Fatter Paycheck, Part 1!

My August 15 paycheck was the first to reflect my new salary, whoo hoo! I definitely appreciated its fatness, although it still has some room to go once my bonus hits next week, after which I will no longer be paying Social Security tax or making 401k contributions. The remainder of my 401k will be paid for out of my bonus in a lump-sum.

Having been promoted from 3rd Year Analyst to Associate, I recently got a handsome 20% raise! For those of you following along, that takes my salary from $80k to $100k. To any potential haters out there with income envy, let me clarify that my compensation is commensurate with my hours and the stressful daily demands of my career. I like the mental challenge of what I do, but the people are difficult, and there is a LOT of pressure to perform. I easily work a minimum of 12 hours a day, and often longer if you include the hours I spend at client dinners. So be sure to ask yourself, do you want a six-figure salary at the expense of working longer hours? Or would you rather work fewer hours and make less money? It's a critical question.

On days that I don't have a client dinner or event, I usually hit the gym, eat a small dinner, and go straight to bed. I don't have much time for myself, but I am lucky in that I don't have to work weekends, which is common for young professionals in the finance industry. As such, I enjoy my weekends to the max, and I have a lot of friends in the city, so I am ok with my salary vs. work hours trade-off. I will probably re-evaluate in a few years, but for now I am tempted to stay in the industry, because the pay-off for all of the torture I endured my first three years (and continue to endure) is right around the corner. As you can see from my 20% raise, the salary (and bonus) curve is VERY steep, and I'm just at the bottom of the ascent, so if I were to drop out now and work somewhere less demanding, I would be forfeiting some major dough. That's what gets me through the very tough days- a big pot of gold at the end of the rainbow, and it keeps getting closer.


That said, let's take a close look at my paycheck:

Biweekly pay before taxes: $4,167

Less:
Federal Income Tax: $722
Social Security Tax: $246
Medicare Tax: $58
NY State Income Tax: $227
New York City Income Tax: $133
Fitness Exchange: $19 (corporate-sponsored fitness program, deducted from my paycheck)

Less, pre-tax:
FSA Contributions: $37
Medical/Dental Plan: $38
Vision: $4
401k: $125

I did some rounding here, so after all deductions, my bi-weekly paycheck ends up being about $2550. At the end of this month, I expect it to be around $325 greater without SS and 401k deductions (not exactly sure how much, since the 401k is deducted pre-tax and so my taxable income will go up a little bit). My previous post-deduction income was just around $4k/month, and while I sometimes spend about that much after everything is said and done (see last month's breakdown here) hopefully the extra money coming in will be able to go straight to savings. July was an exceptionally expensive month for a few reasons, so check back in a week and a half for August's analysis.