Professional Confessional

A blog providing tips and resources for life after college

2014 March

Apartment Hunting – The Decision

Selecting an apartment is an important decision. It will be your home for the next few years. You will be signing a lease agreement binding you to the property. Be confident it is affordable, the apartment you want, and the community you want to call home.

Here are 3 things to consider during phase 2 – The Decision:

1) Submit your application.

Once you find the place and it’s within your budget, apply. Most applications will ask for the following: personal information; employment history; current and previous residence (within the last five years); vehicle information, personal references; credit information (bank and credit); and general background information.

a. Gather documentation. You may be required to submit: photo identification; letter of employment verification (3 recent pay stubs, W2, or letter from the employer); verification of prior residency (addresses from the last five years); and recommendations/references.

b. Check your credit. Management companies will be checking your credit once you start applying. Before they check, you want to know if you have good credit or a few blemishes. Therefore, you will be prepared to explain your poor credit and ask a parent/relative to serve as a co-signer on a lease. Receive a free credit report from Annual Credit Report.

2) Understand your lease agreement.  

Read it carefully. Don’t just sign on the line. Your lease is a contract, so make sure you understand it. Your lease should clarify the rent, terms and duration of your agreement, the penalty for breaking the lease early, the policy for fixing issues with the apartment, how much notice you must give if you want to renew and the rules for getting your security deposit back. If you give a deposit, get a receipt. Often, if you have issues with certain points on the lease, you can alter or discuss them with the management company before signing.

3) Conduct a walk-through.

Thoroughly inspect the apartment before moving your belongings into the space. Take notes to document pre-existing problems you find, so that you are not held liable. Test everything – the stove, oven, faucets, refrigerator, lights, etc. If anything is amiss, write it down. If the management company needs to fix something, get it in writing. This is the best way to protect yourself, your future home, and your security deposit.

Once you are settled in the apartment, start building your community.

Visit the blog next week for tips on Finding Community in a new city.

Apartment Hunting – The Search

You’ve accepted the job. Congratulations! Now, you need to find a place to live. Apartment hunting can be a daunting task. If you are searching for your first apartment in a new city, then it can be especially nerve racking. It is important to start planning and searching now before you graduate.

Typically, there are two phases to apartment hunting: 1) The Search and 2) The Decision.

Here are 3 things to consider during phase 1 – The Search:

1) Determine your budget.

First, you need to know how much you are making per month minus taxes and the monthly expenses (e.g. student loans, utilities, phone plan, etc). This will help you determine your price range. Many real estate agencies require proof of monthly income to secure an apartment; additionally, higher-priced locations may only accept candidates who make over a certain income. Do not consider apartments out of your price range.

a. Use one of these simple formulas:

Divide your monthly take-home income by 3. For example, if you take home $1,800 a month after taxes, you could afford a place that costs up to $600/month. ($1,800/3 =$600)

Divide your annual gross income (before taxes and other deductions – See post: Dissecting Your Paycheck) by 40. For example, if you make $40,000 a year, you could afford a place that cost up to $1,000/month. Either formula will give a rough estimate of your maximum budget. ($40,000/10 = $1,000)

b. Consider having a roommate. You will save on rent and utilities. Perhaps, you can share groceries too.

c. Start saving. Now! You will need money to pay application fees, a security deposit and the first and last month’s rent. You may be charged for credit checks during the application process. The management company will hold a security deposit which is refundable when complete your lease and move. If there is damage to the apartment, they will keep the deposit. Also, some companies require the first and last month’s rent. This could be several hundred to a few thousand dollars. You will need to move your personal affects to the new city. The move itself can cost between $200 and $2,000 depending upon the distance and how much you do yourself (e.g. rent a truck). These expenses can be equivalent to three month’s rent.

2) Shop and Compare.

You want to compare your needs versus wants. Make a wish list. Balcony? Pool? Near greenways or parks? What are your must-haves versus nice-to-haves? Remember, this may be your home for the next few years. Ensure peace of mind by comparing prices, options, and locations before taking the plunge.

a. Find a neighborhood. Drive or walk around the different parts of the city where you might like to live. Consider commute times, your lifestyle needs and local conveniences. Be realistic. Increase your options by researching the average cost for a 1-2 bedroom. At least 33% of the listings in the neighborhood of choice should be within your budget. If it is less, then you will have limited options. Are you going to drive or will you use public transportation?

b. Deal with a reputable company. Dealing with a larger apartment management company has its advantages as well as drawbacks. One can find convenient solutions through larger companies, but one should also be careful about companies’ claims regarding tenant needs, red tape, reliability, etc.

c. Ask about vacancy rates. If an apartment building has a large number of vacant units, chances are the building is not being managed well.

d. If it’s too good to be true, bewareit probably is. 

e. Additional resources: The Internet is one of the best resources for searching for an apartment. It can give you a clear idea of what’s available before you actually go out looking for it.

Ask family and friends. Ask your network who live in the area for suggestions and advice. They have “inside” knowledge of the area. They can steer you in the right direction with your best interests in mind.

Zillow – Great resource for finding any type of real estate.

Use your Smartphone. You can use your phone’s GPS to display apartments that are nearest to your location while walking around a neighborhood that you like. Download one of the apartment search applications available for your Smartphone and use your phone to search anywhere at any time.

Google the address. Validate the location. Also, you may find some reviews on the property.

3) Visit your top picks.

Setting up a site visit with each property of choice is an important step in the apartment hunt process. You want to see and experience the property from your perspective not from what you see on the internet.

a. Tour each property. Typically, they will give you a tour of the floor plan you are seeking to rent and the main building (exercise room, pool, etc.). Observe the surrounding and recreational areas, buildings, and potential neighbors. Is the property well-maintained? Are the people friendly? Does it matter? Keep a record of each apartment you visit. Note what features are extra or missing. Take measurements of the rooms and doorways to ensure furniture fits on moving day. Turn on light switches, look inside closets, check water pressure, visit the laundry room, walk the grounds and ask neighbors what it’s like to live there. This will allow you to compare each property for a more informed decision.

b. Ask lots of questions. Who controls the heat? Are appliances included? Is smoking allowed? Are pets allowed? When is the apartment available? Will they paint before you move in? Is there a security deposit?

You’ve determined your budget, shopped and compared properties, and visited your top picks, now you’re ready to make a decision.

Come back to learn 3 additional tips for phase 2 of apartment hunting – The Decision.

 

Navigating Employer Benefits

Bethany FayWFU Human Resources Expert Contributor – Bethany Fay, Associate Director – Compensation & Benefits

Being prepared for the working world requires being ready to make many new decisions.  Where do I want to live?  What type of organization suits me?  How do I build a budget?  Some of the decisions will be made when you accept your first employment offer.  In addition to finding a new place to live and acclimating to your new job, you will also have to make some key benefit decisions during your new hire period.

The new hire period is the first 30 days of employment with your new organization.  During this time you will complete all the new hire paperwork including tax forms and benefit enrollment forms.  All the choices you make will have an impact on your take home income and the level of insurance coverage you have.  It is important to consider all of the organization’s benefit programs from a total rewards perspective instead of looking at compensation and benefits in isolation.  Paige Meltzer’s blog on Salary Negotiations is a great complement to my guidance below.  Here are some helpful things to think about when reviewing your benefits package:

1. Medical Plans

You will have several medical plans from which to choose and while they will all be good options, you will want to consider the following:

  • Staying on your parent’s medical plan until age 26 – The Affordable Care Act (ACA) allows young adults to remain on their parent’s plan until age 26.  This is a way to save money during the first few years of employment.  Make sure that plan covers the doctors in your location so you are adequately covered.
  • Prescription drugs – Understand how much prescription drug copays are in each of your organization’s medical plans so you can determine annual costs for these medications.
  • Health Conditions – Do you have any health conditions for which you need ongoing treatment?  Take care of yourself by selecting a primary care physician (PCP) and participating in annual wellness check-ups is a great way to stay healthy.
  • Use an in-network medical provider – Each insurance plans has a list of physicians that they negotiate a deeper discount with for services.  These are the in-network providers.  Always choose an in-network provider when receiving routine care.  Each insurance plan has a great search tool on their website to find providers by name, location, specialty, and gender.
  • Compare the plan choices by understanding the total cost of the plans  – Understand the total cost of the plans but evaluating the annual payroll premiums and total out of pocket for the plan (deductible and out of pocket maximum).  The annual premiums will be taken from your paycheck regardless of how much care you received but the amount you pay into your deductible and out of pocket maximum will depend on how much you use your medical plan.  It is important to understand how much you will have to pay for a catastrophic type of situation and what you will likely pay year to year for more routine care.  If you are relatively healthy, you will pay for your payroll premiums, a prescription or two, and a few office visits.  Understanding what those will cost reviewing the Summary of Coverage (SOC) document of each plan is a great idea.

2. Retirement Plans

Employee Contributions – These plans can come in many forms – 401(k), 403(b), 401(a), etc.  They all allow you to put aside money from our paycheck on a pre-tax basis which lowers your taxable income.  While you may think you need all of your paycheck to make ends meet, please consider setting aside money into your retirement plan as early in life as you can. This money will grow throughout your professional career and be a significant income resource at retirement.  The money grows tax free and you are only taxed on the money at withdrawal.  Your tax bracket is likely lower in retirement so you will be taxed less on the withdrawals then than you would be paying in taxes today.  

Organization Contributions – Many organizations will put aside money into a retirement plan on your behalf after you have been with organization for a period of time.  You will want to fully understand how this plan works so you can maximize it.  If they provide contributions only if you put a portion of your own money in, please do it.  It is free money to help secure your financial future.  It is also important to understand if the plan has a vesting schedule.  Vesting schedules allow the organization to keep a portion of the contributions they set aside for you in case you choose to leave an organization.  You’ll want to review those schedules if we are looking for another position at a future date.

3. Income Protection Plans

While you may be young and healthy now, it is important to think about the future.  You may start a family and need to think about how you are going to financially protect yourself and your family.  Take the time to understand what types of life insurance and disability benefits your new organization offers.  You may not need a large amount of life insurance early in your life but you will want to make sure you have financial protection in place if you are unable to work.  Short and long term disability insurance will assist with securing your income.  Some organizations pay for these benefits while others require you to pay for access to these plans.  These are benefits that I suggest considering when making your new hire benefit elections.

4. Auxiliary Plans

Organizations will offer a multitude of additional benefit programs including but not limited to: dental plans, vision plans, flexible spending account plans, legal plans, long term care plans, child care programs, education reimbursement plans, well-being plans, work-life balance programs, employee discount programs, and other types that fit the organization.  While you may not need these programs now, please make sure you understand what is offered so you can potentially use it at a later time.

5. New Hire Period Elections

As I stated above, you will have 30 days to make your first set of elections into these benefit programs.  Take the time to understand and make the right choices for you.  Ask your Human Resources representative which programs can be modified in the future in case you need to make any changes.

6. Annual Benefits Enrollment Period

Each year your organization will allow you to make changes to many of your benefit elections without a qualifying event (marriage, birth, loss of other insurance coverage).  This is the time to review all of your benefit elections and decide what you wish to participate in for the upcoming year.  A half hour of review can go a long way to securing the appropriate level of coverage for yourself and your family.

Please know that you are not alone if you feel overwhelmed with all of these choices.  It is a lot to understand.  The more you become involved in these programs, the more confident you will feel with your choices.  Your organization’s Human Resources department will be filled with helpful and passionate individuals who want what is best for you and while they cannot tell you what choices to make, they can answer your questions so you know you are making the best decision. 

Dissecting Your Paycheck

I remember receiving my first significant “real world” paycheck after college. I called my mom from work practically yelling what I made the first month. It was not much; I was a teacher, but excited nonetheless. So, the salary was not anything to brag about, but it was the first paycheck with a large sum of money earned in one month. Did I really understand what was in my paycheck? Or rather did I know what was being subtracted from my gross earnings? No, I didn’t. I simply trusted everything was correct and fair. Don’t be caught by surprise! Know what’s coming out of your paycheck.

Here is what you may expect to see on your pay stub/statement:

Gross Earnings – The amount you earn per pay period (monthly, biweekly, or weekly) before anything is subtracted known as before taxes (and other deductions).

Net Earnings – The amount you receive per pay period after anything is subtracted known as after taxes (and other deductions (e.g. retirement)).

YTD – This will let you know how much you’ve cumulatively earned (year-to-date) since accepting employment at the company.

FICA (Federal Insurance Contributions Act) – Funds Social Security and Medicare programs that protect our elderly. What it means for you is that in 2014, the current tax rate is 6.2% for the employer and employee to fund Social Security (12.4% total) and 1.45% (for the employer and employee totaling 2.9%) of your paycheck goes to Medicare.

Federal Income Taxes – Each tax rate applies to a specific range of taxable income, which is called a tax bracket. Taxable income is total worldwide income after various deductions have been subtracted. It varies depending upon how you file your taxes such as single, married (jointly or separately), or head of household. Below is an example of the tax bracket:

  • 10% on taxable income
  • 15% on taxable income
  • 25% on taxable income
  • 28% on taxable income
  • 33% on taxable income
  • 35% on taxable income
  • 39.6% on taxable income

State Income Taxes – The amount paid to the state in which you live which varies from state to state.  If you’re lucky, you may not pay state income tax. There are seven states without state income tax. Beware: these states make up for lost revenue by increasing state sales tax. North Carolina collects income taxes from its residents utilizing a flat tax rate.  Effective Jan. 1, 2014, individual taxpayers will pay a flat tax rate of 5.8 percent.

I encourage you to visit the state’s Department of Revenue to which you plan to move after graduation. The site will give you tax bracket information plus extra tax resources such as property tax. Did you know property tax sometimes includes pets? Yes, you can be taxed for owning dogs at least in Stokes County, NC. So, you may have to claim the number of pets you own.

Also, employers are required to withhold and pay personal income taxes on wages, salaries, bonuses, commissions and other similar income paid to employees. If you receive an annual bonus or a monthly commission, then your employer will withhold a % of earnings for taxes.

401(k)/403(b)/401(a) – The amount taken out for retirement. If you’re lucky enough to work for an employer who allows you to deduct a portion of your paycheck to start saving for that part of your life now, take it and never stop thanking them. If they’ll match a portion of your retirement savings, that’s even better. Statistically, money put in a retirement fund doubles every 8 to 10 years, meaning that money you sock away for retirement now will actually count more than money you save later. This is financial compounding.

Employer Benefits – Benefits may include medical, dental, vision, among others depending upon the employer. If you elect to participate in an employer benefit such as a medical plan, then your contribution will be subtracted from your gross pay (before taxes).

Charitable Contributions – Sometimes you can have money deducted for a charitable cause such as United Way. You can set up a payroll deduction. The money will be automatically deducted from your paycheck (e.g. biweekly or monthly).

If you notice a mistake, notify your supervisor and human resources department or accounting (e.g. payroll services) department immediately.

Don’t be disappointed when you receive your paycheck. Celebrate your first “real world” paycheck with friends, not alone with a box of mac-n-cheese. Be prepared. Be knowledgeable.

 

Preparing for Salary Negotiation

WFU Expert Contributor – Dr. Paige Meltzer, Director of the Women’s Center 

Negotiating for your starting salary can be intimidating. Few students graduating college have had experience advocating for their financial security. Many students might think it’s enough to get a good job offer in an uncertain economy. Others worry that negotiating for a starting salary can seem pushy or harm the developing relationship between them and their prospective employers.

But if you don’t negotiate for a fair and reasonable compensation package, you could be leaving money on the table. And that money compounds over the course of a working lifetime, costing you in future earnings. That compound loss disproportionately impacts women, who negotiate less than men, and contributes to the gender wage gap between women’s and men’s earnings.

It’s up to you to be your own advocate.

Being your own advocate starts when you’re looking for a job, not after you’ve gotten an offer. The key to successful salary negotiation is preparation.

1. Be well-informed and realistic about your skills, experiences, industry, and cost of living in your desired place of employment. Visit a website such as salary.com, which lets you explore different positions within different industries and provides you with salary ranges and compensation packages for those positions in your desired city. Not only will you find realistic numbers for your chosen field, you will be better positioned to speak to the specific skills and experiences that make you a competitive candidate worth a particular salary.

2. Know your bottom line. If you don’t know the lowest offer you could accept, you’re setting yourself up to accept an offer that cannot work for you in the long run. Build a realistic budget that takes into account more than your fixed costs such as rent, food, and transportation. Consider the cost of student loans, utilities, and entertainment – as well as holiday travel, a gym membership, and a savings plan. Know what you need to bring home every month after taxes to feel comfortable with the financial choices you make.

3. Negotiation does not start until you have an offer in hand. During the application and interview process, you may be prompted in various ways to share your salary expectations. Resist naming a figure. Politely deflect the question with sincere responses such as “I’ll consider any fair offer” or “I’m open to discussing any reasonable package.” Avoid writing a figure in automated application pages; use asterisks or N/A if possible. When pressed, refer to the industry range you learned during your research.

4. Know your value-add and practice talking about it. Visit the OPCD for a mock interview or ask your roommate to role-play the job offer with you. Remember that, according to your prospective employer, your salary is not about how much you need to live on, but about what you bring to the organization. It’s up to you to be able to identify and communicate your skills and experiences that will concretely contribute to the health and growth of the organization.

Once you’ve gotten an offer, take your time to evaluate it. Consider the salary offer separately from the benefits package – and then consider them together as a complete package to assess what trade-offs there might be between the two. Your prospective employer has shown you with an employment offer that she values you. Remain respectful, firm, and reasonable as you advocate for yourself and you will start your new professional relationship on solid ground.

To learn more and practice negotiating, register for $tart $mart Salary Negotiation Workshop on April 9, 5 pm in OPCD. Dinner will be provided. Brought to you by The Women’s Center and OPCD, developed by The Wage Project and AAUW.  Register for the session.

 

 

 

 

 

 

 

 

 

 

Managing Multiple Offers with Tact

School of Business Expert Contributor – Mike Crespi, Associate Director – Market Readiness and Employment, Undergraduate

You work hard, know what you want to do, you have a strong resume, you network and reach many new connections, and practice interviewing.  You apply for jobs, interview, network some more, connect, interview and suddenly, all is good with the world – you have an offer!  You analyze the role, employer and total compensation.  It’s great – you are ready to accept…

…and then another offer shows up…and they have deadlines to give them an answer, but the offers expire on different dates.

The thrill has now turned into stress – and you thought the stress was in the search!  No worries, you compare the offers and make your decision…

…but wait, your dream employer just asked you to interview.  The good news is that the interview is before you have to give an answer.

The interview went great – and you should get an answer in 10 days.  However, the other offer needs an answer in 5 days.  A great offer in hand or a dream job possibility?

You thought your stress was taken care of when you made a decision between the two offers!  Why is this so hard and stressful?!?!

Make the comparison again, only this time, it is based on how much risk you want to take.  Does the offer give you the opportunity to move towards your long range goals? You could call the employer who has made an offer and ask for a short extension with the reason that you need the extra week to make sure you are making the best decision for them and you.  But you run a risk – what if they don’t grant the extension?  You could call the dream employer and ask if they can move up their date.  But what if they can’t?

What to do, what to do, what to do…you have options.

Option 1: Accept the job in hand.  Awesome, you are done.  And then the dream offer comes.  You tell yourself, “I am going to do what is right for me!”

Hmmm, maybe…be careful – you have a personal brand.  You made a commitment to the employer and to renege on a commitment says something about you.  The world is large, but it is small at the same time – people talk.  Would you be considered trustworthy?  Dependable?  Believable?

Who else is affected by reneging on your acceptance – the University and their relationship with the employer? Your references?  Your network connections? Alumni at the employer? Another candidate who would have received an offer if you had declined? The recruiter who reported that the search for the job was closed and they had performed their job?  The recruiter’s boss?  The hiring manager?  Now they have to reopen the search and great candidates have already been declined – they cannot go back.  Someday, you could be interviewing for a promotion or a role in another organization and suddenly, you meet the “hiring manager” from the employer you spurned – that could be uncomfortable.

Option 2: Turn down the offer knowing your job search may not end with the dream employer.  How?  A professional conversation with the contact – not an email – where you discuss that you just don’t have enough time to make a decision that is in the best interest of the employer and you.  They may ask for a date that you can make a decision – be ready to give them one and it will be the last extension.  Be ready for the “sorry, but we are withdrawing the offer” and respond with “thank you for your consideration and I would like to stay in touch” (you never know, there could be another opportunity later).  Keep the communications positive and open.

If the dream employer offer does not materialize, you will work hard, know what you want to do, have a strong resume, network and reach many new connections, and practice interviewing.  You will apply for jobs, interview, network some more, connect, interview and suddenly, all is good with the world – you have an offer!