“Enough is as good as a feast” – Rooster Cogburn, True Grit
Ideally a truck loaded full with money backs up to your house every day. For those of us that don’t begin each morning by shoveling piles of gold coins off our doorstep we need to set our sights a bit lower and focus on enough. Let’s look at all the things that make a job financially rewarding beginning with salary or wages.
In terms of whether a job is financially rewarding it doesn’t matter if you’re paid a yearly salary or hourly wages. The most important factor is if you are paid enough to reasonably cover your expenses. Be sure to include any bonuses, tips or other cash payments.
Point of reference: big-spenders and masters of frugality alike might passionately disagree with the concept of ‘enough is enough’. On the spendthrift end of the spectrum symptoms include maxed out credit cards, debt consolidation loans, or trying to not just keep up with, but surpass the Joneses. Contrast that with cupboards full of Ramen noodles and clothes with patches sew onto patches, which might be signs you have veered away from a reasonable mid-point to the miserly side of too frugal. If so, consider the possibility your job might not be your biggest financial challenge. Take with a grain if salt and adjust accordingly.
Step #1 – Rank Your Base Wage. Ask yourself if this job pays a livable wage and rank it 0-5?
- It doesn’t come close to meeting expenses. You need more than one job to come close to keeping up.
- It doesn’t quite cover the bills, but you can just scrape by with a little help from friends/family/foodbanks/foodstamps/charities.
- Bills are just covered, but there’s not enough left over to build an emergency fund, or fund retirement accounts. One major unexpected expense would ruin it all.
- Monthly expenses for a comfortable, but not extravagant lifestyle, are covered plus enough to create an emergency fund, slowly build savings, and contribute a little to retirement.
- Monthly expenses are easily covered, you have an emergency fund, and your retirement accounts are fully funded.
- More money than you know what to do with!
Salary or wages are where most people stop thinking about the financial rewards of a job but there are other ways a job can contribute to your financial well being. This will involve an assessment your job’s benefit package and plans. Does your employer offer any benefits at all? Are they commensurate with the marketplace? Do they add value or give you peace-of-mind? How about profit-sharing? From company to company, benefits vary wildly. Assess below.
Step #2: – Ranking your benefits. Are yours any good?
- Nothing.
- At least the pay check is on time and a little paid time off.
- Acceptable health insurance for yourself, at least two weeks of paid vacation a year.
- Good health insurance for you and your family that includes dental and vision, more than two weeks of paid vacation per year, a small 401k or other retirement plan contribution match, small equity (stock) awards in the form of options, grants or RSUs.
- Excellent health (including vision and dental) and life insurance for you and your family, four or more weeks of paid vacation per year, paid cell phone, internet, or other perks, more than a 3% 401k or other retirement plan match. Small bonuses. Reasonable equity (stock) awards in the form of options, grants or RSUs.
- Excellent health and life insurance for you and your family, good vacation, paid tuition, company subsidized discounts, company provided car, 401k or other retirement plan contributions matched at the legal limit. Large equity (stock) awards in the form of options, grants or RSUs. Large bonuses.
There are also non-monetary forms of compensation you might consider such as job training, subsidized meals, etc. Think about all the ways your current job might save you money you would otherwise have to spend.
Step #3 – Non-monetary Benefits
- Nothing. Nada. Zip. Zilch.
- There’s free coffee in the breakroom.
- The receiving department will sign for packages.
- In the hospitality industry you might get free meals at work. In the automotive service industry you might be allowed to use the shop off hours.
- Onsite day-care. Free postage. Company provided software for personal computers. Free EV charging.
- Free cafeterias on-site. Company provided dry-cleaning.
Give yourself 3 points for each rank in step 1, 2 points for each in step 2 and 1 for step 3. Multiply the result from each step, add them up and divide by 6. (This being the financially rewarding step a little math seems appropriate, but don’t worry, there’s a handy-dandy calculator below).
Example:
Stephanie works in an accounting office that barely pays enough to cover basic expenses (Step 1: 2 out of 5), but does have reasonable health care and an excellent 401k plan. (Step 2: 3 out of 5), one of the CPAs will prepare her taxes each year and they provide a bus pass (Step 3: 3 out of 5)
Step one: 2 * 3 = 6
Step two: 3 *2 = 6
Step three: 3 * 1 = 3
Total 6+6+3=15
Divide by 6: 15/6 = 2.5
Stephanie’s total score of 2.5 is below average, but better than the score of 2 that her initial rank of just base wages would seem to indicate!
Drag the slider to score each category
Base Wage Score:
Monetary Benefits:
Non-Monetary Benefits:
Total Financially Rewarding Score: