Ever since I started working, I would buy lunch on site or go out for lunch. It was rare that I brought my lunch to work. For two summers in college, I worked at Sea World. I ate lunch on-site because my co-workers did. Buying lunch was the social thing to do. At my part-time job during college, I bought lunch because I felt I had the money to pay for the convenience of not bringing my own lunch to work. At my current company, I bought both breakfast and lunch for convenience. But what was the price of convenience?
When eating out, breakfast would cost anywhere from $1.50 to $5, with the average being around $3. When eating out, lunch would cost $4 to $10, the average being about $6. Each week, I would spend an average of $45.
Ever since December, I've been on a mission to save more, and I first targeted food, my biggest expense. I joined thegrocerygame.com which is site that combines grocery sales in addition to coupons for top savings. Sometimes items are even free. I usually spend about $30 a week on groceries, and that not only covers my food for just working hours, but for every meal and snack for 7 days.
Buying groceries and bringing my lunch to work saves me $15 a week, or $780 a year. Besides the money savings, I also save time and make my life more convenient. When I bought lunch went out, I had to drive somewhere, find parking, wait in line to order, eat, then drive back. The gas is not free so driving costs me money. When I ate at the on-site cafeteria, I had to walk to another building, look around for something to eat, wait in line, wait for my food to be prepared, and wait to purchase my food before I can finally eat. The whole process for buying lunch could take an hour. When I brought my lunch to work, it takes maybe 5 minutes to prepare my food if I had to use the toaster oven or microwave, and I would not have to deal with waiting in lines, wasting gas, and wasting time. I would only spend 10 minutes preparing my lunch the night before but I had the convenience to do that at any time. So the "convenience" of fast food and paying others to prepare my food wasn't really all that convenient after all.
One last area of savings of groceries purchases versus eating out was credit card rebates. When I would eat out, I used the Chase Freedom Visa, which would give me 3% cash back. When I shop with groceries, I would use my American Express Blue Cash, which would give me 5% cash back.
By buying items according to thegrocerygame.com, my groceries vary from week to week which forces me to try new buy familiar foods. I even the the equivalent of fast food places for cheaper. My favorite sandwich at Quiznos was the Turkey, Bacon, Gaucamole, better known as the TBG. I make the exact same thing with their same ingredients: whole wheat bread, deli turkey, bacon, guacamole, mozzarella cheese. I even toast it using the toaster oven at work to get the same crispy texture. My only regret for bringing my lunch to work is that I didn't do this sooner. I would have saved thousands over the last few years.
Saturday, March 15, 2008
Monday, March 10, 2008
Yearly review, annual raise, and bonus
Today at work, I had my annual performance review. It's a review of my performance as it relates to goals and milestones I established for 2007. The performance is weighted by several categories. 70% of the performance is related to meeting defined goals. 15% of the performance is related to job specific competencies. The last 15% of the performance is related to core competencies as it relates to our company's vision and quality goal. Within each of those categories are more specific sub-categories, but I will not go into those.
For each sub-category, I am given a rating by my manager. It can be one of the following: met expectations, exceeded expectations, needs improvement, or no feedback. Based on a scale of 4.0, I would receive a 3 for every category that met expectations. Therefore 4 means I exceeded expectations and a 2 means I need to improve in the area. Overall, I exceeded expectations in 5 categories, met expectations in 12 categories, and needed improvement in 1 category. Overall, I received a weighted score of 3.22 out of 4.
So what do those numbers mean anyways? Well those numbers directly affect my annual raise and bonus. Each year, the company sets a new baseline percentage that is standard raise if someone met expectations for every category. So, if they set the baseline raise percentage to be 5%, someone who received a weighted score of 3 would receive a 5% raise. A higher weighted score would receive a higher raise than 5%, and a lower weighted score would receive a raise lower than 5%. This year, the baseline was set at 4%, which is lower than previous year. Coupled with my 3.22 weighted score, I had an effective raise of 4.3% to go into effect later this month.
There are three factors in determining the annual bonus. They are individual performance, company performance, and bonus target percentage. Individual performance is taken from the weighted score. Company performance is similar to calculating the goal category for individuals. Bonus target percentage is the percentage of last year's salary that I can receive as a bonus if everything else met expectations. So if my bonus target percentage is 5%, I have the opportunity to make 5% of last year's salary as a bonus.
The bonus target percentage is differs for each position in the company. The breakdown is as followed:
15% - Directors and above
5% - Managers
3% - Supervisors and below
The equation is calculate bonus is complicated to explain, but for simplicity, the equation to calculate the bonus equals (individual performance) x (company performance) x (bonus target percentage).
I fall into the 3% category, so coupled with my weighted score of 3.22 and a company performance of 133%, I am receiving a target bonus equal to 4.2% of my salary last year.
In terms of actual dollars, my salary is now $51.8k, up from $49.6k, and my annual bonus is $2.1k. I'm not that happy with the actual numbers, but until I'm 100% vested in my 401(k), I will stick with my current company. I will try to find a higher paid internal position, but if that does not happen, I will look for career opportunities elsewhere.
For each sub-category, I am given a rating by my manager. It can be one of the following: met expectations, exceeded expectations, needs improvement, or no feedback. Based on a scale of 4.0, I would receive a 3 for every category that met expectations. Therefore 4 means I exceeded expectations and a 2 means I need to improve in the area. Overall, I exceeded expectations in 5 categories, met expectations in 12 categories, and needed improvement in 1 category. Overall, I received a weighted score of 3.22 out of 4.
So what do those numbers mean anyways? Well those numbers directly affect my annual raise and bonus. Each year, the company sets a new baseline percentage that is standard raise if someone met expectations for every category. So, if they set the baseline raise percentage to be 5%, someone who received a weighted score of 3 would receive a 5% raise. A higher weighted score would receive a higher raise than 5%, and a lower weighted score would receive a raise lower than 5%. This year, the baseline was set at 4%, which is lower than previous year. Coupled with my 3.22 weighted score, I had an effective raise of 4.3% to go into effect later this month.
There are three factors in determining the annual bonus. They are individual performance, company performance, and bonus target percentage. Individual performance is taken from the weighted score. Company performance is similar to calculating the goal category for individuals. Bonus target percentage is the percentage of last year's salary that I can receive as a bonus if everything else met expectations. So if my bonus target percentage is 5%, I have the opportunity to make 5% of last year's salary as a bonus.
The bonus target percentage is differs for each position in the company. The breakdown is as followed:
15% - Directors and above
5% - Managers
3% - Supervisors and below
The equation is calculate bonus is complicated to explain, but for simplicity, the equation to calculate the bonus equals (individual performance) x (company performance) x (bonus target percentage).
I fall into the 3% category, so coupled with my weighted score of 3.22 and a company performance of 133%, I am receiving a target bonus equal to 4.2% of my salary last year.
In terms of actual dollars, my salary is now $51.8k, up from $49.6k, and my annual bonus is $2.1k. I'm not that happy with the actual numbers, but until I'm 100% vested in my 401(k), I will stick with my current company. I will try to find a higher paid internal position, but if that does not happen, I will look for career opportunities elsewhere.
Friday, March 7, 2008
Giving financial advice to my boss
So as the work week was winding down and 30 minutes until I could go home, my manager asks me if I'm good with investments with regards to our 401(k) plan. It was kind of weird for her to approach me about finances. Even though she knows how much I make, I'm not sure how she knows why I would be good about that stuff. Maybe she heard from my co-workers. Anyways I agreed to help her out.
My manager was getting worried because nearly every investment offered in our 401(k) plan was negative for the year. I had to tell her not to worry because now she is able to buy shares of those investments for a discount. If we are in a recession, all we have to do is stick to a good asset allocation and continue to contribute no matter what the condition of the stock market was.
Principal Financial, the company that administers our 401(k), recently added target-date funds. The funds automatically change your asset allocation from high risk growth to low risk funds as you approach the target date of your retirement. I asked my manager when she planned to retire. She was aiming for 2017. Looking over the target-date funds, the target dates were spaced every decade. If she chose the 2010 target-date fund, her asset allocation would be too conservative from 2010 until 2017 while she continues to work. If she chose the 2020 target-date fund, her asset allocation might be slightly riskier for the first three years of retirement. To immediately address her needs, I suggested a 50-50 split of both the 2010 target-date fund and the 2020 target-date fund. The combined asset allocation of both target-date funds should be equivalent to a 2015 target-date fund.
The whole conversation took about 5 minutes. I was straight to the point and confident in my decision. When I met my manager at her desk, she had a printout of the performance of the 24 funds offered in our 401(k). I did not look at a single number. I do not need numbers to tell me how good a particular fund is. It would have been hard to individually choose the good funds from the list, since all year-to-date changes were negative. To get the best performance with as little risk as possible, it was more important to pick an asset allocation with risk that she can tolerate.
The only thing I could have done better was pick a better ratio of target-date funds. A 50/50 mix of 2010 and 2020 target-date funds would have an asset allocation equivalent to a 2020 target-date fund. I should have calculated a ratio that would have given her the asset allocation of a 2017 target-date fund. In that case, a 30/70 mix of 2010 and 2020 target-date funds would have given her the proper asset allocation.
My advise to my manager does not directly help me career wise yet. Especially since I gave her advise in the area of personal finance and that I work in the chemistry lab. She already knows my expertise with chemistry, computers, technology, and writing, that contribute to performing more than what is expected of my position. A knowledge in finance might be another area that adds value to my versatility of my position. It possibly might lead to a pay raise to keeping me around. Another possibility is getting promoted into a supervisor or managerial position because of my knowledge of finances, budgeting, and discount purchasing.
My manager was getting worried because nearly every investment offered in our 401(k) plan was negative for the year. I had to tell her not to worry because now she is able to buy shares of those investments for a discount. If we are in a recession, all we have to do is stick to a good asset allocation and continue to contribute no matter what the condition of the stock market was.
Principal Financial, the company that administers our 401(k), recently added target-date funds. The funds automatically change your asset allocation from high risk growth to low risk funds as you approach the target date of your retirement. I asked my manager when she planned to retire. She was aiming for 2017. Looking over the target-date funds, the target dates were spaced every decade. If she chose the 2010 target-date fund, her asset allocation would be too conservative from 2010 until 2017 while she continues to work. If she chose the 2020 target-date fund, her asset allocation might be slightly riskier for the first three years of retirement. To immediately address her needs, I suggested a 50-50 split of both the 2010 target-date fund and the 2020 target-date fund. The combined asset allocation of both target-date funds should be equivalent to a 2015 target-date fund.
The whole conversation took about 5 minutes. I was straight to the point and confident in my decision. When I met my manager at her desk, she had a printout of the performance of the 24 funds offered in our 401(k). I did not look at a single number. I do not need numbers to tell me how good a particular fund is. It would have been hard to individually choose the good funds from the list, since all year-to-date changes were negative. To get the best performance with as little risk as possible, it was more important to pick an asset allocation with risk that she can tolerate.
The only thing I could have done better was pick a better ratio of target-date funds. A 50/50 mix of 2010 and 2020 target-date funds would have an asset allocation equivalent to a 2020 target-date fund. I should have calculated a ratio that would have given her the asset allocation of a 2017 target-date fund. In that case, a 30/70 mix of 2010 and 2020 target-date funds would have given her the proper asset allocation.
My advise to my manager does not directly help me career wise yet. Especially since I gave her advise in the area of personal finance and that I work in the chemistry lab. She already knows my expertise with chemistry, computers, technology, and writing, that contribute to performing more than what is expected of my position. A knowledge in finance might be another area that adds value to my versatility of my position. It possibly might lead to a pay raise to keeping me around. Another possibility is getting promoted into a supervisor or managerial position because of my knowledge of finances, budgeting, and discount purchasing.
Sunday, March 2, 2008
March Net Worth
I just logged into Yodlee Moneycenter to check my net worth for March. Here are the figures.
Total Net Worth: $73,337.00
Total Assets: $84,241.07
- Banking: $19,615.75
- Investments: $64,625.32
Total Liabilities: $10,904.07
- Credit Cards: $10,904.07
Overall my net worth from February to March went down from $84.7k to $73.3k. That is a decline of 13.5%. My banking and credit cards remained relatively the same. The drop in my net worth is due to the investment categories. The investment category includes 401(k), Roth IRA, bonds, mutual funds, individual stocks, and stock options. I am currently not balanced with a proper asset allocation in the investment category.
My investment category is heavily weighted with one company. It is for the company I work for because of all the stocks I accumulated from the employee stock purchase plan and also from stock options. So when the market took a tumble, so does my company, and so does my net worth. But when the market increases, so does my net worth. It is a risk I am willing to take right now. As prices increases, I do sell off company shares and move it towards better balancing my asset allocation.
Total Net Worth: $73,337.00
Total Assets: $84,241.07
- Banking: $19,615.75
- Investments: $64,625.32
Total Liabilities: $10,904.07
- Credit Cards: $10,904.07
Overall my net worth from February to March went down from $84.7k to $73.3k. That is a decline of 13.5%. My banking and credit cards remained relatively the same. The drop in my net worth is due to the investment categories. The investment category includes 401(k), Roth IRA, bonds, mutual funds, individual stocks, and stock options. I am currently not balanced with a proper asset allocation in the investment category.
My investment category is heavily weighted with one company. It is for the company I work for because of all the stocks I accumulated from the employee stock purchase plan and also from stock options. So when the market took a tumble, so does my company, and so does my net worth. But when the market increases, so does my net worth. It is a risk I am willing to take right now. As prices increases, I do sell off company shares and move it towards better balancing my asset allocation.
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