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November 23, 2011

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Well done! You have exceeded the average by far; even for people in computers, you make a very good salary considering your age. Keep growing your career and watch what moves your company makes. Your job is only as secure as your c level executives make it. With that in mind, learning to live on a small fraction is a good idea so when tragedy strikes you don't
care as much.

Only $17 a month for your electric bill? Was that a typo? Even a refrigerator would cost more than that.

I love this series. It is great being able to see real life numbers for different people.

What specifically do you do for the software company? I am in a similar boat career-wise but get paid 2/3 of what you do. Can you detail more about your career path/advancement so far?

You remind me so much of myself at your age. I completely relate to how hard it is to plan when there are so many uncertainties in your life, particularly regarding marriage and children.

My strategy was to save as much as could while I could, while still enjoying my paycheck within reason. I'm so glad I did this as I was able to pay for most of grad school, a down payment, and a car with this money, all before meeting my husband (we met when I was 29).

I'm now in my mid thirties and married with two small children. It is still so nice to have my savings as I feel like it gives me a lot of options and flexibility at work.

It sounds like you are on the right track. Keep up the good work but remember to enjoy life. I found grad school a great way to take a step back and make sure I was making the most of my 20s while also growing my career. Don't be in too big of a rush to buy a home until you are sure you know where you want to live.

And don't worry too much- when you find the right guy, he will not be intimidated! But he will likely put you in charge of the finances :-)

Don't take this the wrong way but saving $1 or $2 for such detailed things each month seems like a waste of time. Why not just lump them all together and take the expenses out of that rather than $1.25 here and $2 there?

I am sure you are a great person but I hope your guy problems aren't due to micro-managing. Some guys like that though so good luck!

Okay, what field are you in to make that kind of money 1-2 years out of college. My husband is thinking of changing careers :-)

@Easychange Thanks! I am definitely working on growing my career. And I agree with you on living with a small fraction - it actually took a lot of effort on my part to bring my spending up to about $36,000 a year.

@Paul $17 a month for my electric bill is not a typo and that's actually overbudgeting. My average bill is about $28 for 2 months though my November/December bill last year was about $50. I live in an apartment and don't turn the heat on very high when I do turn it on. My apartment building was also built in this century. I definitely do have a fridge :)

@JP I am a software engineer, like you. I know that my salary is comparable to other companies in this area, so I would guess it's a combination of:
1) I work for a larger company than you
2) I most likely live in a higher cost-of-living area than you (this does make a difference on salaries)
3) My company gives regular bonuses, which this year amounted to over $20k and should increase next year.
(This is from looking back at your reader profile.)

I don't want to go into more detail here on my career advancement, however, I give permission to FMF to give you my email address.

@NoTrustFund Thanks! It's so nice to hear from people who are/were in a similar boat to me :) I hope I am where you are when I'm in my mid-30s! I am trying to employ a similar strategy and I'm getting better at spending money on the things that matter. I think that's been one of the main lessons I've learned since graduating from college.

My mom keeps telling me that the right guy won't be intimidated either, but that guys take longer to "figure things out" sometimes and that I probably can't meet someone who I want to marry for a few more years.

@Brent I tried your way at another point. But then when I had to renew my driver's license for $75 or my passport for about $115, I would feel guilty about spending the money. These $1 "dribbles" are just line items in my spreadsheet that I don't notice until I need them and then I don't feel guilty about spending the money.

I think that my guy problems are a combination of my career being more important to me than relationships throughout college and after college, it being way more difficult to meet people in general. Some guys also don't like dating women who make more money than them for some crazy reason :-) But don't worry, I'm working on the micro-managing and being more flexible. (See that $300 per month for entertainment? I'm not allowed to argue with myself over that.)

@Emily I work as a software engineer at a large company.

Hey that is a great accomplishment to graduate school with that small an amount of debt. Though having a very short credit history may be a limiting factor now, it is a comparably much better situation than those who are limited by having thousands of dollars in student loan debt.

My wife and I live in Silicon Valley and we have lots of newcomers with H1B visas that work in the Hi-Tech companies, the most recent arrivals have come from India. Probably the majority have plans to return to their homeland after saving up a lot of money here and I have read newspaper articles where some couples have done just that.
My wife and I were married in July 1956 and emigrated from England in November the same year. Our first 2 years were in Canada but we then moved to the US. I knew right away that I really wanted to stay in the US but my wife's plan was to spend some years here, save hard, and return to the UK to be close to family members. Several of our friends became so homesick that they did just that. I was working in the defense industry on classified projects and had to sign a declaration of intent to become a US citizen, which we both did after 5 years. When the time came for us to make up our mind we decided to return home, with our two young daughters for a visit, look at homes, investigate job prospects etc. The only suitable time for our trip home was around Christmas and I had to come home earlier because I was taking classes for my MS in engineering. This trip was the decider, the weather in England that Winter was dreadful, very cold, with lots of snow and ice and biting winds. I wrote to her telling her about my activities with friends and how we were enjoying the outdoors and the beautiful weather we were having and it didn't take long for her to connect the dots between "Life during an English Winter" and "Life in the San Francisco Bay Area's mild climate", and then came the letter saying how she couldn't wait to get back to California.
We have been here ever since, brought both sets of parents over for a visit, raised three children, we both had satisfying careers, and are now in the 20th. year of our retirement with no regrets whatsoever. After vacationing all over the world there is nowhere we would rather be living than right here, and definitely not England.

You're doing very well. Jane makes a lot of money and saves most of it.


The pay is relatively high for someone with your experience. I am guessing Jane lives in a fairly high cost of living area considering the pay and rent. The higher cost of living area could cause her pay to be 25-50% more than it would be in a cheaper area.


I would not count on bonuses every year. Bonuses aren't guaranteed and they aren't money in the bank. If your company is anything like mine those bonuses dry up when the profits aren't as good. So in a couple years their quarterly / annual results may not be as great and the bonuses will drop. Same goes for stock performance. You seem conservative in your predictions but you know I was going to be a millionaire from my company stock around 12 years ago and it certainly didn't work out that way. I too work in a big company.


"Auto insurance $133 (up from $105 this past year)"

Maybe you should shop around if they jacked your rate up 1/3 in a year. Unless you had an accident or something to explain that.

Paul : "Only $17 a month for your electric bill? Was that a typo? Even a refrigerator would cost more than that."

Some places have very low electricity rates. My dad is in a coop and pays something like $5 month minimum and only like 5¢ per kWH. National average is around 11¢.

If your fridge uses >$17/month then it may be time for you to recycle that grossly inefficient 1970's model and get a new one. New refrigerators use closer to $3-5/month in electricity.

Holy crap this girl is a catch!

@Ron Thanks! I actually graduated with assets and zero debt, not minimal debt.

@Old Limey Thanks for your story :)

@jim Thanks! I'm on track to save/invest 64% of my net income this year (after taxes, health insurance deductions, but not 401(k) contributions).

Some of my bonuses this year and last were cash, but now we're getting mostly into stock. I have it set to sell-all stock immediately and at that point I then save 100% of the net proceeds after the brokerage firm takes out the income taxes. Stock bonuses scare me. Sure the shares are scheduled, but what if our stock price drops 10% the day before they're scheduled? All of my expenses including vacations are planned based on less than my monthly salary and the bonuses are used only for savings.

I stupidly asked my auto insurance company to pull a new credit score, which raised my policy because I started it when I had no credit history and they gave me the benefit of the doubt, but now my credit score is only "good".

@jim @Paul My base service charge for electricity is about $7/month and then I pay about 5 cents per kWH. I don't have an air conditioner and I hardly use the heating system, so my electricity usage is quite low.

@Jonathan Thanks for your comment - it made me smile :)

I'm also an early-career software engineer at a large company. I've contemplated the (employer-paid, of course) master's degree also. My conclusion is always the same as yours: it's just not worthwhile.

Everyone I know who did a night-class MS in Computer Science or Software Engineering got nothing from it except a piece of paper. Even at schools with strong reputations, these kinds of "professional" programs seem to be lowest-common-denominator affairs. (If there's a counterexample, I'd love to know about it!) There's little reason to respect a no-effort degree, and as far as I can tell, few people do. Better just to focus on doing outstanding work on the job.

Going to graduate school full time for a Ph.D., and then dropping out after the MS, is another kettle of fish. Those degrees are earned and valued. It's a much more drastic career choice, though; I might do it someday, but only if I decide I really want to specialize.

@08graduate
In 1960 I started work as a junior engineer for a very large aerospace company. I had the British equivalent of a BS degree and soon found that the majority of the other engineers in my department had MS degrees. I also found that some of the material that I really needed to be knowlegeable in was not covered in the BS curriculum. I had also discovered this in my prior job which is why I left it to go to a major company where I hoped that it would be easier to pursue an MS degree. At that time there were periods between contracts where often some employees that were near the bottom of the department stacking chart were laid off and since I had a wife and two small daughters I didn't want to lose my job.

The new company allowed part time day release and paid the tuition for every course that you obtained at least a B grade. There was a very good university a couple of miles from my home. I walked in there one day and asked to speak to the Dean of Engineering. I told him that I had the British equivalent of a BS degrees in both mechanical and aeronautical engineering and that I wanted to get an MS in Engineering Mechanics. After a little discussion he said, "Sounds good, go ahead and sign up, all that really matters is that you pass all of the necessary courses. I signed up, took courses from 7-10am several days/week, and three years later after hitting the books from 8-12pm every weekday evening I was awarded my MS degree with my wife and our 3 and 5 year old daughters watching and all it cost me was the price of the text books.

As my career progressed I moved into working on government funded R&D programs to develop new computerized analytical methods of structural analysis and soon realized that the courses I took in my MS were absolutely essential to understanding the work that I was carrying out. I stayed with the company for 36 years, had several promotions and ended up leading an R&D project myself every year. I then found that by cooperating with professors at U.C. Berkeley that were publishing pioneering papers in our particular field of interest, and that by providing very modest grants for their PhD graduate students we could obtain valuable, state of the art software modules that we could embed into the software we were developing. This way all concerned were happy, we saved the government money, and we were able to make huge advances in our analytical capabilities.

Hi Jane, thanks for sending in such an informative profile for all of us to discuss. It seems like your biggest concern from what I read is that you are not American and that you feel that your road to financial wealth is unique and so you are hoping to seek more specific advice on how to handle your career/life goals.

I do feel that when it comes to buying a home you have to take some heightened considerations before plunging into real estate. I would therefore recommend that you hold off buying a home until you see your own future a bit clearer and more stable. By this you should evaluate your residency status, where it is and where you would like to go with it. Search within yourself to find out which you DESIRE MORE: stay in America OR eventually return to your home country. Do this evaluation quickly and determine for yourself to either proceed with citizenship or get prepared mentality and plan for when and how to do your relocation back home.

Retirement planning and investing in the markets should not matter too much in your situation. You are free to invest wherever you are in the world and I'm not so sure you have alternatives in retirement to consider anyway.

I really think you should take one of your two vacations to go back home and see your family. You can take them with you to any of the vacation destinations around your home country that you have never been to. You'll be giving you and your family the best present ever...time together. It might actually clear your head a little with some special advice from parents and help you along with your life goals.

The other vacation you can do what you most want and maybe invite your best friend to join you. If money is an issue, you would then have to decide on going alone or subsidizing their trip to make that idea happen.

My first advice about your credit history would be to find out your FICO score and see how you've been doing so far with your current credit. It must not be doing too badly since you were approved for a car loan. That loan should count as one of three open accounts, shouldn't it everyone? My take is yes. Don't worry i'm sure you will steadily build credit over time.

If you do stay in America, get married, kids, etc. please do not put down $100,000 on a home. I think this would be a huge mistake. Reason being is that the home loan will serve great purpose for tax deductions and that is especially more helpful to those who are in a higher income tax bracket! Twenty percent down is all you need to create sound equity in your home. Use the remaining cash that you would otherwise have hung up in the home and accelerate it towards other retirement and investment vehicles.

You are currently paying $1500 per month on rent, parking, and utilities. That is a great deal being so close to your job! I really challenge your opinion that, "I will definitely hit a point in a few years where it might not make financial sense to keep renting with the amount of cash that I would have saved up for a down payment." Unless homes are appreciating at a favorable clip, it is hard to find the advantage here. Alternatively, saving that money and investing it in a down market will have greater investing potential in the long run. You'll be buying a lot of undervalued shares in stock now and time (which you have plenty of) will see them soar up once again!

Think about all the monthly costs associated with owning a home. (It is in some locations worse than renting)
~ $300+ interest
real estate taxes
home insurance
maintenance costs
association fees
increased transportation costs
increased commute time
increased car maintenance costs
increased intimidation to future boyfriends :)
decreased social life (you will be stuck will maintenance duties unless you want to up the maintenance costs even more)

Nope, nothing on this list increases your net worth or your self worth for that matter.

I have just one more challenge to another opinion you hold and that is over you career path. You said that "Sometimes I wonder about the value of a Master's degree, but I don't think it would increase my earning potential." Think again! I would consider setting up a one on one meeting with your boss to discuss your career path. Ask them whether they think there is a benefit to the company for you to pursue an MBA? That should give you an immediate answer to that question.

You are really young at this stage to have a boyfriend with similar age to be in a serious "marriage-potential" relationship. If not intimidated, your boyfriends could just be too young to even think about going there. Average age of marriage in America is 26 for women and 28 for men. If you are really ready for that next step in life I'd recommend dating men just a few years older who may be ready for the next step. You may find that the majority of students in an MBA program are males. They are also driven and not so easily intimidated. This could very well be a win, win, win situation for you! Good luck improving your life goals!

On a Master's degree:

@08graduate @Old Limey

Old Limey's example of why he went for a MS degree is a good example of how a more specialized MS degree can further your career. I would agree that if I found a specialization that would help further my career, it could make sense.

@Luis My company doesn't offer tuition reimbursement. A MBA would move me into business management rather than technical management and I am more interested in the latter at the moment, though I still want to pursue the engineer track while I develop my soft skills.

J, Do you feel your company is showing signs of prepping you for management? Where are you as far as job title goes...programmer, analyst, architect?

Luis, my manager and I both agree that this isn't quite the time in my career yet to move into management. We are definitely working on my leadership skills as those will be useful no matter how soon I move into management, but I want to continue coding for awhile yet. My title is "Software Engineer".

@Luis
I actually see my parents quite often. The fact that they are quite close makes the idea of applying for a green card a lot easier to have as an option since it's not like I would be that far away from them permanently.

My credit score is in the "Good" range and is over 700. It would probably be "Excellent" in another 6-12 months.

I view buying a house/townhouse as that if I move ahead with that decision, I will investigate starting the green card process within the year.

Right now, I could put about $75,000 down with some money that my parents plan on gifting me. I'm already investing $22,000 this year and will have saved $30,000 in cash accounts. Do I really need to invest more than 20% of my gross income towards retirement each year?

I'm not sure I'm ready for marriage right now either - I'm mostly looking for a relationship where we're both on a comparable level of importance to each other. I have been mostly dating guys 1-3 years older as I simply don't meet guys my age anymore. "The majority of students in an MBA program are males." Do you not realize that most software engineers are males?

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