Wednesday, December 31, 2014

Foreign Service and Personal Finances

One big thing I look back on at the end of the year is our personal finances. This year I'm sharing something about that since it was a big transition year. One thing my wife and I debated for a long time was if we could afford to take the plunge into the Foreign Service. We had great paying Civil Service jobs in the DC area, but our pay was offset by the great sucking expenses of DC area living. It made us wonder if it was truly worth it to stick with those careers.

I heard from many of my new hire classmates that joining the Foreign Service was a pay cut. This was true for me and very true for my wife as she became a "trailing spouse" and quit her job. I knew she could eventually get some sort of embassy employment but nothing like she was making before.

The pay you may see on the job advertisement isn't the only consideration for this kind of career. The Foreign Service has many monetary benefits to ease living overseas. We get a cost of living allowance in high priced countries like Sweden and there's other pays to offset hardship conditions in other countries so each tour will be financially different.

They provide us housing and utilities while living overseas. We don't mind not choosing our housing but that trade-off isn't for everyone. We're also not building equity in a house since we sold ours. I think it's worth it since we don't have the headache and expenses of renting out a house from overseas.

I knew we couldn't compare working in DC to working abroad because our spending patterns would change. Overall, the added benefits and changes in spending have worked out as I expected. Here's a peek at that in case someone else is grappling with the same decision.

Typical Americans Compared to Our Expenses




Below is what the typical family spends their money on from most to least alongside our expenses. The chart doesn't include amounts or percentages since that's personal information for our part. I'm also leaving out personal categories like investments, health care, children, education, etc.

I added in a guess for vacation travel spending since it wasn't in the average household lists I found. It might be included in the transportation and entertainment categories but I call it travel in the chart. Regardless, I found the average vacation spending and plugged it in the list where it might fit so I can compare. This is just a rough look and I'm not an economist so bear with me. On the right of that typical family list is how we spent money on average over the past 3 years before the Foreign Service.

NumberTypical FamilyOur Expenses
1HomeHome
2TransportationFood
3FoodTransportation
4Misc ExpensesCash
5TravelMisc Expenses
6EntertainmentTravel
7CashEntertainment
8ClothingClothing

Houses and cars (with gas, repairs, etc.) are expensive and we were typical there. We enjoy eating out and it pushed food higher on our list. We threw around a bit more untracked cash so apparently we used cash more than the typical family. Our travel and entertainment were a little lower so it might be in those categories if I tracked cash better. I just spit this out from online banking so there wasn't much effort on this review. Overall, we were mostly typical.

Before Foreign Service Compared to Overseas in the Foreign Service


This wasn't just a matter of changing jobs. It's been a complete lifestyle change reshaping our personal finances. We're not like typical Americans while living overseas:

NumberBefore FSOverseas FS
1HomeFood
2FoodTravel
3TransportationMisc Expenses
4CashCash
5Misc ExpensesEntertainment
6TravelTransportation
7EntertainmentHome
8ClothingClothing

We still eat out and it's more expensive here so it's our #1 expense! The home category plummeted to just stuff we've bought for the apartment such as some 220V small appliances. Not paying for housing frees up much more money for other things like travel and entertainment. I joined the Foreign Service to improve our ability to travel and expand our reach to more of the world and it's worked so far. We may have less income but I think we get to use it in better ways.

We don't have cars anymore and use the great public transportation in Stockholm so transportation expenses plummeted. This will increase in the future as we need cars again. We're setting aside money to help with future transportation expenses since this will vary by country.

Housing costs will become a problem again during stateside assignments. There aren't any added pay benefits there other than higher locality pay in DC. It'll hurt having to pay for our own housing after this. We're not building equity in a house now so that would be a complete retirement expense if we don't save up some money or buy another house. It's part of the trade-offs needing some attention before retirement hits.

Where will we go and what kind of housing do we want when we're done with this? We don't know for sure. In the meantime, it feels good not being locked into something. I prefer to save up some money and remain flexible. We're nomads with nomad expenses right now and it works well until we decide to finally settle somewhere... assuming we ever do. :-)

Friday, December 26, 2014

First FS Post - 6 Months Later

It's hard to believe we've been in Stockholm 6 months already! That's 1/4 of the way through my first Foreign Service assignment. We've traveled around Europe a little and each time we return to Stockholm it feels a little more like coming home. It's amazing how quickly we adapt and settle into new routines. Seemingly different surroundings can become comfortable in a short time by fully living in the new place. Here's some thoughts about this place and time so far...


The darkness this time of year is a little weird but tolerable. The picture above was at 2:30PM before the impending sunset. The sun was up from 8:45AM to 2:50PM. In contrast, Washington DC had sun from 7:25AM to 4:51PM. The noontime sun sits low on the horizon if it's not overcast and hidden. The weather makes a big difference so we feel like hibernating when it's overcast most of the time.

It's strange having our American holidays here. We've had Independence Day, Labor Day, Columbus Day, Veterans Day, and Thanksgiving since we arrived. We got those days off and did our normal things like enjoying a big Thanksgiving meal while the Swedes were oblivious to our American holiday celebrations. It's also great getting the local holidays off because Christmas Eve, Christmas, and Boxing Day are all Swedish holidays this week. Next week we get both New Year's Eve and Day off as holidays and the following week is Epiphany Day on Jan 6th. We also get MLK as the American holiday so this time of year is broken up with lots of holidays. I can definitely get used to this part of Foreign Service life. :-)


One thing we've learned at our first post is having Diplomatic Post Office (DPO) services is a wonderful lifeline for things we're accustomed to having around. Our bank transactions have turned into lots of Amazon and Wal-Mart orders. It's not just because it's so much cheaper than buying things locally, even though that's a major part of it here. It's because there's different basic things we're used to having as certain American brands like soap, deodorant, pet food, and various human food items not having good equivalents here. On the flip side, there's plenty of things we find here that we won't find elsewhere. I'll definitely miss things like kanelbullar and glögg when we move. Cinnamon rolls and hot mulled wine anywhere else will make me think of Sweden.

Having decent Internet is another thing we'll be looking for in my next assignment. Stockholm is spoiling us since we've easily had 2 or 3 streaming video sessions going along with a Skype or Google Voice call at the same time. I think our minimum standard to survive will be at least one good streaming video or video Skype session. There are many posts where that'll be a problem and I'm not sure how we'll adapt. We're just that spoiled. :-) We'd be forced to venture out more for entertainment and only have voice calls to the U.S.! How could we ever cope with such hardships? Weird, we didn't grow up with Internet access but we can't imagine life without it now.

Seriously though, we've ventured out around Stockholm and we've taken a few trips these past 6 months instead of just being entertained online. After all, that was the whole point of doing this kind of job. I can't imagine anyone joining the Foreign Service with the intention of staying in their homes and not seeing anything of the world. Sometimes we fall into the work/home grind and forget to enjoy more in life. This is a reminder for myself (when I look back on this) and everyone else reading this to continue doing this one thing we've been fortunate enough to do this year...
ENJOY LIFE!




Thursday, December 4, 2014

Civil Service to Foreign Service Finally Done

Yes, I started with the Foreign Service back in February of this year. Yes, I brought along copies of my personnel record and filled out tons of typical government paperwork showing my 2 1/2 years of civil service time. No, it didn't all magically transfer over on my first day. This is still government work.

I took the suggestion from another blog (see Not Everything Transfers) and my new hire classmates on submitting my last civil service leave and earnings statement to speed up the transfer of my leave balances. I submitted it to payroll help and it worked wonderfully to get my annual and sick leave credited. The rest of the official transfer was soooo much slower.

First, I had to wait for Air Force civilian personnel to transfer hard copies of my records to OPM and then OPM transferred them to the State Department to scan in to the eOPF system. That little "e" means electronic just like the Air Force eOPF system. This is the government so the systems are completely different and not connected in any way other than using the same acronym. We love acronyms in the government.

I kept prodding records people on both sides and everything was finally done and loaded September 12th. Yes, 7 months to essentially print paper and scan paper involving 3 agencies. I immediately put in the request to update my Service Computation Date (SCD) along with transferring my retirement contributions.

There's no hurry at all for the retirement stuff but that SCD is important for my annual leave. We earn vacation time at 4 hours per pay period with less than 3 years of service. I passed that point in July and should be earning 6 hours now. I'm not. My SCD was still set for when I started at the State Department because they haven't updated my records yet for my total government civilian time.

So I waited. October passed. I submitted another request asking how long this stuff takes. No answer other than another HR ticket number. November was almost done so last week I started contacting the office I thought was responsible. The HR help system tells me nothing about who's supposed to be working on it. I hear nothing for a few days. I politely emailed the person in charge of that office... now today my SCD is finally updated... almost 10 months after being hired!

Sometimes government works at the speed of gentle prodding around the bureaucracy. I say "gentle prodding" because I learned long ago that firm requests or loud demands sometimes gets you shuffled to the bottom of someone's pile of crap to do. A polite query to the right person about what's possible sometimes gets you taken care of immediately. It seemed to work again for this.



Skills Incentive Program (SIP) Pay

One perk of being an Information Management Specialist (IMS) in the Foreign Service is the ability to earn additional pay from the Skills Incentive Program (SIP). We can get 9% or 14% added to our pay depending on several IT related certifications or degrees. It looks like a pretty good incentive to me so I'm surprised a majority of my fellow IMSers don't take advantage of it. I think there's only 40% of those eligible collecting this optional pay.

I already have Project Management Professional (PMP) certification (a 14% cert!) but I earned it before being hired so it really hurts I can't get SIP for it. I understand it's supposed to be an incentive to improve myself now instead of paying for something I already did. It still hurts I already checked it off the list of possible certs to use for SIP. I should be able to let it lapse and earn it all over again in the future but what a pain.

I studied on the side during my IMS training for the Systems Security Certified Practitioner (SSCP) exam and earned that certification. It took a while to get the certificate awarded and then the SIP panel only meets every other month but this week I got the approval so I'll start getting 9% more pay. So I got that going for me...