Author Topic: Job Change - 42.2 miles daily commute vs 18K paycut  (Read 2384 times)

ldhagen

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Job Change - 42.2 miles daily commute vs 18K paycut
« on: November 15, 2016, 10:31:21 AM »
I'm currently commuting 34km (21.1 miles) each way, daily, to my current job. I have a job offer in hand for a position that is 3.7km ( 2.3 miles) away which also provides a free bus pass as a perk. The downside is that the new job is also an $18,000 paycut. Am I crazy for thinking of taking it?

I'm currently nowhere near my FIRE goals and losing the extra income is going to hurt. However, the position is with a non-profit that I truly believe in, has amazing perks and will likely help my career move in the direction I want to go in the long run.

I'm happy to answer any questions that come up in the comments.

Malum Prohibitum

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #1 on: November 15, 2016, 10:34:15 AM »
Well, since you asked, yes.  Why not move closer to your current job, keep the 18k in annual income (that's a maxed out 401(k) contribution!) and reduce your commuting expense?

I'm a red panda

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #2 on: November 15, 2016, 10:36:33 AM »
How does the 18k change your total income? How will it effect you day to day budgeting and your savings rate.

For instance, if you currently make $250k, then I'd say take the cut, reclaim your time and work for a company you believe in.  I'd have harder time giving that advice to someone making $35k .

ShoulderThingThatGoesUp

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #3 on: November 15, 2016, 10:43:56 AM »
Have you asked them to meet you in the middle on salary? They might do it...

charis

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #4 on: November 15, 2016, 10:47:28 AM »
A 18K salary cut may affect your salary potential thereafter significantly.  Would that delay your goals to FIRE more than you'd prefer?  And if you are planning RE, what does the "long run" of your career entail?   I took an even bigger pay cut once, but I was young, at the beginning of my career, and had no other appealing options.  I also loved the job, had no commute, and had no idea what MMM was.

ldhagen

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #5 on: November 15, 2016, 10:48:10 AM »
Thanks for the quick replies. I'm currently making $60,000 and would be taking a position that would pay $42,000 plus the possibility for bonuses (not depending on those though). In terms of affecting my budgeting, this would directly cut my savings. However, with the bus pass I could sell the car (2012 Ford Fiesta) which would cover part of the loss for the first year.

Why not move closer to your current job, keep the 18k in annual income (that's a maxed out 401(k) contribution!) and reduce your commuting expense?

I currently live in a place where I'm paying $500/mth for rent, utilities included. Places for rent near my current place of work are between $1200 and $1800 for a similar place. It would still be a net savings, but I'm quite unhappy with my current position (hence why I have a job offer in hand).


bobechs

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #6 on: November 15, 2016, 10:49:28 AM »
I take it that your current career is not math-intensive in any way, nicht wahr?

Otherwise I'd think that you would be able to calculate the cost of commuting to your present job (including the value of your time if you choose to do so) and compare that to your projected cost of commuting to the new job and determine by simple arithmetic whether that is more or less than the pay differential you state.

All those numbers -except the pay differential- are within your scope of knowledge but you have withheld them from us.

A slightly more sophisticated analysis would take into account taxation, for a net post-tax comparison, but you hold all those numbers too.

Rubyvroom

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #7 on: November 15, 2016, 11:07:24 AM »
...has amazing perks and will likely help my career move in the direction I want to go in the long run.

I'm curious about the perks. Do they have a higher 401k match? Do they have better or cheaper benefits? Would you be on a fast track for promotion? Etc.

I just hope you're looking at total compensation, not just the salary reduction, though $18K is a lot of ground to make up with "perks." You'll have some savings from no longer needing a car, but that won't be $18K.

You can't put a price on happiness though, so if you're miserable at your current job and believe you would not be miserable at the new job (and would have a ton more free time with no commuting), I'd say go for it. It might take you further away from FIRE on paper, but it might mean you arrive with a much healthier attitude. Also, a better attitude at a new job you enjoy might take you farther in your career than a negative attitude due to disliking your job.

That said, $18K is a LOT. You just have to weigh the pros and cons!

frugaliknowit

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #8 on: November 15, 2016, 11:40:13 AM »
30% pay cut?  No way!!

Malum Prohibitum

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #9 on: November 15, 2016, 12:49:30 PM »
Thanks for the quick replies. I'm currently making $60,000 and would be taking a position that would pay $42,000 plus the possibility for bonuses (not depending on those though). In terms of affecting my budgeting, this would directly cut my savings. However, with the bus pass I could sell the car (2012 Ford Fiesta) which would cover part of the loss for the first year.

Why not move closer to your current job, keep the 18k in annual income (that's a maxed out 401(k) contribution!) and reduce your commuting expense?

I currently live in a place where I'm paying $500/mth for rent, utilities included. Places for rent near my current place of work are between $1200 and $1800 for a similar place. It would still be a net savings, but I'm quite unhappy with my current position (hence why I have a job offer in hand).
  So go from above average household income to below average household income?  Hell, no.  Not me.  It's like you are ready to semi-retire . . .

MsPeacock

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Re: Job Change - 42.2 miles daily commute vs 18K paycut
« Reply #10 on: November 16, 2016, 06:36:53 PM »
I wouldn't do it. It is too big a percentage of your income.

Since it sounds like you don't like your current job, I'd encourage you to keep looking. Meanwhile consider if there are ways to make your work more tolerable - such as possibly teleworking, making sure to use your leave and sick days (save some for sick days and use some for mental health days). Are there other benefits to the current job that make it worth tolerating for a while longer (aside from the current pay)?