*UPDATE* Help me evaluate this job offer!

[ROY2007]

Thank you all for your input and advice. I came back with $49k and they took some time to think about about it, but I couldn't get them to budge on their offer of $44k. They sighted the fact that this was an entry level position and they were already extending themselves about $3k beyond their typical hiring range. Although I'm disappointed they wouldn't move, I'm ecstatic about having the 10 hours of commute time back each week. Thanks for your help!

Hey Mustachians!

I got a new job offer about two hours ago and I need a mustachian prospective. I'll give you some background on my situation and then I'll tell you about the jobs.

Quick Stats:
Cheeseheads from Wisconsin
Mid 20's
Married
No Kids
Wife - Teacher $35k (half mile commute)

Assets:
Home -         $180k (per zillow)
Car 1 -        $2k
Car 2 -        $5k
401k -         $18k
403b -         $4k
Wife's IRA -   $3k
My IRA -       $3k
Cash -         $11k

Total Assets - $226k

Liabilities:
Mortgage -     $133k

Net Worth-     $93k

Monthly Expenses: $2,700

Ok here are the job offers. I am currently employed under one of these options, but I won't tell you which one just yet.

Job#1
Description: Corporate Finance for a large retailer
One way commute: 12 miles by car then 18 miles by bus (approximately an hour each way)
Salary: $51k
Benefits: 401k match up to 5%, various other benefits that come with working for a big company including a discount on the items our company sells which saves us about $500/yr in necessaties.

Job#2
Description: Credit Analyst for a local bank
One way commute: 5 miles by car (approximately 10 minutes each way)
Salary: $44k
Benefits 401k match up to 2%


I think I hit all the major factors. We're hoping to retire and work part time in our mid to early 30's. From a Mustachian perspective what would you choose? Obviously Job #2 has a bikeable commute but does the difference in salary and 401k benefits make Job #1 more attractive for someone trying to retire early? Let me know if you have any other questions. Thanks for your help!

[MooseOutFront]

Just a wild guess, but I'm betting that bank has an ESOP or some form of profit sharing that you're leaving out.  Also health insurance costs between the 2 should be figured, especially if for more than just yourself.  If an HSA then one or both may throw a match at that too.  Also what about bonuses?  I would assume both places have them.

As a former Credit Analyst, I can speak to the demand for experienced ones.  Pay is never all that high, but your ability to go find another job at another bank anywhere is high.  We have a hard time finding them at our bank.

I would lean toward the shorter commute, but the $7k pay difference plus lower 401k is painful.

[CommonCents]

What are promotion possibilities? 

How do you like the work/people (coworkers, boss)?  Intangibles affect job satisfaction quite a lot.

How much are commuting costs for your job for the further away place?

Can you negotiate offer 2 up any?

[COlady]

I'm guessing you're currently at job 1 and trying to decide whether to move to job 2? You're very early in your career and I'd say you need to have some kind of idea of the direction you'd like your career to go in.  These two jobs are totally different.  I would think job 2 would be a step down from job 1, but since you didn't say which job you're currently at it makes it hard to analyze.  I work in corporate tax and the individuals in corporate finance do really well in our company. 

I guess I'm not gathering how you're hoping to "retire" in your mid 30's...unless you plan on not having much savings or you're planning on hitting it big in the finance world in the next 8-10 years. Maybe my priorities are different though...

[ROY2007]

Just a wild guess, but I'm betting that bank has an ESOP or some form of profit sharing that you're leaving out.  Also health insurance costs between the 2 should be figured, especially if for more than just yourself.  If an HSA then one or both may throw a match at that too.  Also what about bonuses?  I would assume both places have them.

If there is an ESOP or other profit sharing it wasn't mentioned in the bank's benefits package. We are on my wife's health insurance through the school district so it doesn't factor into this decision. The corporate finance job does not offer bonuses (at least not in this sales environment) until you reach a director level.

[geek101]

Don't forget to factor in your time/cost of commuting. Just the car expenses at an IRS rate of .56 cents a mile for Job 1 is $3,225.60 per year (add your bus fair yearly to this). And that's just hard cost, let alone your hour each way lost. If you value your time at your hourly wage of ~$24.52 (for job 1), you'r losing $50 worth of time every day as well ($12k a year).

Job 2 would be $1344 for commuting costs (assuming you drive and not bike), and significantly less time loss. At an hourly wage of ~$21.15, you are only losing ~$7.05 worth of time every day (~$1700/year). If you biked obviously your time cost would be higher but you'd save on the hard cost of commuting by car.

Totals
Job 1: 51k - 3225.60 - 12k = $35,774.40 without bus cost
Job 2: 44k - 1344 - 1700 = $40,956

That's not factoring in the higher 401k match of Job 1 though. A quick calc says ~$2550 matched at Job 1, vs just $880 at job 2. With that factored in you can clearly see that commuting (at least in year 1) is not worth it for Job 1 from a purely monetary standpoint. 

However it might be worth it if you have a higher probability at advancement and raises at Job 1 than Job 2.

And all of this is not considering the differences in work environment, actual work, etc.

But by the numbers based off data available now (assuming no difference in potential for advancement) Job 2 is the clear winner in my eyes. It's a higher 'effective' take home pay and you have an extra hour and forty minutes every day to spend with your family (or side hustle!)

[rmendpara]

Ignoring compensation, which is the better job to help you reach your professional/personal goals?

$7k base is a significant % today, but peanuts in terms of your career (flexibility, options, resume building, etc).

[FarmerPete]

If job 2 is the new job, I'd try to negotiate.  You've already got a job, so what can you lose?  Personally, I wouldn't quit my current job unless it was a clear cut winner.  You didn't mention other benefits like vacation &  sick time.  I would take a good look at the health insurance.  You may not need it today, but if your wife ever wanted to quit/change jobs, you might want a fallback.  Also, if you aren't using the health insurance, see if they will give you a bonus for not using their health insurance.  It might help them in deciding to give you a bigger starting salary.  How much do you spend on the bus each day/week/month?  How would getting that hour of your day back change your life?

[ROY2007]

What are promotion possibilities? 

How do you like the work/people (coworkers, boss)?  Intangibles affect job satisfaction quite a lot.

How much are commuting costs for your job for the further away place?

Can you negotiate offer 2 up any?

Promotion possibilities are probably somewhat limited in Job #2 because it is a smaller organization, but there are lots of other banks in the area so I may be able to jump to a promotion with a different company after mastering this role. Promotion possibilities in job #1 may be better in the long term, but I'm not looking to have a 25 year career. Current boss is ok, doesn't really like to delegate our empower her team to make decisions which makes my job feel somewhat pointless. Commuting costs me roughly $3,000 per year. I can try to negotiate offer #2 but they did say they were pretty firm with that number because it is an entry level position, but I would still like to ask for a little more.

[COlady]

Just a wild guess, but I'm betting that bank has an ESOP or some form of profit sharing that you're leaving out.  Also health insurance costs between the 2 should be figured, especially if for more than just yourself.  If an HSA then one or both may throw a match at that too.  Also what about bonuses?  I would assume both places have them.

If there is an ESOP or other profit sharing it wasn't mentioned in the bank's benefits package. We are on my wife's health insurance through the school district so it doesn't factor into this decision. The corporate finance job does not offer bonuses (at least not in this sales environment) until you reach a director level.

Why doesn't insurance factor into the decision? A prospective employer may have the same or better coverage for cheaper. When your spouse gets a new job this is a qualifying event which allows you to move to the other spouses insurance if it's better.

[CommonCents]

What are promotion possibilities? 

How do you like the work/people (coworkers, boss)?  Intangibles affect job satisfaction quite a lot.

How much are commuting costs for your job for the further away place?

Can you negotiate offer 2 up any?

Promotion possibilities are probably somewhat limited in Job #2 because it is a smaller organization, but there are lots of other banks in the area so I may be able to jump to a promotion with a different company after mastering this role. Promotion possibilities in job #1 may be better in the long term, but I'm not looking to have a 25 year career. Current boss is ok, doesn't really like to delegate our empower her team to make decisions which makes my job feel somewhat pointless. Commuting costs me roughly $3,000 per year. I can try to negotiate offer #2 but they did say they were pretty firm with that number because it is an entry level position, but I would still like to ask for a little more.

If you can't negotiate the entry salary, try to negotiate a review and bump after you've been there 6 months (instead of at the year mark).

But as noted above, you likely want to consider what direction you want to take your overall career more than the dollars and cents here.

[ROY2007]

How about taking Job #2 with a salary of $55k or more? Tell them you'd love the job but you can't justify the paycut, but it would be a shame for the deal to fall apart over such a small difference, isn't there anything they can do? etc.

Same job at $55k would be nice, but I don't have any direct credit analyst experience. It's an entry level position and they claim they usually hire in the $38-41k range for this role. From their perspective I think they believe they're giving me a strong offer. I've heard about negotiating other things like vacation, but there's already plenty of bank holidays. I'm interested in asking for more in the base salary, but they prefaced the offer with "we are pretty firm at this number" so I'm not sure if there is much wiggle room.

[ROY2007]

Also, if you aren't using the health insurance, see if they will give you a bonus for not using their health insurance.  It might help them in deciding to give you a bigger starting salary.

I've never heard of a company doing this, but that doesn't mean it isn't true. Have you heard of a company doing this?

[ROY2007]

Ignoring compensation, which is the better job to help you reach your professional/personal goals?

$7k base is a significant % today, but peanuts in terms of your career (flexibility, options, resume building, etc).

Good question. I think I'm still trying to figure that out.  I'm pretty confident that corporate finance with a large company isn't something I feel very passionate about. I like the idea of potentially being able to have a bigger impact at a smaller company which is drawing me to job #2 from a career perspective.

[ROY2007]

What are promotion possibilities? 

How do you like the work/people (coworkers, boss)?  Intangibles affect job satisfaction quite a lot.

How much are commuting costs for your job for the further away place?

Can you negotiate offer 2 up any?

Promotion possibilities are probably somewhat limited in Job #2 because it is a smaller organization, but there are lots of other banks in the area so I may be able to jump to a promotion with a different company after mastering this role. Promotion possibilities in job #1 may be better in the long term, but I'm not looking to have a 25 year career. Current boss is ok, doesn't really like to delegate our empower her team to make decisions which makes my job feel somewhat pointless. Commuting costs me roughly $3,000 per year. I can try to negotiate offer #2 but they did say they were pretty firm with that number because it is an entry level position, but I would still like to ask for a little more.

If you can't negotiate the entry salary, try to negotiate a review and bump after you've been there 6 months (instead of at the year mark).

Good point. I have heard of this. Part of the offer that I should have mentioned was a "review after 90 days with the opportunity for additional compensation". Unfortunately, they couldn't give me any perspective on if that could mean a 1% raise or a 10% raise.

[ROY2007]

By the way, you have to sound like you're prepared to walk away if they don't come up with more money. If you've dropped any hint, either in your language or tone, that you will accept their current amount, they aren't going to offer more.

I don't think I did. I asked a few clarifying questions, thanked them for the offer, told them I was definitely interested, and asked when they need my answer. They do know that this move would be a pay cut for me in terms of base salary.

[ROY2007]

Totals
Job 1: 51k - 3225.60 - 12k = $35,774.40 without bus cost
Job 2: 44k - 1344 - 1700 = $40,956

That's not factoring in the higher 401k match of Job 1 though. A quick calc says ~$2550 matched at Job 1, vs just $880 at job 2. With that factored in you can clearly see that commuting (at least in year 1) is not worth it for Job 1 from a purely monetary standpoint. 

However it might be worth it if you have a higher probability at advancement and raises at Job 1 than Job 2.

And all of this is not considering the differences in work environment, actual work, etc.

But by the numbers based off data available now (assuming no difference in potential for advancement) Job 2 is the clear winner in my eyes. It's a higher 'effective' take home pay and you have an extra hour and forty minutes every day to spend with your family (or side hustle!)

Thanks for your perspective. The time I waste on the bus and in the car is over 9 hours a week, so I can think of plenty of ways that I would rather spend my time. You can always get more money but you can never get more time, right?

[ROY2007]

Just a wild guess, but I'm betting that bank has an ESOP or some form of profit sharing that you're leaving out.  Also health insurance costs between the 2 should be figured, especially if for more than just yourself.  If an HSA then one or both may throw a match at that too.  Also what about bonuses?  I would assume both places have them.

If there is an ESOP or other profit sharing it wasn't mentioned in the bank's benefits package. We are on my wife's health insurance through the school district so it doesn't factor into this decision. The corporate finance job does not offer bonuses (at least not in this sales environment) until you reach a director level.

Why doesn't insurance factor into the decision? A prospective employer may have the same or better coverage for cheaper. When your spouse gets a new job this is a qualifying event which allows you to move to the other spouses insurance if it's better.

Good point. I shouldn't say it doesn't factor into the decision but it isn't front of mind. From what I understand healthcare for government employees is often better compared to the private sector. However, my wife and I could and should do more research on her healthcare benefits/options.

[ROY2007]

How about taking Job #2 with a salary of $55k or more? Tell them you'd love the job but you can't justify the paycut, but it would be a shame for the deal to fall apart over such a small difference, isn't there anything they can do? etc.

Same job at $55k would be nice, but I don't have any direct credit analyst experience. It's an entry level position and they claim they usually hire in the $38-41k range for this role. From their perspective I think they believe they're giving me a strong offer. I've heard about negotiating other things like vacation, but there's already plenty of bank holidays. I'm interested in asking for more in the base salary, but they prefaced the offer with "we are pretty firm at this number" so I'm not sure if there is much wiggle room.

Every company ever is going to tell you they are paying above their usual range for the role. You can usually assume it is not true. And "pretty firm" is not the same as "firm". In fact, if anything it explicitly suggests they will give more.

You might want to approach it with "I know you said the base salary is pretty firm, but it would be a shame for this deal to fall through over only a $10k difference. I'm really excited about the job and I think I would make a great member of your team, but I can't accept a $10k paycut. Is there anything you can do to close this gap?"

Then maybe they'll meet in the middle and say, "Well, we talked to the (nonexistent) compensation committee, and they say we can find room for $49k in the budget."

Then you can say, "Hmm.. 49 and 51 are so close, it would be a shame for this to fall through over 2k ..." etc.

I'll let you handle the details. :P

Thanks for your help! You're right, I think them saying "pretty firm" does mean they have some wiggle room. I am really interested in this opportunity so I don't want to piss them off and have them retract the offer. Do you think I should be worried about that?

[MooseOutFront]

Here is a great blog post about salary negotiation:
http://www.kalzumeus.com/2012/01/23/salary-negotiation/

[geek101]

Thanks for your perspective. The time I waste on the bus and in the car is over 9 hours a week, so I can think of plenty of ways that I would rather spend my time. You can always get more money but you can never get more time, right?

Exactly. You've got 24 hours a day to spend and that's it. Your 'time value for money' might not be your actual hourly wage, but don't sell yourself short. Your non-work time is valuable too even though it's a 'soft cost' (you don't physically lose that money). Just keep that in mind.

There was a website that I can't seem to find that asks you some questions about how long you would wait in line for a deal, what someone would have to pay you to work OT, etc, to calculate your 'time value of money' but I can't find it.

For instance, would you wait in line at a store for an hour to save $15 on a regular purchase? If so, you value that hour at $15 or less, if not, you value that hour more than $15.

Just don't sell yourself short on the value of your free time, it isn't free.

[CommonCents]

Also, if you aren't using the health insurance, see if they will give you a bonus for not using their health insurance.  It might help them in deciding to give you a bigger starting salary.

I've never heard of a company doing this, but that doesn't mean it isn't true. Have you heard of a company doing this?

I have heard of companies doing this.  Two friends (in different parts of the company country) take advantage of it.  My company offers it but it's not worth it for me to do it (husband's company charges more for me being on than I would get.  Husband's company gives health insurance to spouses only if they are not working)

[MooseOutFront]

Cathy I feel like you're giving great salary negation advice here.  How do you feel about trying this negation by email?

[countdown]

I work in hr and have retracted an offer based on wildly off-base counter. So, think clearly about how hardball you want to play this. Other hand, never been bothered by a reasonable counter, and usually had it approved by hiring mgr.

[ROY2007]

Thanks for your input everyone. I included an update above.