Thursday, November 1, 2012

Answering Reader Mail: Can an EA salary support a family?

“I was wondering if as a career EA, you can make enough to support a family. I've been an EA for about a year now and am thinking about the future. Looking forward to hearing your thoughts!”

Thank you for the great question and good job for thinking ahead!

Research states you only need to make $40k a year to be happy. That's the line to get out of poverty and live comfortably. Anything beyond that amount is not jet money. Jet money being you can buy your own private jet. So unless you make billions of dollars, the standard of living between $40k and billions won't buy you exponential happiness. Always remember, the best things in life are free!

I believe you can raise a family on an EA salary whether alone or with a significant other. If you save, plan well, only buy what you need and prioritize well there is no reason you can't. If you have a spouse, that just makes life easier with a little bit of spending money to boot.

So the short answer is yes... Here are some money management tips I've learned over the years that may help you. However, you seem very bright so you may know all of this already! Still, worth repeating!

1. Always buy the most expensive health insurance you can afford.

Accidents and mishaps do happen so you should always have insurance whether it is an HMO or PPO. If you have extra needs, this is even more important and buying the best plan. If you don't qualify for insurance on your own or lose your job - there is COBRA, your work's insurance plan, or your spouse's.

2. Pay yourself first.

Learn the value of compound interest and each paycheck pay yourself to your savings accounts as much as you can, typically 10-35 per cent of your paycheck. This also means doing your taxes to get the best refund and automatically saving that instead of spending it. Also look thru your employee handbook to save as much money as possible with your company matching 401k program and pre-tax contributions, employee discounts and perks, paid on going education, flexible spending accounts, etc.

3. Save, save, and save.

You should have 3 savings accounts - retirement, rainy day, and emergency. Retirement is your 401k, CDs, cash, etc. Rainy day funds are for your vacations and major purchases. Emergency funds are for when you lose your job, want to switch jobs, have to buy a car, unforeseen medical bills, or anything urgent that you need. Retail therapy does not count! ;)

Your paycheck should be direct deposit and so should the savings you pay yourself. This way you don’t have to think about it and take precious time to take care of these tasks when you could be spending it elsewhere. While you are at it, do as much automatic or online bill pay as you can - rent, phone bill, etc.

4. Do a great job.

Do a great job and learn to negotiate to a better salary or when you job hunt after you've gained a lot of experience. Take note on any outstanding kudos you got from your bosses and know your salary worth compared to the rest of the industry. Are you bilingual, certified in programs, or bring something extra to the table? To some degree everyone is replaceable, on the other, some are so good at their job and well liked they would be such a loss to a company.

5. Pay cash.

Debt is very hard to pay off and it's best not to start if you can help it. If you don't have the cash to pay for something you can't really afford it. If you must use your credit card, pay it off at the end of the month and don't pay interest. Any time you pay interest you are paying money to get money. Doesn't make a lot of sense. If you do use your credit card, pick one that is free and accrues point, miles, or other benefits.

***New “rule” - when you ask me a question and I answer it, could you write an anonymous comment so I know you read the post? You can just write “Thx!” or something! :)

As always, I usually tweet any new posts I have. And anyone can email me questions and I respond only via this blog, not to your personal address. It usually takes me 3-4 days to answer.

I also write over at under Hollywood Executive Assistant.

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