I had lunch with our new HR/recruiter person at work the other day. In addition to wanting to get to know her since she’s new to town I had a few questions for her of course 🙂 . What I learned about our job over the course of our lunch was extremely helpful. For example, I’m not sure I’ve mentioned this before, but my pay structure at this job is unlike any I’ve had before.
Previously I was given a set salary and that was it. In ad agencies they don’t really give you raises or bonuses so that wasn’t ever expected. I did receive $1,000 from one of my ad agencies because I planned the company holiday party (which I did the next year as well without payment 🙂 ).
They told me not to tell anyone about it. Since I am a strong believer in financial transparency I totally told people. You shouldn’t tell your employees not to tell others when they get a raise or a bonus. I understand why companies do it – to keep them in complete power – but how about we actually pay people fairly so they are not angry when they hear a colleague got a raise or bonus and are instead happy for them? I’m getting off topic. The lack of transparency in most aspects of the American jobs could take up multiple books.
At my new job (should I call it new when it’s been 4 months?) I have a base salary of $90,000 and receive an “on-target” bonus of $10,000 that’s paid quarterly. In addition I could receive an additional $5,000 bonus if I go above and beyond in my job. Unfortunately bonuses are taxed much more heavily than income so these bonus amounts are basically cut in half after taxes, BUT I originally didn’t count on either of these. I wasn’t sure what an “on-target” bonus was (despite having asked my boss who said on-target=doing your job) and the additional bonus seemed so ambiguous that I just let them both go.
During this lunch this woman told me that actually the on-target bonus is always given unless someone is on a performance improvement plan. Lightbulb! So it sounds like I’m getting a bonus and my overall salary (pre-tax) will be $100,420 which means I beat my partner in our little salary competition! MWAHAHAHA!!! The $420 comes from a $50 monthly stipend we receive in addition to our paycheck for our phones. Since my phone only costs $15 a month the difference is getting paid to me in addition to my base salary. While thinking about beating my partner (before he gets ANOTHER raise anyway – I swear that boy seems to ask for and get one every six months) I was shocked by how little this phased me. Any additional money used to make me ecstatic so I could increase my savings rate and decrease my time to retirement – even just a little.
This lack of reaction is the best example I have that after a certain point additional money doesn’t make you any happier, after about $75,000 according to a Princeton study. So we’ll see if I get this bonus at the end of the month. We’ll see if I feel a thrill as I update my spreadsheets with more money than anticipated. My original savings rate for this year was 75%. With the on-target bonus it would be 77%. Pretty sexy. I’m approaching Frugalwood levels there.
In the meantime I’ll keep thinking of ways to make sure I’m enjoying life instead of just waiting to be retired. Life won’t be much different (compared to me working from home right now) so I need to learn how to live life separate from the constant goal of retirement.