Nov 04

The Size of Your Package Matters!


No shorts allowed!

No not “that” package! Get you mind out of the gutter. I’m talking about your benefits package!

My First Post-College Job:

Shortly before I graduated from college I signed a lease for an adorable little one-bedroom apartment in Boston. I was excited to begin my “adult” life and to start my first full-time job. The only problem? I didn’t have a job. Brief aside: I wouldn’t recommend anyone rent an apartment without a job or any source of income. But what can I say? I was confident and carefree young and foolish.

Fortunately, the 22-year-old me wasΒ horribly naive about how bad the job market was in 2005. So I moved into my new apartment, bought myself a good suit and began applying to jobs. Shockingly (humor) there weren’t a lot of employers banging down the door to hire me. So when I was offered a temp job at a large hospital I jumped at the opportunity. It wasn’t, the job of my dreams, but it was a full-time position with a well-known and well-respected employer (and it paid my rent!).

My First Experience with Packages:

I worked at the hospital for several months before they offered a full-time job. Instead of being thrilled and proud, I was shocked and horrified by how “little” my salary would be. I mean, “I have a bachelors degree! I didn’t go to school for 4 years to get paid this way, right?” After the “shock” and entitlement wore off I started talking to friends and mentors. With a little “adult” input I realized that the pay was actually pretty good and the benefits were great.

I didn’t end up taking the position, but having that experience taught me an important lesson about the value of a good benefits package.

Bottom Line, the Size of Your Package Matters!

Benefits are really important and a benefit package (or lack thereof) can say a lot about your future employer and how they value (or don’t value) their employees. Smaller employers might not be able to offer the “big benefits” like childcare or 403(b) matching, but may offer flextime and work from home options. When considering two similar job offers, benefits are often the deciding factor in which position you will take. Depending on your lifestyle, family composition and financial situation, benefits can really make or break a job.

Types of benefits some employers offer:

  • Health insurance. Health insurance is a very important benefit to consider when accepting a job. These days there are a multitude of plans and a lot of them are really confusing (My work just switched to a high deductible plan, which means that I pay for all of my care out of pocket until I reach a deductible). With Obamacare rolling out, it’s not really clear exactly how health insurance in the US is going to change, but having health insurance is obviously important. Without health insurance one bad accident could cost you tens of thousands of dollars. Even if you’re relatively young and healthy, health insurance can be a life saver (literally and figuratively $$).
  • Vacation Time. Pay attention to how much vacation time is offered and how it’s accrued. Some employers don’t offer paid vacation, while others offer several weeks per year. Also note if vacation time rolls to the next calendar year (some companies only allow you to carry over a certain number of days each year) and if the number of days you receive increases after a certain number of years of service. All work and no vaca is not a fun way to live your life!
  • Personal Time. My current job offers 3 days (accrued) per year. My personal days don’t roll to next year so I have to use them all within the calendar year or I’ll lose them (I learned this the “hard way” when I lost my days during my first year of employment, ask!). Personal days are nice for unexpected emergencies, doctor’s appointments, self-care etc.
  • Sick Time. Hopefully you won’t have to use any sick time, but if you do, it’s a very good benefit to have. Nothing is worse than being sick and having to go to work because you can’t afford to stay at home. Most employers I’ve worked for allow employees to take sick days as needed, but don’t “pay out” for sick time when you leave the company, but this varies by employer. My step-dad works for the state and is able to give sick time to fellow employees who need it.
  • 403(b)/401(k) & matching. Many larger companies and organizations offer optional retirement savings plans for their employees. If you participate in a 401(k) or 403(b) your contributions are deducted from your paycheck and go directly into your retirement account. If you work for a particularly generous company, your employer may match your retirement saving up to a certain percentage of your salary. For example, If I contribute 3% of my annual salary to my 401(k) and my employer matches my 3% so that I’m actually saving 6% per month.
  • Life insurance. Thinking about our own demise isn’t very pleasant, but as adults it’s something we have to do. Planning for the future and making sure that your family would be OK if you pass away is really important. I have a small life insurance policy that’s offered by, and paid for, by my employer. Life insurance isn’t very expensive for a young and healthy 30-year-old, but it’s a nice benefit to have, just in case.
  • Dental Insurance. Even if you only have 2 checkups/cleanings per year, inexpensive dental insurance will likely save you money. If you have kids or a spouse you’ll want to ask if you have the option of including them on your plan (and how much it will cost). You’ll also want to ask about the different types of plans offered (my employer has a less expensive networked plan and a more expensive plan out-of-network plan). For me the in-network works just fine and costs me about $2.00 (or something really inexpensive) per paycheck. The insurance covers cleanings (2x a year), x-rays, and all basic dental work. If I paid out of pocket I suspect I’d pay at least $200 for the cleanings alone.
  • Vision Insurance. Now that I have 4-eyes, vision insurance is a benefit that’s really important to me. My insurance is paid for by my organization and includes one yearly eye exam and one pair of glasses or a year’s worth of contacts. I have several pair of glasses so I’ve been getting the supply of contacts. If you wear glasses or need a yearly eye-exam vision insurance is awesome.
  • Childcare. Can you bring your kids to work? Does your work offer onsite daycare? Does your employer subsidize your childcare costs? Can your work flex hours or work from home during school vacations?
  • Free Meals. I’ve never worked at a company that provides regular free meals, but some companies have cafeterias, catering, a fully-stocked kitchen etc. If you can eat for free at work, you’ll save on your take-out or grocery bill. Bf’s office gets bagels for breakfast once a week. It’s not daily free lunch, but it is a nice little perk to have.

Tell me about your package! Are you happy with your benefits? What do you wish you had?

Image: JayBergensen


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  1. Hayley @ A Disease Called Debt

    Are there really companies which would offer childcare attached to the place of work? That sounds amazing? I’ve never come across that here in the UK. I agree that the size of the package definitely does matter – it’s not just about pay but also the benefits that come with a job.

    1. femmefrugality

      I’m with you, Hayley…I’d love to work at a place like that! I know they do exist, but I’d venture to say that here in the states they are very few and far between as well. I’ve heard of them, but never had an employer or known someone that had an employer that provided it. That’s what I wish I had!

      1. KK

        I suspect jobs with onsite daycare are pretty hard to come by (I don’t have kids so it’s not a benefit I’ve ever needed or looked into). With the cost of childcare these days, a job that offers free childcare is probably highly coveted, I’d imagine. I did once intern at a social service agency that let employees bring their kids to the daycare for a discounted rate.

  2. Demaish @ Borrowed Cents

    We get provided with almost all the benefits you mentioned but what I wish is I could have signed up to my employers 403b plan when I was 20

    1. KK

      You and me both Demaish πŸ˜‰ I wish I’d gotten an earlier start on retirement saving, but sadly I was in so much student debt, I had to dig myself out first.

  3. E.M.

    My cousin’s place of employment has a daycare, which is partially why she took the job. It is a great benefit to provide. I agree that benefits can make or break a job decision. Currently I have one week of vacation and something like three sick days, but I never use them. As we’re such a small company we try not to call out at all. They do offer health, dental and vision insurance, but there’s no 401K. I would really like to work at a place that does have a 401k and a bit more vacation time/flexibility.

    1. KK

      I’ve worked for both huge and smaller companies and there are definitely unique and good things about both. I can imagine you must feel terrible when you call out sick when you’re a part of a really small team. When you’re not there, there’s nobody else to do your work and when you come back you’re probably sick and stressed about the work you missed πŸ™

  4. Connie @ Savvy With Saving

    Great points. Salary isn’t the only thing that matters when deciding whether or not to accept an offer. Something that is important to me is vacation / personal time off since I’d like to have the option to travel for a couple weeks. My job provides 2 weeks vacation, 3 personal days, and 5 days sick. It’s enough for me but I actually had more vacation days in my past job.

    1. KK

      Thanks Connie. You’re absolutely right about salary not being the most important thing. You could be making a million dollars a year but not ever get to take a vacation. I’d much rather make a little less and have the freetime to spend with family and friends. But that’s a personal choice I guess. Some people would rather have the money.

  5. Mrs PoP @Planting Our Pennies

    Lifestyle, too! Is this a place where you’re expected to clock in and out or where you get treated as a grown-up who gets things done?

    1. KK

      Totally! I haven’t had a clock in/out job since I was in high school and I wouldn’t want one. The quality of life at work is very important to me. I don’t want to be micromanaged or watched when I’m on the clock.

  6. Morgaine

    I just made permanent at my job and since its government its got good benefits. Unfortunately, the benefits (and pension) are expensive and I’m still getting adjusted to my drop in net pay. It’ll be worth it in the end though!

    Good post! Sometimes we need to be reminded that salary isn’t the end all, be all of a job πŸ™‚

    1. KK

      My mom and step-dad both work for the state. They might not make huge salaries, but the benefits definitely make up for the salaries (in my opinion). Both of them will have decent retirement plans and have good vacation/sick time policies if they need them.

  7. Edgar @ Degrees and Debt

    Couldn’t agree more. After finishing my bachelors I did similar things as you did and I am sure we aren’t the only two. I got a job that paid me way too little compared to what I “thought” I was worth. The benefits at my first job were heavily outweighed by the lock of salary. The hours were strict, 9-530 with ZERO allowed overtime (both good and bad). The healthcare and PTO was fantastic and PTO carried over every month and NEVER expired which is unheard of. There were employees there for decades who literally could call out sick for the rest of their career’s haha. The tradeoff though was a crummy salary. I also quickly went and got a place to myself. I did this at a diff time, 2005 vs. 2010 was very different market so I bought a condo which in the area was cheaper then any rental by a few hundred dollars a month. All in all, I lasted at the job for a few years just to get experience on my resume and left to my current position in which the salary doubled and I also wrapped up my masters in the meantime. I am hoping the next career move I make is either to total self-employment or a significantly higher salary full time and continue working on my side income streams to still hopefully be self-employed one day.

    1. KK

      I’m not sure exactly what I thought I was worth right after undergrad, but in my head I was “kind of a big deal” lol. Glad I wasn’t the only one with overinflated expectations πŸ˜‰ Doubling your salary is super impressive. If I got out of the non-profit world I think I could make significantly more money (it’s something I think about). Hours worked is something I should have mentioned in the post. If you only work 35 hours per week vs 80, you have enough free-time to pursue other side jobs, which might significantly increase your total gross income.

  8. Rob

    I work at a nonprofit, so we aren’t exactly getting rich being here. However, we get highly subsidized insurance (the lowest plan is free, while buy-ups are available for people who need/want more coverage), a lot of vacation time, a 403B match, and a pleasant atmosphere.

    1. KK

      Wow, totally free insurance is quickly becoming a thing of the past. My first job had almost free insurance, so when I got my next job I was shocked that I had to “pay” for my own insurance out of my paycheck. Pleasant atmosphere is really important and undervalued in my opinion. Going to a job with a hostile work environment and really ruin your work experience.

  9. anna

    LOL catchy title, for sure! My salary is a below market value, but the benefits are pretty awesome with free vision/dental/life, reasonable medical, and lots of vac/sick time. For me, another big reason was the stability, since I’ve been laid off before.

    1. KK

      I couldn’t help myself. I haven’t had a post with a provocative title in a while πŸ˜‰ Stability is important to me too. A good friend of mine put in an offer on a house a few years ago only to find out (via the mortgage company) that she had been declined. She was shocked to be declined because she has very good credit and was making a good salary. Apparently when they called her employer to verify her income the employer told the broker that she was going to be unemployed soon. It was a really horrible experience for her and one that taught her (and me) about the importance of stability at the job.

  10. Janine @ MoneySmartGuides

    That’s so true. So many people are 100% focused on the salary, and there are a lot of other factors that go into your decisions. Great post!

    1. KK

      It’s not always about the money. I look at benefits in terms of money that they will save me. If I made more money but had to pay for my health insurance out of pocket making more money might not be worth it. It’s all about doing a little due diligence before you begin working with a company.

  11. Well Heeled Blog

    The job I’m taking after graduation has pretty awesome benefits – free health insurance premiums for myself and family, plus $5 copays for almost every treatment, and an annual 5% retirement match to your salary + bonus.

    1. KK

      Wow that’s an amazing benefit! Is your company hiring πŸ˜‰ At my office the “family plan” is several hundred dollars a month (and that’s after the employer pays some of the premium).

  12. CF

    My current benefits are pretty good. 3 weeks vacation, matching RRSP contributions, gym, fitness classes and ESPP. My previous employer had an excellent pension plan and 4 weeks of vacation! The benefits you get are definitely an important part of your compensation.

    1. KK

      Oh wow, fitness classes and a gym sound great. We have a gym onsite but it’s for our clients. 3-4 weeks of vacation is pretty nice.

  13. Betsy @ ConsumerFu.com

    A friend took a job for the benefits package. She had five kids and her husband’s company was closing and while he would be one of the last to lose his job she wanted to make sure they had insurance and other benefits. I think the benefits package takes on a different meaning when you are older or if you have a family.

    1. KK

      You’re definitely right. When you have a family you sometimes have to take a job you wouldn’t ordinarily chose based on benefits. My sister chose her current job in part because of the benefits that were offered (my bil can’t put the kids on his insurance, so she needed to put them on her family plan).

  14. Laurie @thefrugalfarmer

    I’m sorry, KK, but I just couldn’t get past the “package” thought long enough to really concentrate on the post, LOL. Great play on words. A little too great! πŸ™‚ The “My first experience with packages” paragraph really had me looking the other way. πŸ™‚

    1. KK

      I snickered to myself as I was typing it, then debated back and forth if it was too graphic, before saying “why not?” My original title was “Benefits at work: Why they’re important” which wasn’t nearly as entertaining or eye catching.

  15. Brian @ Luke1428

    All of these are offered at the school where I teach except free meals (although we do get discounts in the lunchroom). And of course I get child care – my 4 kid’s teachers get to put up with them all day. πŸ™‚

    1. KK

      My mom is a teacher and she gets discounted school lunch if she wants it (sometimes she definitely doesn’t, but other times the meals are really good). I hadn’t thought about school as free daycare, but you’re right. You drop them off and then go about your day.

  16. Budget and the Beach

    I LOVE the title. Brilliant. I agree you have to factor bennies in with your salary when you are offered a job. Its got its own monetary value. I really, really miss benefits with being a self-employed person. I probably miss that the most.

    1. KK

      6th grade sense of humor here. I just couldn’t help myself. Being self-employed would be pretty great (I would imagine, I’ve never been self-employed), except for when you get sick or want to take a few days off and don’t get paid when you’re not working. Not having health insurance (or paying an arm and a leg for it) is one of the things that has kept me fearful about becoming self-employed.

  17. Broke Millennial

    Couldn’t agree more! My company gets away with paying us below industry standards because our benefits are so much better than competitors. 4 weeks vacation your first way, 5 after your first year then 5 sick days, 4 floating holidays, insurance that’s paid for by the company (or our lower salaries) that include health, dental and vision. Plus a decent 401(k).

    P.S. Awesome title!

    1. KK

      5 weeks of vacation is amazing! Sounds like the benefits totally make up for the lower than industry pay. Paid for insurance is also huge (esp. these days with insurance being turned on it’s head).

  18. Clarisse @ Make Money Your Way

    My friend told me that their company has a free coffee vending machine and when they have overtime they also get a free meal. Even I’m working as a VA my client also gives me a vacation time she lets me choose if I want to get paid for my unused vacation time or I will use it.

    1. KK

      Free meal for overtime would be nice (I would have gotten a free meal tonight ;-)) I’m not sure how common paid vacation is for a VA, but I’d imagine it’s not that common.

  19. DC @ Young Adult Money

    From employee stock purchase plan to 401k to time off, I am very happy with my benefits and it’s a big reason why I look at my employer in such a favorable light. I think very few people factor in their benefits when they think about their salary and what they receive in return for work. I’ve written about this in the past and it’s definitely a reason that working for a large company can sometimes trump working for a small company.

    1. KK

      Benefits can really make or break a job. I think you’re right, many people don’t really think about the true value of benefits. Matching 401k can be huge in some circumstances. I work for a non-profit, but they give a percentage of our salaries after 2 years of service which I think is awesome, esp. for a non-profit. There’s certainly something to be said for working for a big company.

  20. Anne @ Unique Gifter

    There are so many people where I work who really don’t understand benefits. One of my favourites, “I made more money working for myself, but here I have benefits.” ….In shocking news, you can trade cash for benefits! Ugh. Yes, we do have very good benefits here, but if you made more before and couldn’t appropriately allocate it, that one’s on you buddy.

    1. KK

      “In shocking news, you can trade cash for benefits!” Love it! You’re so right, sometimes people just don’t make any sense when they’re talking about salaries and benefits.

  21. Amanda

    I was very excited when they offered me health benefits at my last job, as it was an underpaid, very small non-profits arts origination – even the bigger arts orgs don’t usually offer any benefits packages! It was great, and probably kept at that job longer than I would have stayed otherwise. But my new job has an insane benefits package in comparison. I wasn’t expecting anything because I’m only on a 7-month contract, but I get a pension, health benefits, paid sick days, 10 vacation days, and more that I haven’t even looked into yet. It’s even better if I get hired on full time!

    1. KK

      Wow those are pretty amazing benefits, especially since you’re working on a contract. So far I haven’t stayed anywhere solely for the benefits, but if I worked somewhere with a really great package I can totally understand how it would be hard to leave.

  22. Kali @CommonSenseMillennial

    Benefits definitely matter! That’s one of the reasons I’ve stuck with my job as long as I have. The benefits, both tangible and otherwise, are great. And what I mean by “intangible” benefits are things like unlimited sick days (if you call out, it’s fine, no one questions you and you don’t have a “sick day bank” that a day is subtracted from), freedom to come in late or leave early for appointments, and being able to self-manage your work. It sucks being stuck in an office job, but these sorts of things make it much better and I’m grateful for all the freedom and flexibility my job offers. It really does make a difference!

    1. KK

      Unlimited sick days, wow! That’s almost unheard of these days (but I love it, because it shows the employer trusts you and values you and doesn’t think you’re going to take advantage of them just because it’s offered). Those “little” things like being able to manage your own work and not being constantly watched or “clocked” is an amazing benefit.

  23. Kyle | Rather-Be-Shopping.com

    Being self-employed, I have to man-handle my own package which is quite expensive and often leads to chaffing. I almost went to work at UPS a few years ago unloading trucks at 4am just to get their health benefits. My current plan is grand-fathered in but who knows what the future holds. Very scary times.

    1. KK

      “man-handle my own package” lol. You totally win the most vaguely obscene comment contests (which I was totally asking for in my title lol). I’ve known a bunch of folks who have worked at Starbucks just for the benefits.

  24. Micro

    I had a good 5 months of unemployment after college of job hunting. Over the months, I slowly started lowering my expectations for what I would get salary wise. When I finally did get a job, I was quite happy with my benefits package. I think those hard months helped make me a little more appreciative of what I was getting.

    1. KK

      I was in a similar situations after I graduated from both college and grad school (I definitely had unrealistic expectations). Finding a job wasn’t easy, but thankfully I was able to land good jobs with good benefits.

  25. Charles@gettingarichlife

    When i was younger it was all about salary. At my age I realize that great benefits is much more important. I’m thankful my employer ranks in the top 20 for benefits.

    1. KK

      Benefits are such a huge part of a compensation package, it’s sort of nuts that we aren’t better informed at a younger age. I remember my parents talking a little bit about benefits when I was little, but when I starting looking for my first real job, I had no idea how important benefits were.

  26. Dear Debt

    I am so happy to have benefits again, finally! I have 100% health and dental, partial vision and also alternative care with massage, chiro and acupuncture! I need to schedule some appts to make sure I am getting use out of it. I’ve already saved $600 on prescriptions and contacts by being insured, compared to last year when I paid for everything out of pocket (after only qualifying for some low income discounts)

    1. KK

      Yay for benefits! I’m so glad you’re back at work. Massage and chiro are pretty awesome benefits. I would love to have a benefits package with massage included.

  27. Erin @ My Alternate Life

    I don’t have benefits now because I’m self-employed. But at my last job, I had a basic high deductible medical plan, 18 days of PTO (this included vacation & sick time), and an okay 401(k) plan. Nothing too exciting!

    1. KK

      My current plan is a high deductible, it’s fine and I’m glad to have some coverage, but I definitely hear you with that kind of “meh” plan. Sounds like being self-employed didn’t really mean that big of a lose in the benefits department.

  28. Mark

    When I look for jobs, I always ask for benefits offered by the employers and many a times I get cold looks from the recruiters. I have seen so much differences benefits make. Matching contributions, premiums for health insurance, time-off, sick days, disability insurance. All in these could be worth well over 10K in many cases.

    1. KK

      Absolutely. When you add up the cost of your benefits, you might have a significantly better compensation package at a much lower salaried job. Good to do a comprehensive review of both to make sure you’re getting everything you need and want.

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