination.


Education is a touchy item; there is no legal and ethical way they can take that back from you. However, most companies may deduct any monies they feel due from your next check. Once again, ask how will the company determine what I may owe? Will I be responsible for the costs of all classes I took during a certain period, or for the classes that I specifically asked to attend? The company may also require you to attend classes to acquire skills that will be of little use to you elsewhere. Ask about your pre-employment agreement, as such classes could make your resignation a very expensive process.


Becoming part of some company's work force means that you have to join other organizations that will take both your personal time and your money. Unions are quite common among blue collar workers, and at some companies include office (white-collar) employees as well. The union will get a piece of your check as they represent you, like it or not. Additionally unions may require your presence at meetings that may be held during non-working hours. Unions can also call strikes or encourage your company to lock you out due to stalled talks. Such events can be expensive, as union strike pay is only a fraction of your regular earnings.

Miscellaneous Services

Larger companies may have certain employee services in house while smaller companies may have deals with local service providers. Large companies may offer in house childcare services as to attract and retain employees who are starting families. Other personnel service companies looking to attract business may offer discounts to employees. A restaurant within walking distance may offer a discount to employees as to encourage you to stop in. An insurance agent may do the same, hoping you'll bring your business to the work area rather than keeping it near home.


Some companies have highly specialized and expensive tools required by their industry, which you may have a use for in your personnel life. If what you intend to do does not interfere with company business, you may be able to use them on your own time. Ask, do not assume. Once again, depending on your situation, this could be a perk worth considering. Many companies, especially ones that target consumers (as opposed to those who target other companies) may offer discounts on products or services that you either use daily or may be of some interest to you with the discounts. A beverage bottler may offer employees the product at wholesale or distributor prices, a deep discount from retail. Figure how much of that product or competitor's your family buys and how much you'll save with that discount. Other companies may make or offer services that you'd normally not buy or use because of the price or your lifestyle. Membership at a health club is an expensive item, but as a perk, can enrich your life.

Remember a $1 saved is worth about $1.50 earned. Back when Benjamin Franklin said, "A penny saved is a penny earned" there were no income taxes. The government can only tax you on the money you earn and spend, they have not figured out how to tax you on the value you get from your money.

In short, benefit plans are confusing and comparing one company's benefit plan to another is like comparing apples to oranges -- don't. Instead ask yourself which one is better for you. When someone asks you if you like apples or oranges better, do you compare the two? Most likely not, but instead you choose based on what you feel about each fruit then compare that feeling you have on each one. In short you must see what benefits, responsibilities and perks come with your paycheck. A family breadwinner may do much better at a $35K/year job with a good benefit plan than at a $40K/year job with fewer benefits and/or more professional responsibilities

© 1998 Frederick M. Picroski