S.O.’s Salaries --- A Drive Down Peachtree Dunwoody Rd (Part 2)

So yesterday, I told you all about the conversation Fashionista and I had while driving down Peachtree Dunwoody Road on our way to lunch, now for the even more interesting conversation on the way back from lunch.

We had just come from a good girl gossip lunch and had discussed Fashionista’s latest beau who’s she down right giddy over – I’m most excited for her, she needed a guy she could get giddy about (she and her fiancé ended their relationship of over 5 years about 8 months ago). We were driving back down Peachtree Dunwoody Road and we passed the 7 bedroom house again and I commented that I still can’t imagine what their salary is to be able to obtain these homes. We started talking a little bit more about this and then we passed another McMansion with kids in the yard and she made the comment that she’d like to be like the mom who lives in that house.

Fashionista started talking about how she hopes to be with someone (as in married) who can support her if she chose to stay home with or without kids. She then proceeded to tell me dollar values of latest beau’s salary and bonuses. I couldn’t believe it, she and latest beau have only been dating for about a month and a half, plus its not like she’d ever even told me her salary information. I really like latest beau and I just can’t see him salary dropping without being prompted.

I was totally shocked and told Fashionista how surprised I was that she new his salary. (I was also shocked that she told me, and shocked with how much latest beau made, I think I’m going to become a consultant too. j/k about becoming a consultant) I asked her if she’s asked him that information and she said she had in a round about way. They both have talked about their salaries and their future salary potentials especially since they are in the same field.

I joked with Fashionista about what she does she do on the first date say “so what’s your salary so we can go ahead and schedule this second date?”

Fashionista said “No, that’s not it, we just talk about stuff and it would work its way into the conversation. Come on you can’t tell me you don’t know salary.”

“Umm…no we’ve never discussed salary, I could probably take a good guess because of the type of work he does and the fact that he works for the government but I’ve never asked and he’s never volunteered.”

Fashionista was shocked, how could I be dating him and not know his salary. I told her I knew the more important stuff, like the type of person he was, his life goals, how compatible we were and financial goals (not in terms of dollar amounts).

Even though we haven’t talked about salary I guess we have crossed a little into “taboo” IMHO financial items such as net worth. I have a ballpark idea of that his net worth is, but that’s because we talk about investments, savings vessels, and future goals. He’s never told me a dollar figure and I’ve never told him a dollar figure. I’m sure he has a ballpark idea of what he thinks my net worth is but I bet he’s deflated it a little. In fact I think he’d be shocked to know what net worth I do have, I’m sure he’s thinking I probably have a net worth of half or a quarter of what I have because I’m only a few years out of college and he knows I put myself through school where as he’s been out of college for about seven years.

I’m not sure if I’d even want to know his salary. At this point, how would that change our relationship if I new his salary. I suspect he makes a good bit more than me (I’m guess around 20% more) but I really don’t know. What if I make more? I’m not opposed to that, I know if Mr. Be-Mine and I have a future that eventually I’d probably make more than him, just because I work in private industry and I still have a lot of room for advancement where as Mr. Be-Mine after his last promotion topped out and has no where else to go on the career ladder without changing jobs.

What do you think? When should you divulge salary and net worth? After you know does it change things?

PS Check out Living Almost Large’s blog, on the right hand column she has informal poll results as to when you should divulge this info.

The Future Millionaire Glossary

Editor's Note: Originally Posted on 3/12/08. One reader emailed and suggested I link the glossary terms to posts so here it goes...(ps I've not linked to every article these terms are referred to in, but I have tried to link some of them to the most "interesting" - hope it helps). I'll also try and update this as I go along.

Original Post:
I’ve received a few emails from readers about my ling-o and asking who/what some of the names I used as well as some back story of some of the people I talk about. So I thought I’d take a few minutes and give you the Future Million Glossary. Hope you enjoy! Let me know if there are any other terms that need to be added to the glossary.

ATL: Abbreviation for Atlanta, a large city of over 5 million located in Georgia. This was the home of Future Millionaire until accepting a “lateral growth move” that transferred her to V-town. After the completion of FM’s current job in April of 2008 she will be moving back to the ATL.

Big Daddy: A co-work of FM who she really likes for his wacky sense of humor and straightforward manner, named for recently becoming a father to a beautiful baby boy. FM was shocked to recently find out that Big Daddy and his wife, Big Mama, are in debt.

Big Spender: Also referred to as slacker (yeah yeah yeah - FM should really keep consistent terminology). Big Spender / Slacker is a co-worker of FM. From the posts about this person you can probably gather that he’s not her favorite person. Big Spender is in major debt and complains about it all the time and yet he fails to take any action to correct this.

Car Enthusiast: One of Future Millionaire’s long time friends. He also went to college with FM and is like a girlfriend to FM and The Councilor. Car Enthusiast is like the brother FM never had, oops wait FM does have two brothers, well like the third brother FM never had. PS Ladies he’s not gay, in fact he is single and looking for the right lady. Recently, the Councilor and FM have been on a search for the right woman for him since he’s never found the right fit – the current women The Councilor and FM are trying to set him up with is perfect for him, she just has to be convinced of it.

Cyclist: One of FM’s co-workers and an overall great guy. FM really enjoys his wisdom and patience. On a financial side he’s completely debt free, even has his mortgage paid off. FM is quite impressed with his financial “savy-ness” – not in investing because Cyclist hates the stock market, but in his ability to save and budget.

Debt: A Four letter word that FM plans never to have (with the exception of a future mortgage).

Financial Independence: FM’s goal for the future. FM see’s Financial Independence as a mathematical equation that reads: Passive Income = Desired Life Style Expenses.

Fashionista: One of Future Millionaire’s best friends. Fashionista was FM’s roommate in college and following graduation up to FM’s move to V-town. When FM returns to Atlanta, Fashionista will be FM’s roommate again. Fashionista works as a consultant for an Industrial Engineering Firm, she’s also really into fashion and high dollar items – she wouldn’t be caught dead without a designer purse and sunglasses.

FM: Abbreviation of Future Millionaire (see Future Millionaire)

Future Millionaire: The pin name for the author of Saving Savy by a Future Millionaire.

‘lil bro: FM’s youngest, younger brother who just turned 13 and lives in North Carolina. Unfortunately, FM rarely gets to see him since he lives about 14 hours away from V-town, but they exchange emails daily and when they see each other ‘lil bro likes to beat FM at a game of Wii bowling.

Mr. Be-Mine: Future Millionaire’s S.O. He first appeared in a post on Valentine’s Day and as usual Future Millionaire’s lack of creativity in naming people shined through so he was named after the Holiday. Rumor has it that Future Millionaire does not really like this nick name and is thinking of giving him a different name.

Mr. VP: FM's former Boss. A very funny guy and very knowledgeable about the industry.

My brother: FM’s older, younger brother. He currently attends U[sic]GA, which is one of Georgia Tech’s biggest rivals. My brother is studying to become an accountant so you can imagine FM’s excitement for him to graduate and start doing her taxes. Despite the geographical distance (not to mention the school alliance issue) my brother is also FM’s running partner for long races, in fact the Marathon running started due to a bet over college football pride.

My mom: FM’s dear mama, who she loves dearly and respects greatly – just not when it comes to money. My mom is a single parent school teacher who gave everything to provide a good home environment for my brother and FM.

Retirement: Something FM plans to be financially ready for in her 50’s, even if emotionally she’s not ready and keeps working well into her golden years.

Slacker: (see Big Spender)

Teach: FM has been friends with Teach for over 10 years - since freshman year of high school. Teach and her hubby are struggling to get out of student loan debt and buy their first house. Teach often overreacts to life and finances so she seeks FM to calm the waters and provide advice.

The Councilor: FM’s best gal pal. The Councilor, appropriately named The Councilor because she’s in grad school to be a career councilor, often provides the emotional side of life that FM sometimes forgets when she attacks problems in life with her engineering “get ‘er done” attitude.

V-town: Future Millionaire’s affectionate term for the city of Valdosta. Valdosta is a “small” town in South Georgia (approximately 4 hours south of Atlanta, Georgia). V-town is also the current location of Future Millionaire’s job and residence.

Everyone’s in Debt? Really?

Last Wednesday I rode back from the Hockey Game with two co-workers who I used to work in the same department with until I was transferred to Valdosta (I’ll be back working in the same department with them once I move back to Atlanta in April). One, we’ll call Baby Daddy*, is in a comparable position as I am but a few years older, the other, we’ll call Cyclist is a few decades older and is two positions higher than Baby Daddy and myself.

* Just to clarify – I named him Baby Daddy because his wife just gave birth two months ago to a beautiful baby boy. Not because he’s some deadbeat or anything.

So the three of us are riding back together, gossiping about work stuff and catching me up on all the happenings I’ve been missing while working out of town. Somehow we got away from the work gossip and on to the topic of how compared to a lot of people we were all better off – and we weren’t talking about just financially. Cyclist was talking about having an amazing wife, Baby Daddy was talking about the new baby and being a first time Daddy. Eventually we worked our way around to finances – we agreed we were lucky to have good jobs, a stable company, opportunities for advancement, and a good 401k plan. Then Baby Daddy asked if we’d ever seen CNBC’s the Millionaire Inside. Of course I have – I’m really into financial stuff, but Cyclist had not, since he doesn’t have cable so Baby Daddy explained the show to Cyclist – “People who are seriously in debt come on the show and experts try to help them change and become financially successful”. Baby Daddy talked about how seeing these people who are millions of dollars in debt makes him feel better about his lack of substantial savings. We all start going on and on about how horrible it must be to be that far in debt and I talked about how I have a really hard time relating to how you can get to that point of debt problems (in the millions people) and not realize there’s a problem and make a change. Cyclist agreed with me and added that even if you get into a thousand dollars of debt you’ve got to realize there’s a problem and do something to fix it. “So neither one of you is in debt?” Baby Daddy wanted to know. We both said no, I have no debt and Cyclist has none and even has his house paid off. Baby Daddy couldn’t believe this, and said we must be the only two people in the country who’s not in debt. This made me start thinking about if debt was the norm rather than the exception.

I further started thinking about this after a comment my mom made to me. On Saturday we were walking at the park and she was talking about her money woes and how she just can’t seem to make it all work. I love my mama and was sympathetic to her plight but seriously it’s the choices she makes for examples she has a $200 cable bill but claims she can’t find anything on TV to watch – but I digress the post isn’t about her money choices. At the end of her complaints she shrugged her shoulders and said “I guess everyone’s in debt”.

Baby Daddy and my Mom both think everyone’s in debt. Is everyone in debt, are Cyclist and I the only ones not in debt?

I know we hear statistics all of them about the average savings is negative and how the average non-mortgage debt per household is about $14,500 . But does that really reflect the typical lifestyle in America or is this just a perception that helps to promote more debt? I started thinking about what the median debt and savings could be. With an average you’ve got extreme lows and extreme highs, but the median would tell you what most people are doing. I just can’t imagine that more than half of the population is in debt (other than mortgages). I mean how are these people going to retire, how are the current retires living if not off of savings, what’s going to happen to this economy if the majority of people are in debt? It could be my perspective, and its not like people tell you they are in debt but if I quickly count up in my friends circle the couples or individuals (those who are not married) who I think have savings even if its not substantial but at least they are in the black, and that’s about 12 married couples/single people compared to about 3 couples/people that I’m fairly certain do not have any savings. Hmmm…at least in my friend group I’d say that the majority of American’s are not in debt, but then again my little survey was not scientific in the least.

What do you think, do think the majority of Americans are in debt?

Income vs. Goals in a Relationships ---- Food For Thought

Warning: This is a financial post, the appetizer (aka background) is just fluffy and coincidentally falls on Valentine’s Day.

So my mom is the type of mom who no guy is ever really good enough for her baby and for some reason is always on the look-out for someone “better” so they’ll take care of her baby in the lifestyle that my mom feels is normal (affluent). Apparently she doesn’t think her baby girl can take care of herself --- but that’s for a different post. Beyond always being on the look-out for someone else, my mom’s never really liked any guy I’ve ever dated, and a few of them were actually guys my mom set me up with – go figure! This is an ongoing issue so I do not take it to mean anything against the guy I’m currently dating and have been dating for the last year.

(Financial stuff coming soon…I promise)

So the current guy I’m dating, we’ll call him “Mr. Be-Mine” in nod to the holiday, is probably the most compatible guy I’ve ever dated, but still different enough to make life interesting. My friends even agree. One of the many ways we’re compatible is financially. We have very similar outlooks towards saving and spending. Long term I think this is probably one of the best things for a couple - love aside because that’s pretty important and can overcome most everything but finances are also very important, especially with all the studies conducted about money arguments being one of the top reasons for divorce. One article even claims that 57% of couples divorcing site money issues as the main cause.

Well even this doesn’t keep my mom from her usual “tricks” of constantly trying to find someone better for me. One of my mom’s co-workers has a son and my mom wants me to meet him. Of course I’m not going to but she still carries on and on about whoever it is she wants to fix me up with, so she’s feed me full of info about this new guy, we’ll call him “New Kid” on the Block. According to my mom “New Kid” is an investment banker and he’s in my mom’s words “bringing home the big bucks”, drives a new BMW, and recently bought his mom and dad a new plasma TV. She also has listed several other characteristics that are in line with mine including a big involvement in community service, but I won’t get into that since this is supposed to resemble a financial blog post and not some self-help girly blog post. My mom sees “New Kid” as security, but I can’t help but wonder what his net worth is like, is this guy saving or is he so deep in debt he’ll never escape. But since I don’t know and it really doesn’t matter since I’d never go out with “New Kid” I can only conjecture so let’s assume he’s at least breaking even with no consumer debt but isn’t aggressively savings for long term goals.

So here’s the financial question that I’m wanted to bring to you all to ponder:

Would it be better to be in a long term committed relationship (like marriage) with someone who is on the same page with you regarding your views on money and your financial goals but who’s income will never peak much beyond what it currently is or someone who doesn’t necessarily share the same goals and views on money but apparently has a large income and who’s income potential is enormous?

All things including finances aside, I already know what I’m doing between “Mr. Be-Mine”, my mom and “New Kid”. But the question is definitely good food for thought.

What’s your thought on my financial question?

Judging The Jones’ Money Moves

I dropped off my car today to get detailed for the very first time ever. (I have owned the car since 2004). I am most excited about this and have been looking forward to it for months. In fact I’ve been wanting to do it for quite a while but always felt it was too expense, so in November I decided what the heck its worth it because in a way its also a form of car maintenance and started saving for it. Since then I’ve saved more than enough to have my car detailed.

When my car was picked up at the jobsite today to get detailed one of the guys I work with made the joked that apparently I’m getting paid too much to be able to afford these luxuries. He went on and on about how broke he is and how much he would like to be able to afford the same luxuries.

So this guy, we’ll call “Big Spender”, continues to rant on and on about how its not fair that I can get my car detailed. Well I know “Big Spender” makes more money than I do because I do the GC’s and cost analysis every month so I know roughly what his costs ( salary and benefits) to the project are per month. But despite making what in my opinion is a pretty nice salary, he always talks about how broken and in debt he is. And I can’t help but feel sorry for him, especially when he talks about how he “can’t” save for retirement because his bills are so high and that retirement is a luxury for people with money. I don’t feel sorry for him that he “can’t” save, what I feel sorry about is that he doesn’t get it, he refuses to change his spending habits. And in my humble opinion retirement isn’t a luxury for people with money, it’s a comfort for people who allocate their resources effectively and prioritize their future over their present over-spending. And while “Big Spender” doesn’t spring for “luxuries” like getting his car detailed once in 4 years and savings for retirement like I do, he does blow money like crazy on random knick-knacks, high dollar electronics, DVD’s, and credit card interest. For super bowl weekend he sprung for a brand new High-Def LDC TV, and I know that bad boy had to have been at least 40, that’s right four-zero, times more expensive than detailing a car. If you ask me he’s making a choice and that choice is that he doesn’t value the same “luxuries” that I do.

Choices --- that’s what life and personal finance come down --- priorities and choosing what’s important to you.

Well I’m off to enjoy my newly cleaned car.

How Much to Spend to Buy a Car

The other day I was having dinner with one of my good friends and knowing that I'm into personal finance, he sought my advice about buying a car.

My friend, "Car Fanatic", has always been a big car enthusiast, in fact he's the only one I know who every month goes to a different car show. However, ever since I've know him he's always driven the crappiest car of the group. (Keep in mind I've known him since we were freshman in college -- so most college students, or at least the one's based in reality, drive crappy cars). Anyway he used to drive a 1981 Mitsubishi and then about two years ago when he graduated from college he upgraded to a 1992 Honda Civic. Well now "Car Fanatic" is looking to get a "real car" in his words and now that he's financially stable wanted my advice on what he could afford.

I know he was looking for something like "$20,000 max" or "no more than $250 a month" or any other solid dollar figure. I'm usually rather opinionated and am always willing to contribute my two cents and sometime even twenty-five cents, so "Car Fanatic" was taken back when I said that I really couldn't give him a firm answer and it really depends on him. He said no, Future Millionaire, seriously what can I pay a month for a car payment?

First off the idea that he has to finance it, doesn't sit well with me, especially since I know he paid cash for his other two cars. But none the less, I'm not one to judge (okay I take that back, I judge but tell myself I shouldn't). So the best advice I could give him was:
It really depends on how much you value a car and what you're willing to sacrifice for it, for example would you rather have a rockin' ride or be able to go to a nice dinner with friends every week? etc. In the mean time while you're figuring out how much you value a new car, you should start playing house by setting aside whatever amount of money you feel you can a) afford and b) would align with a car payment for your future car. And play house for several months (at least 4-6) to see if this is a realistic amount of money and on top of that when you go to buy your call you'll have a nice down payment already set aside.

On top of that I advised "Car Fanatic" to avoid at all costs going into a dealership when he was ready to buy a car with the attitude that he could only afford X amount of dollars per month as many times they will fluctuate the interest rate and length of load based on this information instead of dealing strictly in the lump sum price of a car. With an attitude of money per month the dealership can really end up having you pay more for a car than you were ever intending.

Well that's my 2 cents on buying a car, and my no means am I an expert car buyer so for your used I've listed several good car buying advice articles that may be of help:
Edmonds.com --- check out the real price of cars
Inside Car Buying Secrets
How Stuff Works : Buying a Car
Car Buying Tips