Financial Woes at Work

I’ll let you in on a little secret: My school isn’t doing too well.

See, if turns out that when the economy goes bad people go back to school. But what they don’t tell you is that when the economy goes bad people go back to PUBLIC school. Apparently going to private school is considered a luxury.  (Expect my post on the benefits of private vs public school shortly 😉 )

See, I work for a private college. Which means – if people stop going to private schools – then people stop coming to MY school. According to what I know (which is what gets filtered by the President down to us lowly faculty) our school is spending more money than it has.

Just like when I realized I was spending more than I had and needed to curb spending –  my school has decided to do the same.

And now this is getting personal.

An email from the President of the University outlined quite a number of ways that we would be slowing down our cash flow. Some effect me. Some didn’t. Here are the ones that do:

  • Reduced matching retirement. Yup you read that right. Instead of getting 6% matching I’ll only be getting 3% matching. For the next 6 months for sure (possibly longer). I’m tempted to lower my retirement contribution to only 3% now and put that additional 3% income in to debt. I was investing up to the match point. Or I could leave it where it is. I’ve also considered contributing the extra income I’ll get from the tax brakes to my retirement to make up for the difference of what I’m losing. Can you see how lost I am here? I don’t know whether to reduce my contributions, leave them the same, or increase them!
  • No staff raises next year. Now, to be honest, I’m not sure if this effects me or not! I’m “faculty” and not staff. But I don’t know if they meant no one that is hired by the University would get a raise or if just the non-faculty employees would not be getting a raise. Either way, that sucks for them! I hope I still will get a raise. We’ll find out when I get my new faculty contract later this spring.
  • All of them together have led to: My General Dissatisfaction. When I started my job I was given the impression that the University was doing well. Myself, and the other new faculty members who started at the same time, have felt that we were lied to by the University as to how they were doing financially. Well, not lied to, but the state of the University was intentionally misrepresented to us.

I have doubts about the long-term viability of the University. I know I will have a job for the next few years – but to be honest – I’m scared that in 5 years the University might go under. This leaves me feeling very anxious. Now the University may rebound with flying colors – but an uneasy pit in my stomach thinks I have 10 years here tops.

I’ve talked to BF about this and what this means for my career. I moved to Kansas with the intention that this would be my permanent home. That I would be able to make a life for myself here. Now it seems that I still must plan in the back of my mind for the possibility that in 5-6 years I’ll need to make another big life change to switch jobs again. It makes me very uneasy. I want to be here, doing what I do, until I die. At least, that is what I want now. This makes it all the more clear how important it is for me to A) get out of debt NOW! and B) start saving up a year E-fund. Yes, I said that, a year. In academia you (typically) only get hired once a year – so it could be a long stretch between jobs if I didn’t find something right away.

I don’t like that this is happening. But all I can do is be the best that I can be and try to prepare for the future – good or bad.

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16 Responses to Financial Woes at Work

  1. Is it a for profit or a non-profit private school? The for profits look like they’ll be taken to the cleaners, at least as far as federal funds go, but I think non-profits should benefit from demographics.

  2. I don’t know if I have commented before, but I have been reading your blog for awhile. While I don’t have debt, I relate to your blog because I am in academia as well (working towards a PhD in engineering). Anyway, I wanted to comment today because I work/learn at a public institution and we too are being hit hard by the economic situation. We received HUGE cuts from the state resulting in tution increases of 20+%, staff cuts, TA cuts, limited new hiring of faculty… it is pretty bad. I’ve heard (but have not validated for myself) that it is worse here (WA) than in other states, but regardless my point is might not be doomsday for your university. I think that many others are in the same boat and we can’t all go down… right?

    • SS4BC says:

      You may be right! And I hope you are. I really do. Which is why I’m just going to stay put. I know there are Universities that are doing better than we are, some that are comparable to where I’m at now.

      I know all places are getting hit hard – a lot of the reason public schools are is because state’s are decreasing funding because of the economy. So I guess we’re all just doing poorly.

      Good luck with the PhD in engineering and thanks for the comment. =)

  3. I think your idea to cut your retirement down to 3% to get the match and then pay the rest to debt makes sense to me. Just wanted to give you my unsolicited opinion. 🙂

    I went to a school that sounds similar to yours for undergrad, and they’re really having a hard time right now too. I can relate to what you’re saying. I hope things get better!

    • SS4BC says:

      Heheh I appreciate you “unsolicited” opinion. It would amount to an extra $100 per month (approx). Not sure if it is worth it or not.

  4. HS says:

    This theme looks familiar!! where did you get it lol

  5. cadence says:

    The first college I worked at out of grad school was so tuition-dependent they waited until after add/drop every year to announce raises. The university I’m at now became a university when one small college bought out a near-by struggling college of similar size. I think things are tough all over, and taking a look at how your college/ university has positioned itself (endowment? funding sources? operating budget? if any/ all of those numbers are published) will give you an idea of how stable it may be.
    And my bit of unsolicited opinion on the retirement front: if you’ve been comfortable with the 6% I’d keep it where it is. You’ll be happy to have the tax-free 130-odd dollars sitting there month after month compounding and earning interest even when your employer can’t pony up the match. but that is me, and I possibly have a problem with over-saving for retirement.

    • SS4BC says:

      Yah, your first position sounds very much like where I’m currently at. They are dependent on every student and every dollar. They didn’t make the financial announcement until after the deadline to register for spring. So I’m guessing those numbers had a large part to do with whether they would continue the retirement matching and the raises.

      Thanks for the advice about the retirement. That is where I’m leaning as well. I think my future self will appreciate me just not touching that money since I’m only young once. =)

  6. karen says:

    I would leave your contribution as is. I actually increased mine when we lost our company match. We get a match back this year…but lower than before (and note we are a large and profitable company. Cost savings)

  7. eemusings says:

    That is scary, And I would feel frustrated and misled too.

    Umm..I second Life as a Purse, I’d put that towards debt. Every little bit counts and $100 is a decent ‘snowflake’!

  8. TMcImmy says:

    It’s amusing to me that in acadamia “an uneasy pit in my stomach thinks I have 10 years here tops.” is a reasonable statement. Especially compared to biotech where “I’ll be amazed if my company hasn’t folded/been bought out in the next 5 years” is the norm!

    • SS4BC says:

      Well, I know I don’t really need to explain this to you, but a 40 year old chemist looking for a new academic position without being recruited or a Noble prize winner doesn’t have many options in this field. And even fewer if they want to stay geographical similar.

  9. Pingback: It’s Worse Than I Thought «

  10. Pingback: At Least I Have a Job « Small Steps for Big Change

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