Are you working like the job you want to get paid for?

3D Business Man Going UpstairsKJ: This post is dedicated to those of you who are career climbers in your organization – do you get paid for the job that you do now or do you work like the job you want to get paid for? It’s quite the philosophical question when it comes to your job for the people you hire (if you manage people) and for your outlook on your own career. They’re vastly different points of view. One implies that you get paid for anything and everything you do. The other implies that you prove yourself of sorts to be able to get paid for the job you ultimately want and for a job well done.

Why wouldn’t you get paid for the job that you do?
Sure, that sounds reasonable, right? I mean, come on! Under what scenario would someone not get paid for the job that they are doing? I bet if you asked your friends, though, each one could come up with a list of 5-10 things that they do each week that’s not a core part of their job description or “what they get paid for.”

AJ: I loathe people who say “that isn’t my job.” Keeping your job is your job, right, so how can anything you’re asked to do NOT be your job? Be known as a do-er and what you’re doing now probably won’t be all you’re doing for very long because do-ers get noticed!

KJ: So, how do you transition to a philosophy wherein you work for the job that you want to get paid for? Here are a few ways to re-frame your perspective and expectations.

Understand you’re not where you want to end up
The current job you have is likely to be a lower point (pay or responsibility – they don’t always go hand-in-hand!) than where you will be in 10-15 years. If you’re a driven person, then the career and role you hold today is likely to be but a low man on the totem pole for what you want out of your career.

Prove your worth to the people around you
Volunteer for tasks, projects, or assignments. Don’t just sit idly by and assume that someone is going to hand a better position or increased pay to you on a silver platter when the time is right and you’re perfectly ready. Sometimes you have to take a little risk and step out of your comfort zone when the right opportunity comes along. There’s a lot to be said for someone who takes action and steps up when no one is asking.

Prove your worth to the people outside of your office
Whether it’s directly related to your line of work or through your favorite volunteer organization, try to go the extra mile in showing your value and commitment to the overall team – wherever that may be. Most things these days have little to do with the individual themselves, but more so on the progress of the overall team.

Prove your worth to the people inside your office
If your team members are floundering, then find a way to help motivate them to step up their game. Sometimes just a little notice of encouragement goes a long way to really building the morale of your team, so you can feed off one another’s drive and successes to make your organization better. Keep in mind that the whole of the organization can be greater than the sum of the individual parts.

Be professional
You never know when an opportunity will arise and knock on your door, so being professional in all your encounters will work wonders for the doors of opportunity that will open along the way.

    Do you get paid for what you do?
    Do you work like it’s the job that you want?
    What motivates you to push yourself just a little further to take initiative?

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Are you working like the job you want to get paid for? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

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Is your time worth as much as you think?

Time is MoneyKJ: Have you ever sat down to actually figure out what your time is worth? Time is one of the scarcest resources, and it’s one that you can never get back. Knowing the trade-offs of what you are missing out on (often called an “opportunity cost”) can go a long way in understanding how you bring balance to your life and evaluate a purchase (whether significant or not). Let’s start with a simple calculation:

What is your yearly take-home (or family’s take-home)?
This should be relatively easy. For those of you that are salaried, the number is pretty easy to calculate – just add up your income from this last year.

For people with irregular incomes and uncertain bonuses, don’t put a whole lot of weight to those lumpy income payments. Instead, try to take a 6-18 month average (depending on just how variable your income can be) leaving out some of the larger bonuses/commissions/irregular income payments as applicable.

The 2,000 hour rule of thumb
Under both of these methods, simply divide the income number by 2,000 (the approximate number of hours worked by someone who is full-time at 40 hours per week). So, if you made $20,000 last year, your hourly rate is about $10 per hour. If you made $50,000 last year, your hourly equivalent is closer to $25.

Back out taxes
Now it’s time for the not-so-fun part. Take your number from above (sounds nice, doesn’t it?), and subtract out your taxes – boo! If you’re in the 15% tax bracket, then simply take the number from above and multiply by 85%. So, if you made $25/hr then your after-tax would be $21.25. If you’re in the 25% tax bracket, multiply by 75% ($18.75 if we continue our example). Don’t forget the impact of Social Security, Medicare, and state taxes (if that applies!) which could all take another 10%+ off your take-home pay! What you thought was your real take-home pay per hour could be significantly lower.

DIY or hire-it-out
Now that you have a quick rule-of-thumb of what your typical hourly-equivalent rate is, it might help you think about purchases in a different light – or hiring out that project instead of DIY. While I’m all for doing as much as you can yourself, there are definitely times when your time may be better spent hiring out a professional who will (1) have a better idea what to actually do, (2) has experience in doing it error-free (or as near error-free as you can get), and (3) who can do it far more quickly than you could accomplish it.

Even if the project is quite basic, maybe you would spend $400 worth of your time when you could have hired it out for $300. If instead the numbers were flipped, and it would have taken $200 worth of your time, yet you would have had to hire it out for $300 then maybe the hire-it-out option doesn’t make as much sense.

Money you have is different than money you could have
Clearly not all decisions are based on the fact that you could be working and generating income while the person you hired is completing the task. You may need to factor in some non-monetary considerations as well like needing a break – there are only 24 hours in a day!

Particularly if you live in the salaried world where extra work doesn’t quite relate directly to your take-home, the decision might not be quite as easy. It could boil down to whether you could be building your marketable skills for future (unknown) income opportunities – i.e. investing in your human capital – to be able to increase your hourly-equivalent rate in the future. Surely that’s worth something!

Use this to calculate any purchase
If the purchase of [insert product name here] is going to set you back $200, and you’re hourly equivalent after taxes is $20, then it would cost you 10 hours of work to pay for said item. It’s a good way to ask “was my hard-earned time for 10 hours really worth this purchase?” That’s about 25% of your entire week’s work…framed that way, your answer might differ.

This can be an exceptional way to really balance your wants and your needs for that good old budget of yours.

    Have you thought about how many hours it would take you to pay off something?
    Did it sway you into making the purchase or did you realize the purchase wasn’t worth it?

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Is your time worth as much as you think? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Maximizing your major purchases

Labor Day Shows Holiday American and Patriotism
AJ: If ever there was a year of saving, this has been the year of spending on larger purchases and home improvements for us. Despite my best efforts we’ve spent a lot of money on major purchases for our house, so needless to say, I’ve been putting off replacing our washer and dryer despite their major flaws. A few weeks ago I finally declared my hatred for these builder-grade monsters and started researching our options. I’ve been so busy at work that I completely missed Labor Day’s approach, so last week when someone mentioned the Monday holiday I knew my washer and dryer problems were about to be solved!

As we look at major purchases I always say that I don’t want to purchase the same item within the next 10 years. Spending $400 now and $400 in 5 years on middle of the road appliances is not better than spending $800 on appliances that come with a 10 year warranty. Earlier this year we ponied up big bucks for a Miele vacuum and it hurt at the time but that thing has made my cleaning life so much easier, and I know it’s built to last so for me it’s worth every penny to purchase for quality and lifetime value than price.

Last year we purchased an entirely new kitchen of appliances on Labor Day and saved big with sales and rebates. This year’s options were almost as good, but keep in mind that buying in bulk costs more but often results in bigger rebates and better negotiation leverage. Appliances might as well be cars at local places, they’re all commission-based sales people and you hold all the cards, so negotiate hard and don’t be afraid to ask for the price you want.

So this year after I realized Labor Day was coming I spent more than a week researching and shopping, so I knew what I wanted and I knew what everyone’s regular prices were. All I needed to know was what they’d offer once the holiday weekend hit. Honestly, this took more effort than I expected. One local retailer had a $50 rebate that I couldn’t hunt down from Home Depot, Lowe’s or Best Buy even after calling each company’s customer service team and LG’s but when you add Cardpool.com to the mix, our local guy just couldn’t beat the total price and I had to forego the $50 rebate and go with our friends in orange.

If we had purchased the washer and dryer two weeks before Labor Day, each would have been $899. The week before Labor Day, both went to a special price of $678.60 for a total of $440.80 off, almost 25% savings. THEN we saved another 10% by purchasing electronic gift cards through Cardpool.com (still, our favorite site for most every major (and many non-major) purchase! Since you can use gift cards on the entire purchase, you’re technically saving 10% off your grand total which means you’re paying less in tax, too. On top of all of that, I signed up for Home Depot mobile alerts and got a $5 off $50 so it breaks down like so:

Had I walked into Home Depot at the beginning of August my purchase would have looked like this:

    - washer and dryer: $1,798
    - sales tax: $148.34
    - grand total: $1,946.34

Doing it my way (the ONLY way, unless you hate saving money) on Labor Day:

    - washer and dryer: $1,357.20
    - sales tax: $111.97
    - grand total: $1,469.17
    - purchased $1470 worth of Home Depot gift cards from Cardpool for $1,323

Total savings by doing it my way: $623.34 – wabam! Irrefutable proof that doing your research pays off in a big way.

    Will you be making any large purchases this Labor Day?
    What are your cost savings secrets?

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Maximizing your major purchases is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

Is it more stressful to not have an emergency fund or to spend one you already have?

Locked Piggy BankKJ: If you don’t have an emergency fund, the answer to you may seem simple, but once you’ve built up that emergency fund, then when it comes time to actually dipping into it for an emergency – yes, that’s right, an emergency – you may find that your answer to the question isn’t so simple!

Before we go any further, if you don’t have an emergency fund (or don’t have an adequate one yet), then read our prior post on why you need an emergency fund, so you can get on track sooner rather than later. That’s priority numero uno.

If you do have an emergency fund – go ahead and pat yourself on the back whether you’ve made it all the way to build it up or you’re still working on it! – then the chances are you have been faced with this question before. A tree falls on your house, your car breaks down on the side of the road, or you have a sudden medical complication that has your head running in a tailspin as you try and calculate all the numbers and expenses that are coming your way.

Spending your hard-earned savings can be stressful
It can be quite difficult to psychologically part with any of the money you’ve built up. You spent your hard earned time building it up, so when it comes time to deal with the actual emergency itself, you may find yourself cutting your expenses further for the month rather than wanting to dip into your savings. I mean, if you can still make it work and not really cause your budget to be completely turned upside down, then why not? The sense of accomplishment of making it work within your month is quite rewarding to know that you were able to take the challenge head-on.

Once you spend it, you have to work to build it back up
An obvious issue, but part of the reason why it can be so difficult to spend that hard-earned cash. Hopefully if you’ve been good about your emergency fund, once it’s built up, you just redirect the savings to additional retirement savings or to other longer-term investment savings. So, if you have to build back up the emergency fund again, then you may just need to revisit your priorities on whether other savings amounts will need to be adjusted.

It’s always a moving target
Hopefully over your career you are increasing your income as you build up your skill-set in making yourself marketable to employers. If you simultaneously increase your expenses while your income soars, then you’ll find that your emergency fund needs will soar to new heights as well! All the more reason to just keep your expenses low and to ratchet up your savings, not your lifestyle.

You get accustomed to your new normal
You get used to watching your emergency fund as a nice little addition to your net worth. Whether that’s $5k, $10k, or $20k+, parting with any portion of it means your net worth takes a hit. And who likes to see their net worth decline? You get used to seeing it build over time that you hate to have a period of time where it dips some. Sometimes though it can be the push you need to try and find creative ways to make money the weird way like we did this last month. I mean, everyone needs a little inspiration here and there to innovate, don’t we?

    Have you had to dip into your emergency fund before?
    Did you have to fully-fund the expense from the account or did you cover some of it from your budget?
    Was it difficult to build up the emergency fund again?

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Is it more stressful to not have an emergency fund or to spend one you already have? is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.

10 signs that your budget needs a makeover

Hand Holding Dollar
AJ & KJ: Here are our 10 signs that your budget needs a makeover:

1) The words “I’ve never made a budget” come out of your mouth
WHAT!? Okay, so forgive my shock and awe, but this is a no brainer. Never made a budget = never been aware of your true expenses. Get to cracking and check out a lot of the simple and free options out there for starters to see how to create a budget.

2) You say things like “I don’t know what I spend per month on [xyz]…”
If you don’t have a clue what you spend in a given month in any particular area, that’s typically an indication that your budget is a leaky faucet. Time to get out Quicken or Mint.com and run the numbers to see what you’re spending. It can be a good chance to find an area to trim where you didn’t realize you were over spending!

3) Your budget contains more categories than you can count
Simplify categories to show your primary fixed items (or relatively fixed items when it comes to insurance, utilities, etc.) and create as few categories as you can on the discretionary items so you can more easily see the total dollars you’re working with on a month-by-month basis.

4) You don’t “close out” the month
This is a must for us and should be on the list for all budgeters. Make sure you true-up your expenses for the month, so you can identify what (if anything) can hopefully be swept into your savings accounts! Don’t fall into the trap of spending right at the end of the month thinking you’ve earned it only to come apart at the last minute.

5) Your budgets are too idealistic
Yeah, that’s right. Sometimes you can create a goal that is too aggressive for even you. Create budget amounts that are both realistic and attainable.

6) You don’t pay yourself first
Priority numero uno is to pay yourself first! Have some of your savings come off the top through programs like payroll deduct or automatic monthly transfers, so you don’t have it to spend regularly.

7) You don’t have any room to save
Blasphemous! No matter how good of a budgeter you are, there are always ways to trim a little to make sure you are saving to meet your goals. If that’s not one of the highest priorities in your budget, then think again, and get back to the drawing board!

8) Roth IRAs are non-existent
Especially for you young savers out there, if your budget doesn’t include some savings to Roth accounts (via Roth IRA or Roth 401(k)), then you should reconsider and reevaluate your options. Roths can be a great tool for those young savers at heart!

9) You don’t plan for upcoming expenses
Make a list before each month and update it as irregular expenses come up. Maybe this month you need to buy dog food or pay for an insurance policy or have a lot of gifts to give. Keep track of it and plan ahead, so it doesn’t surprise you at the last minute!

10) And lastly, you don’t budget with financial goals
No. no. no. Why save if you don’t know why you are saving or what target you’re saving for? Get a plan in place so you can stick to it and know what you are aiming for!

Just starting out? Check out our budget quick start guide to learn what you can do to get on track!

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10 signs that your budget needs a makeover is copyrighted by TheSimpleMoneyBlog.com without consent to republish.

Some of the links in the post above may be affiliate links. This means if you click on the link and purchase the item, we will receive an affiliate commission. We feel strongly about only recommending products or services we use personally and/or believe will add value to you, our readers. Read more about our commitment to providing quality product recommendations.