Money Matters: 7 Essential Questions to Ask Yourself
Mar 11, 2021
How important is the amount of your paycheck when it comes to choosing a career?
If you’re proactive in carving out a career path that combines your passion with your natural talents, we believe you’re more likely to land in the right job, and that will make you a happy, thriving employee. And productive, motivated employees are well compensated by their employers. Funny how that works, huh?
But we also know the story is more complex for most. Money matters too.
Many people will advise you to pursue a career in a field that pays well, so you’ll always be financially stable, while others will say ‘you have your entire life to work,’ so it’s important to do what you love. Research backs up both points. Money doesn’t lead to happiness in most cases, but not having enough of it can lead to ongoing stress.
Financial success falls into the category of something you “value” about a job, and how much it factors into a career decision is unique to each person. Here are 7 key questions to ask yourself:
- Will I have student loans to pay off? And if so, how soon could I pay off those loans in the career I want to pursue?
Many college graduates drown in student loans, so be sure to do your research and understand what you’re setting yourself up for in terms of future debt. The average post-college student monthly loan payment is $393, which might be easy to pay off quickly if you’ll be working as an aerospace engineer, but could take decades if you’ll be a preschool teacher. Check out a debt/salary calculator to help determine what that debt over time may look like in different careers.
- What city/area do I want to live in? Or, what city/area will my career require me to live in?
This one is tricky too, as you’ll need to weigh the cost of living in the city against the salary you may make. For example, if you’ve always dreamed of performing on Broadway or working as a legislative aide for a Member of Congress, you'll need to live in the cities those jobs are found in: New York and Washington, DC, which have a high cost of living. You may need a part-time job to subsidize your lifestyle as you pursue a career you’re passionate about. Is this worth it to you? How much “will” do you have for this career? If you’re looking to get into technology, healthcare, engineering, or financial services, you could live in a more expensive city like San Francisco or Boston. Or, you can opt to live in a more affordable city (think Cleveland, Memphis, St, Louis) where your dollar will go far, and jobs in these fields aren’t typically location dependent. Finally, keep in mind lots of companies are offering employees the option to work remotely, so depending on the type of career you get into, it may not matter where your “office” resides.
- What will my salary cover?
What is the “cost of living” anyway? This is the money you’ll need to cover basic expenses, and it’s often used to compare how expensive it is to live in one city over another. From your after-tax salary, you’ll need to subtract expenses such as: rent, utilities, cable, cellphone, internet, insurance, car payment and/or transportation costs, food, “fun” money (eating out, shopping, travel). You’ll also want to allocate some funds for emergency and retirement savings. Keep in mind what you think is a great salary in one city may leave you scraping by in the next. For example, an employer in Los Angeles may have just offered you what sounds like an amazing salary, until you discover how much it costs to rent a one-bedroom apartment there. Plug some numbers into a cost-of-living calculator to see how far your dollars will stretch from city to city.
- What benefits could I receive in my job?
The figure you see as your salary is only part of what your employer typically will provide you—benefits account for about 32 percent of the employer’s cost of compensation, adding up to plenty of perks! These include things like healthcare, tuition help, student loan repayment, retirement savings, profit sharing, company car, childcare, paid leave, gym memberships, and more.
- What will my job pay me down the line?
Just because you’re not raking in the big bucks immediately out of college or high school doesn’t mean you won’t do so down the line. Compare salary reports for the career fields you’re considering, so you can determine what you may make when/if you jump up a few levels. And keep in mind, your first job is a lot about gaining the experience you need as a new professional, so try to look at the big picture.
- Should I live at home to save money? Is that even an option?
College graduates often secure a job and live at home for a period in order to bank some money. Doing so means you can take a lower-paying job that you might not have been able to otherwise, or it can buy you a little time to save money and build a healthy financial foundation until you go live on your own. This option really depends upon your parents’ willingness to let you live under their roof – and your ability to live by whatever “rules” they may want to lay down while they help you get started.
- Is money what’s motivating me?
For some students we meet, money is high on the list of their career values. And that can be okay! The drive to make money can motivate and lead to a successful career. If making money motivates you to get up each morning and work hard, it’s good to be aware of your motivations. BUT, research shows that money is often just a short-term motivator – employees are driven to get that raise, but once they receive the bigger paycheck, its power to motivate disappears.
Believe it or not, the most “successful” people in the world find success as a byproduct of deeper goals. They aren’t motivated by money, power, or fame, but by other factors intrinsic to them. As you continue reflecting on your next steps about a potential career path, consider putting the money question into perspective instead of front and center of your decision-making process.
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