In the spring a young auditor’s fancy lightly turns to thoughts of a new job
Of the group of new hires I started with at this company, 50% are now gone (one of them was fired during the middle of busy season - we think. No one really knows what happened.). Of those one year ahead of me when I started, 50% have also left the company this year. One of my coworkers just announced this week they are switching to another firm, thus prompting this post.
I know high turnover is a fact of life in public accounting but it is a different thing to be living it first hand. Kind of scary to see how quickly things change. We will be getting a bunch of new hires in the fall, and then maybe next year we'll lose some of our first years that we hired last fall already.
In a way, it's good for those of us left behind - more work to go around. To some extent, it seems you can get ahead in the firm just by sticking around long enough. One of my professors actually did some interesting research on whether the people who end up sticking around the longest at audit firms are actually the best people to be auditors. Do the people who self-select out due to boredom, or promises of higher salaries, actually have better auditing skills than those left behind? Of course, as the last few people to "quit" were very strongly encouraged to do so, one cannot underperform and keep the job just by showing up to work every day.
The other thing turnover makes you think of are the potential jobs available out there. Are there better jobs than I currently have? How much more would I get paid if I switched firms? For me, my current firm is still proving to be a good fit for me. I could probably get myself a small pay raise by switching firms, as that seems like a way some people raise their own salaries faster, but I don't think it would be a big enough pay raise to make much of a difference at this point. Basically, all CPA firms in the city pay new hires very similar salaries, so it takes a few years for significant differences in salary levels to be created.
Any thoughts of sticking with a firm longer, vs switching jobs every few years to ratchet up your salary?
May 2012 Mortgage Update
My first mortgage payment came out of my bank account on May 1st. The required payment is $986.06 - $369.96 towards escrow, and $616.13 towards the mortgage.
For this first payment, $200.38 went to principal, and $415.75 went to interest. Crazy to see how much I'm paying in interest per month...
I rounded up to $1,000 each payment, so I am putting an extra $13.92 towards principal each month.
According to the mortgage company's "amortization estimator" my maturity date, if I make the required 360 payments, will be 4/1/2042. With the extra $13.92 with each payment, the maturity date is moved up to 2/1/2041 - so it saves me a whole year of mortgage payments.
Once my student loan is paid off, I will evaluate how much additional I will put towards paying off the mortgage.
The principal balance is now $132,824.70.
Plumbing problems
If you read my last post, you'll know that I'm facing a hefty bill to get the water line from the street to my house fixed this week. Yesterday, I was feeling more upbeat about the situation, and figuring out how I could scrounge some extra money out of Prosper (about $600), and a reimbursement check I'm expecting from work ($450), plus about $100 from Google Adsense since I finally qualify for my first payout (yay!).
But then I decided to switch plumbing companies, since the plumber I had originally wanted suddenly had time in his schedule for me when he heard I was going with a different company. After talking to my arborist, I decided we should take a more circuitous route with the pipes to avoid cutting tree roots close to the trunk. I felt like I trusted this other guy to avoid as much damage as possible to my tree, plus he quoted me a price a bit lower than the original company did for the extended route. So, my new price is $2,400 for the longer route. I was okay with that price, and felt confident that the tree was going to be as safe as possible.
But then the first plumbing company came back to me asking for $300 to cover the permit they had already gotten from the city (apparently $200 for the permit, and $100 for the labor to get the permit.) So now my total cost for this thing is going to be $2,700.
So just like that, the few hundreds of dollars that I had "found" from sources other than my emergency fund are quickly wiped out by this new turn of events.
And of course, I've learned some lessons, such as if I want to comparison shop, I shouldn't give the first company the go-ahead right away. Also, a lot of people seem to think I should "put my foot down" and refuse to pay the first company anything, but I just can't do that, because they did spend time and money on the permit, and they did agree to do the job on very short notice - which is why they pulled the permit so quickly. I realize that there are people out there who would just say no, they're not paying, and the company probably would take the hit without pursuing action, but... sigh. Can't do it.
But, I'm cooking up some black beans right now... I plan to make this my lowest grocery-spending month ever! (Well, since I started keeping track that is...)
Worst case scenario
Well, it's been a Monday...
I received my first water bill last Saturday, just over a week ago. My heart stopped for a second when I saw the charge: $350.
At first I thought, someone's put the decimal in the wrong place. So I checked the "calculate your bill" feature on the Water Department's website, and sure enough, the "usage" amount came out to $350 worth of water.
I promptly sent the Water Department an email, asking what was going on. I crossed my fingers and hoped that it was a meter-reading problem. However, they checked the meter, and let me know this morning that it was a leak. Since there is no sign of an 18,000 gallon leak inside the house, I began to suspect that my "worst case scenario" had happened far ahead of schedule - the water pipe from the street to the house was leaking.
My inspector did a great job checking out the house. Including pointing out to me that since the pipe entering the basement is galvanized metal, it would probably spring a leak sooner or later. I assumed that would happen somewhere far into the future, but it turns out it happened probably about a week after I moved in. I checked with the town, and the previous water bills for the property were normal, so I can't accuse the seller of knowing about it either.
I met with a plumber this afternoon and heard the damage - $2,300. I have about $7,000 in an emergency fund - which is for if I lost my job, not to pay for repairs. But I can cover the $2,300 without too much strain.
But this $2,300 comes with some other issues . . . First, I am having an arborist come by to trim some branches, since my homeowner's insurance company informed me that they won't insure me if the branch doesn't come down. I have one huge tree in front of my house (the arborist thinks its about 120 years old), with roots all over the front yard. According to the arborist, if the efforts to replace the water pipe damage too many roots, the tree could die - and the cost to remove the whole tree would run about $6,000.
I know, I know. These are the things people warn you about when you buy a house. But why did they have to come true just because I ignored those people?? Plenty of people buy homes and don't have these issues.
The part that's stressing me out is the fact that I can (almost easily) afford the plumber without too much hassle to my life, but what else is going to happen? Now that my worst-case, something-costing-over-$3,000 (including the tree-trimming) has happened, I no longer have the peace of mind of thinking "if something super expensive happens, I have some savings to cover it so the world won't end."
Any advice on what to do with my finances after paying for this? Should I stop making student loan payments and put the $500/month towards re-building my savings instead? (I have paid enough extra on the student loans that I don't HAVE to make any payment until April 2013, and even then, my minimum payment is only $140). Should I continue to pay the student loan as I've planned so that it'll be out of the way next January, allowing me a LOT more peace of mind and a higher savings rate?
http://www.flickr.com/photos/topgold/6273248505/
Housing History
I saw this fun idea for a post over at E-Musings - a brief history on where I've lived. She covered her history as a renter, and I will start with since moving out of the parents' house to go to college too, although I'm not renting NOW, and this place definitely needs to be on the list, so it's not specifically a "rental" history.
Freshman High Rise
My first dorm was as stereotypical as you can get - a freshman high rise, with the added feature of being an all-girls building. In a university with a large population of sorority girls, a disproportionate amount of which lived in my building. This was my first introduction to Georgia - coming from Massachusetts, I hadn't even realized that all-female buildings were a "thing" anymore. We had the typical tiny box of a room shared with another girl. Lofted beds, with the rest of our stuff under the lofted beds.
My roommate liked to invite drunken male friends over to share our tiny box - multiple guys sharing our room the first weekend of the semester. I didn't really get along with her.
Apartment-style dorms
My second semester of college, I moved from the worst building on campus to the best. Our university had constructed some new "apartment-style" dorms (you and a roommate or two each share a little apartment with a living room, and a kitchen sink and fridge - no stove). The university required first-years to live on campus, and so in my most-spoiled moment, I told my parents that I had to move or I would transfer schools. These dorms were far more than the cost of an equivalent real apartment. They didn't really need the ultimatum, and I was significantly happier in these dorms, which is also where all of the international students that I was friends with were placed.
Off-campus housing
Sophomore year, I used off campus to a two-bedroom, one bath furnished apartment in a very student-oriented apartment complex. I think we paid about $450/month each, plus a set $90/month for utilities, which is a little steep for the area, but probably worth it for not having to buy furnishings, rent a moving truck, and store my stuff somewhere because the next place I lived was...
Mexico
I spent the summer and fall semester of Junior year studying abroad in Monterrey, Mexico. I lived in the back half of a family's home that had been turned into apartments. They lived in a very narrow house, with three floors, and they had converted the back of the 2nd and 3rd floors to apartments. The main attraction was not sharing a room, and having air conditioning. My rent was $350 here, including utilities, and getting my laundry done once a week.
My land lady decided to rent the adjoining room out to a freshman girl a few weeks into the year, and so I had to share my bathroom with her - which meant she had access to my whole apartment. I would sometimes find that she had logged into her AIM chat or something on my computer when I wasn't around. She was supposed to access her room from the family's main entrance. I'm not sure what she did - the land lady complained about her eating their food without permission - but the land lady eventually decided the extra money wasn't worth the trouble of having this girl around, thank goodness.
Shared sublet
When I moved back to the US, I sublet a room in a 2 bedroom, 2 bath apartment. In fact, the apartment was intended to be two single-room apartments. Some past owner had joined the two with a spiral staircase. Instead of a kitchen on my level, we had a laundry area, which was nice. So far I've never had to use a laundromat, and I'd hate to have to start!
I didn't feel like I really moved into this place. I only lived there for a semester. The girl who was already living there kept the shared upstairs area an absolute mess, and I spent as little time as possible there.
Senior year
Another shared apartment in a student-oriented apartment complex. A four-bedroom four bath. Nothing too remarkable here. Didn't see two of the roommates too often.
Masters Degree Year
Shared a 3-bedroom, 3 bath with two friends. I think our rent was only $350 each, and we could walk to campus (but usually didn't due to heat or the danger of that route if one had to return home after dark.) My one roommate managed to almost die in a car accident the day we all moved in, which was a scary time.
Atlanta living
Thanks to being a dog-owner, rather than living in a $900/month single-room apartment like most of my coworkers did, I ended up moving into a shared house (3 br 2 bath) with rent of only $325/month for just over a year. If you've been a frequent reader of the blog, you may have read some posts showing the stress/arguments I had with those roommates. Luckily, after living there for about a year and a half I moved to...
My first home!
I have been living in my house for about a month now. I love the house. I love coming home to a quiet home without a TV blaring. I like having the fridge to myself. I love my kitchen. I'm having a great time coming up with ideas for the garden, and implementing some of those ideas (it'll take some time and money to achieve my imagined end result.)
Overall, I've been quite spoiled by the cheap housing available in Georgia. I really feel terrible for E-musings and the terrible places she has lived - probably for a much higher price than my list! The most I have had to pay in rent was $450/month. That's pretty crazy! (FYI, the mortgage payment is about $985, including taxes, homeowners insurance, and PMI).
How about you? Any interesting/horrifying stories of places you have lived?
Taxes and Innovation
As Obama pushes the "Buffett Rule" (which is not intended nor expected to actually pass into law - by the way, I started writing this post last week, and this bill failed to pass the Senate today), I have heard some different reactions from people interviewed about it. NPR conducted a segment a couple of days ago where they tried to refute the complaints that the high tax rate on individuals with over $1 million in annual income will hurt small businesses. NPR mentioned that very few small business owners will be affected by this rule, as they don't make anywhere close to $1M per year. They interviewed some of these small business owners, some of whom reasonably admitted that they weren't affected by it, but the ones who are clearly against Obama's politics tried to make the point that while they aren't affected by the rule NOW, it would take away their motivation to do better in the FUTURE as the government will "take a part" of their income away.
I've always been confused by people who a) vote for tax breaks for the rich because they dream about one day being the rich (but probably won't make it there) and b) who say that the government taking a larger portion of their higher income makes them less likely to try to achieve that higher income.
It's the same as me saying "Well, I earn $34,500 now, but every dollar I earn above that, the government will take 25% of it instead of only 15%! I guess I should just stay in my current job and not try to earn any more income!" I mean, that's the thing people. Every dollar of taxable income you earn over $34,500 is already taxed at 25%. This rule just suggests that we guarantee that income over $1,000,000 per year is taxed at at least 30% on every dollar they make.
I'm pretty sure if you're the kind of entrepreneur that decides not to try to push your income from 500k to over 1M because the government TAXES INCOME, you probably don't have the drive needed to succeed anyway. Most people making millions of dollars a year are not doing it just for the money - after all, they could easily retire tomorrow if not working was what they wanted. I just don't think you get to very highly paid positions if you're only in it for the money.
Tax(able income) Time!
I will have to fork out extra money at tax time this year, but I try and remind myself that it's really a victory to owe a little, rather than to be refunded $2,000 that you could have been using all year!
Plus, I had to pay in a bit, due to my blogging income I made this year! With income from advertising on this blog, plus some additional articles I wrote on the web, I managed to make over $1,000 in extra income in 2011! (Specifically, $1,014.)
Since I've hardly been treating my blog like a true business, and since I've never made much in the past, I'm very excited about passing the $1,000 mark. That's $1,000 that I put towards my student loan, or perhaps it's $1,000 of the money I saved up for my upcoming trip to Spain. Either way, it's made me $1,000 richer than I was before. Also, my annual raise was about $3,000 this year - I increased my side income by about 33% of my regular income raise! When you think about it in those terms, it's pretty huge.
Some of my "other income" comes from writing articles for what used to be Associated Content, and is now Yahoo! Voices. The payment structure is pretty cool, because you get paid for all the page views that your articles get. Over time, this snowballs, and then the more total page views you've gotten, the more you get paid per-page-view. I made it to level 9 out of 10 on the per page view scale, simply because I've been a member for so long. If you're interested in signing up to write articles, you can create an account here. I am interested to know what it is like for new members getting in now. I think if you can write a coherent article on a searchable subject, you'll do well there. I like to keep the account open to write articles that I might not write otherwise, or to practice writing more "commercial" style, searchable articles than what I would normally write on my blog.
Check out some of the articles that I've written here:
Published on Yahoo! Finance: Budgeting for my post-college lifestyle
One of my most popular articles: The Benefits of Working at a Big Four Accounting Firm
Somehow this article about more exciting accountant workplaces than Big 4 is not quite as well-read: Accounting Jobs: FBI Special Agent (They take CPAs! I promise!)
Coming soon (unless they reject it of course), a new article about my top tip for the mortgage closing process. Yes, I do get 1 cent or so if four of you read these, but honestly, I just hope you enjoy them, and maybe even sign up to become a contributor yourself!
House to-do list
I am now a "home owner" although of course, the bank really owns the home. I'm resenting having to go to work now, since I just want to stay home and get everything cleaned up and orderly! Of course, having a mortgage payment means that work is more important than ever.
The first few weekends resulted in a ton of extra purchases (garden hoses, shovels, rakes, washer and dryer, new fence in the yard). It seems like there's so much I still want to get to make it everything I'm imagining, but I think it's time to slow down and take it one thing at a time.
First Gen American wrote a great post about doing remodeling one room at a time. So while I'd love to run out and buy gallons of paint and get rid of the icky brown "neutral" color the investor that sold me the house chose, it's really not something that I need to do all at once.
So what is on my immediate to-do list for the house?
- Couch - although... it seems less and less essential. I can always sit on a dining chair, or nap/read a book in bed for now.
- Gardening - If you've ever driven down a highway in Georgia, you may have noticed Kudzu growing (and choking) all the trees along the road. Well, I have some of that invasive species in my backyard. I'm planning to put down some weed-preventing landscaping fabric, but if you want any other plants where the fabric is, it's best to plant them at the same time as laying the fabric, so you can make holes in the right places. However, plants are pretty pricey! Does anyone have tips on finding cheap plants?
- Dining room table. It seems silly, since my folding table is working perfectly well as a place to eat and work. But I just long for a slightly bigger table, and a desk I can leave my computer accoutrements (second monitor, 10-key, etc) set up on. Of course, this house is so small that leaving anything "set up" is a luxury. Office desk will have to double as a sewing table too.
- Household projects - painting and re-upholstering some dining chairs I bought at a second hand shop. Making curtains for the windows. (Especially for the door out of the sunroom. It has a venetian blind on it now that flaps around and bangs every time the door is opened and closed.)
What's on your to-do list for your house? What are your top 3 must-haves?
Photo by ahisgett on flickr
5 reasons to hire a payroll company
Many of the clients I work with are foreign companies expanding to a new location. There are many things a new company needs to have on it's to-do list - applying for a tax id number, selecting a site to locate their business, payroll services - but one of the top items on the list of any new business, whether foreign or domestic, should be hiring payroll services to make sure that your employees are paid in a timely fashion and in accordance with local laws and tax codes.
Why? Because you need to pay your employees of course! Payroll is a complex process, and every country has different rules. I can't think of a single client I've worked with that does their own payroll in-house. Don't forget to shop around for payroll services though - just because a company is big and famous does not mean that it is the right payroll service provider for your business!
Why should you hire a payroll company? Isn't that just another cost to add to your company's expenses?
Avoid the hassle
If you are running a small business, chances are, you don't have time to keep track of payroll yourself. Hiring another employee isn't worth it either, since payroll processing most likely won't be a full-time job at a small company. Save yourself the time and effort of having to become a payroll expert instead of working on your business. Most companies find it to be more cost effective to hire an outside service for these duties.
Hiring an expert
Payroll comes along with many moving parts. Employers need to withhold taxes from their employees' paychecks, accrue for accumulated vacation time employees earn, and keep track of any advances or withholding from employees' pay. Employers also need to make sure that everyone's check is cut on time and makes it to the right employee in a timely fashion. A good payroll company will know the laws of the country it operates in, as well as any specifics of the state/regions that your employees are working in. Their employees should be well-trained in the running of payroll, and managers should oversee their work. Chances are, your in-house employees won't be as savvy as an employee of a firm that does nothing but payroll all day long.
Advanced technology
Your typical payroll service provider will offer your employees perks that would most likely be difficult for your small business to provide, such as direct deposit, and secure electronic paystubs. Most of my coworkers and I prefer and to receive our pay checks and pay stubs electronically. This method of paying employees is commonplace and expected from employees.
Separation of duties
In a small business with only one or two employees handling the accounting, it can be very difficult to create enough separation of duties to prevent any one employee being able to commit fraud. By outsourcing the payroll process, you will be able to separate this vulnerable area away from any accounting employee that may already have access to many other accounting functions. An employee that keeps the accounting books, cuts the checks, and keeps track of payroll could easily add fictitious employees to the monthly payroll without vigilant oversight from a manager. Rather than keeping an eagle eye on the employee, outsourcing payroll can prevent some potential frauds from arising.
Add-on services
Many payroll companies offer additional services that you may find that your business needs as it grows. Since it makes sense to hire a payroll company right from the start, you will have the added benefit of developing a relationship with the company so that you can feel comfortable putting other services in their hands - such as bookkeeping and other accounting services.
Convinced yet? Ask around a few other business owners in your area to see what choice they made to help you make your decision of whether to outsource payroll. You may be surprised how many of these businesses use outside companies to handle this function.
Please hold…
I just spent some time applying for EINs for a new client - now I have the IRS hold music stuck in my head. Argh!
Dum dum dum DUM DUM dum dum dum dum DUM DUM
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