Author Topic: 26 years old; should I take a $40k pay cut? *1 year update*  (Read 6332 times)

Civex

  • Stubble
  • **
  • Posts: 167
26 years old; should I take a $40k pay cut? *1 year update*
« on: August 15, 2015, 11:14:19 AM »
Major points:
1.) Currently in a job that about half the year I greatly dislike, and the remainder of the year is an OK place to work. Work situation is unlikely to improve, and in all likelihood will decrease.

2.) Current job pays ~$130k/year
   -I spend about 14 hours biweekly commuting to this job
   -Position offers very little in the way of professional growth or development

3.) Speaking with a government recruiter about an anticipated opening in my area
   - About as close to an ideal job as I could imagine; opportunities for teaching, leadership, growth, + a great work/life balance
   - About a 30 minute round trip commute (an easier commute (better roads, traffic than current))

4.) Potential opening can start as low as $70k and tops out at $105k. ->reading pay scale requirements I would likely fall somewhere between $75-80k.

Basically, I'm really interested in the position, but I am balking a tiny bit about the pay decrease. I currently save ~50% of my gross income, and realistically if I take this position I would decrease my savings by about ~50%. I doubt I would be saving much after TSP + Roth IRA. The other thing that comes to mind, is that I could almost go half time at my current job and make nearly as much money. I'm sure that there would be a lot of resistance to going to 0.5FTE if I could swing it, though. As to where my current finances are; I'm just about breaking even on net worth (graduated spring '14), with $80k in student loans as my only debt.

Another important point is that my girlfriend and I are looking towards progressing as a family, but are concerned about children when we both have demanding, stressful, and inflexible positions. If I took this position, I would work a normal schedule, and have more flexibility with my hours. For perspective, in the last year neither of us have ever come in late, left early, she has never had a lunch out, and I have maybe been able to leave work for lunch 3-5 times. Not that we greatly desire eating out, but I want to show that running an errand or picking up a sick child would be nearly impossible (not to mention I work 45 miles from home.) The reason I am looking for a new position vs. her, is that she enjoys her job and has a minimal commute. She is 100% for it and encouraged me to speak with the recruiter. I think I need to go for it, but wanted to get the opinion of other finance thinking types; in our relationship, I'm the one who worries about money.

So, would you do it? Thanks for you thoughts.
« Last Edit: August 13, 2016, 09:12:23 AM by Civex »

La Bibliotecaria Feroz

  • Magnum Stache
  • ******
  • Posts: 4547
Re: 26 years old; should I take a $40k pay cut?
« Reply #1 on: August 15, 2015, 11:26:17 AM »
It sucks to be miserable. You would still be making a good salary! And I think you would find some savings once you were less stressed and had a little more time. I mean, taking your commute from two hours a day to thirty minutes a day should save you buckets on gas and wear and tear, for instance. You might find yourself cooking more, DIY-ing more, etc.

Alternatively, you could struggle along in your current job for a couple more years and whale away at your debt.

Yankuba

  • Handlebar Stache
  • *****
  • Posts: 1357
  • Location: Long Island, NY
Re: 26 years old; should I take a $40k pay cut?
« Reply #2 on: August 15, 2015, 11:28:52 AM »
I would make the switch. Even if the job tops out at $105K, there are annual COLAs that add to the max (usually the rate of inflation). Additionally, in my agency, there are merit based raises each year of about 2% or 3% - so even though I'm technically maxed out in grade I still see 4% increases each year - which is $5K for you per year when you're at $105K. If you're really good you can also get merit awards (i.e. cash bonuses). Additionally, my agency is increasing the amount of money it will kick into the TSP.

Working for the feds you have the best job security, flex schedules (5-4-9 or 4-10) the ability to earn overtime/credit time (so you can run errands) and tons of sick/vacation time.

You also can't put a price tag on being miserable at work. If you greatly dislike your job now (for half the year) you may end up despising it in four years.

Left

  • Handlebar Stache
  • *****
  • Posts: 1159
Re: 26 years old; should I take a $40k pay cut?
« Reply #3 on: August 15, 2015, 11:35:24 AM »
I'd switch because you don't like it...

I like working for the fed, but to me, the fed benefits are just a lot of hype and not much more. I got better in private... even had a pension in private if I stayed long enough to get vested (didn't though, it was mostly an annuity that people buy into over the working years there). I get fewer vacation days as well :( insurance with fed cost more too.

but for all that, I like the atmosphere where I am with the fed, namely, I don't have the same "budget" concerns as a company looking for profit

Frugal D

  • Stubble
  • **
  • Posts: 230
  • Age: 33
Re: 26 years old; should I take a $40k pay cut?
« Reply #4 on: August 15, 2015, 11:54:34 AM »
We're in completely different sectors, but this was me 2 years ago.

My first job after undergrad was in banking and though I loved the deal making aspect of it, I was working long market hours for maniacal horrible bosses - the type of people who would readily throw you under the bus if it meant an additional $1 in their bonus. I kept my head down and ground it out for almost 4 years, long enough to pay off my student loans and stash away a couple $100k.

When I left I gave up a base salary of $125k and annual bonus of $90k which was sure to increase dramatically over the coming years. My parents didn't understand why I would leave that kind of money on the table to pursue a startup only paying me $80k with a lot of risk. I left because I was financially free to do so.

Sounds like most people are telling you to make the switch, but I would recommend grinding it out. Your 20's are for hustling and getting ahead. Keep working hard to pay off your debt and make the switch once you do. 

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: 26 years old; should I take a $40k pay cut?
« Reply #5 on: August 15, 2015, 12:25:27 PM »
What would make your job acceptable? Have you asked for it?

Kroaler

  • Pencil Stache
  • ****
  • Posts: 781
  • Age: 28
  • Location: Greenville, South Carolina
Re: 26 years old; should I take a $40k pay cut?
« Reply #6 on: August 15, 2015, 12:48:16 PM »
I'm in the same boat, except I make less money than you.  Currently I strongly dislike my job during the summer months because its a hot environment. ( I'm an automation specialist at a factory, unfortunately robots don't need a/c so they don't run it in the summer)  Also my commute is killer, every morning I sit in a 30 minute stand still traffic jam making my commute home 50 minutes instead of 20, there is no way around this.

   I could take much more satifieing jobs with awesome hours  but at 30% pay cut.  Right now I'm saving over 60% of my gross income.  If I take a different job that number falls to like 25%.    Currently I'm on track to Fire in 6 years.   A different more cozy job puts me to 12 ish years.


So for me here's what I'm doing,   I'm compromising,  I plan to work at my current job till I've got 50% of my fire money,   then take a different job I enjoy where time flies and every day is awesome.    This should only put me 2.5 years behind on financial independence because of the compound ding interest gig.   But financially taking a pay decrease now puts me too far behind.  Also I'm 24,  like the other guy says, your 20s is the time to hustle.  I'll take a cozy job when I'm 28 with an awesome starter stache and no worries about not saving enough.

Civex

  • Stubble
  • **
  • Posts: 167
Re: 26 years old; should I take a $40k pay cut?
« Reply #7 on: August 15, 2015, 05:17:35 PM »
What would make your job acceptable? Have you asked for it?

The biggest thing is my schedule; I work every other weekend, which also happens to be the opposite weekends of my girlfriend. We have had 1 weekend off together in the last 7 months, and I had to take PTO and work an extra holiday weekend to make that happen. I Have approached management 3 times over the last 7-8 months about changing this, and have been put off for the last 6 months. I brought it up again last week and was told flat out that it won't happen. --Note, all I asked was to change the weekend rotation, not cut out weekends completely.

We're in completely different sectors, but this was me 2 years ago.

My first job after undergrad was in banking and though I loved the deal making aspect of it, I was working long market hours for maniacal horrible bosses - the type of people who would readily throw you under the bus if it meant an additional $1 in their bonus. I kept my head down and ground it out for almost 4 years, long enough to pay off my student loans and stash away a couple $100k.

When I left I gave up a base salary of $125k and annual bonus of $90k which was sure to increase dramatically over the coming years. My parents didn't understand why I would leave that kind of money on the table to pursue a startup only paying me $80k with a lot of risk. I left because I was financially free to do so.

Sounds like most people are telling you to make the switch, but I would recommend grinding it out. Your 20's are for hustling and getting ahead. Keep working hard to pay off your debt and make the switch once you do. 

I agree that your twenties are for hustling, but on the flip side I have hustled for the last 7-8 years to get to where I am at. I have to look at the opportunity cost, which right now is time with my girlfriend while we are in our twenties, have minimal responsibilities outside of work, and make a good income. The government position does offer student loan payback because it is a difficult to staff area ( I think to the tune of $10k/year.)


TonyPlush

  • 5 O'Clock Shadow
  • *
  • Posts: 74
  • Age: 29
  • Location: Denver
Re: 26 years old; should I take a $40k pay cut?
« Reply #8 on: August 15, 2015, 06:31:44 PM »
25 year old in the opposite shoes of you. I work for the government and make $70K per year, and often dream about getting a higher paying job like yours. Being able to make your sort of salary would allow me to leave the rat race years earlier than in my current government position. Indeed, grass is always greener.

That said, I never pull the trigger simply because I love my hours too much. I take mini 3 day FRI-SAT-SUN vacations with my girlfriend once or twice a month, and I am never the friend who can't go to something because of work.

On the flip, I wonder if I am taking it too easy in my 20s. I could otherwise get a higher salary job, build a huge stash when it's most valuable to compound interest, and live like a king for the rest of my life. And while government work is certainly minimal and low stress, the feeling of insignificance, inefficiency, frustration, and pointlessness is very real.

As you can see, I am very torn myself, and am also torn on what sort of advice to give you. When I first read your post my immediate thought was you should gut it out for a couple more years, build up a stash of almost FI, then spend a 3 or so years in the government before you ER for good at 35 or some awesomely young number. But not being able to even spend weekends with my girlfriend would get to me, so I see where you're coming from. So in conclusion, I have no idea what to tell you and I'm sure this post was no help.

rmendpara

  • Pencil Stache
  • ****
  • Posts: 602
Re: 26 years old; should I take a $40k pay cut?
« Reply #9 on: August 15, 2015, 07:30:48 PM »
You're certainly in a position to take a pay cut. 75k salary is certainly not living in poverty.

The only reason I'd suggest you reconsider is due to your student debt. It's great that you've hit a zero net worth (at least you've managed to save up some!). Being non-mortgage debt-free is a very freeing experience. You won't have any issues of trying something new and worry about finances.

If it were me, I'd slug it out for another 12-18 months. Seems you could definitely become debt free, or depending on the interest rate, just stock away quite a significant chunk to help it start growing early in your career.

I'm a worrier and tend to worry about finances a lot (nit-picking on my budget and all early in my adult life), but now I've chilled out a lot about it since most things are just on auto pilot.

If you think you can put the max toward your 401k or equivalent as a couple, then you're probably doing just fine for a "normal" retirement in your late 50s/early 60s. Early retirement will require a much higher savings rate, so it's probably a good idea to be clear on what your financial goals are and if you can still achieve them on a lower pay trajectory.


ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: 26 years old; should I take a $40k pay cut?
« Reply #10 on: August 15, 2015, 08:44:00 PM »
I'm glad you asked them to switch weekends. I'm surprised they wouldn't work with you. Does your employer have competitors? Have you looked there?

I am also 26 and in the private sector. I make $90k for nearly always 40 hour weeks, so it's not like government is the only option for good hours culturally. Maybe no other employer in your industry would be flexible either, but that seems unlikely.

mozar

  • Magnum Stache
  • ******
  • Posts: 3006
Re: 26 years old; should I take a $40k pay cut?
« Reply #11 on: August 15, 2015, 08:48:08 PM »
Lol, the fact that I work at ALL is what I consider hustling. I worked a job with overtime for two years and that was enough. I work in accounting advisory and I will never go back to the long hours of audit. I make 75k. My audit peers are certainly making over 100k now, but I can't work those hours. I hate my job anyway, but whatever. I'm just going to hang out as long as I can. If I tried to do anymore I would completely burn out.
I bet you have more options than you think, but if nothing else, try to get as much as you can from the fed job. But the federal govt is not all roses. I couldn't deal with the bureaucracy and wheel spinning, and angry people who are just waiting until retirement. Oh wait that's me :-)

tempesttenor

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: 26 years old; should I take a $40k pay cut?
« Reply #12 on: August 15, 2015, 08:57:20 PM »
I think you should take the new job.

1) 75k salary is still pretty darn decent (but it's actually even higher because of the student loan payback)
2) If I understand you correctly, the new job has growth (read: pay raise) opportunities whereas the current one does not
3) The new job sounds like it's in your desired ideal field. It could be the springboard for higher paying jobs of a similar nature in the future
4) The new job will reduce your commute time, which softens the decrease to your hourly wage
5) The current job makes you unhappy. You believe the new job will likely make you happy. What value do you put on your happiness?
6) The current job hampers your life/family plans while the new one would enable them.
7) The current job (probably?) strains your relationship

This new job sounds like a golden opportunity to kill many birds with one stone. Go for it man!

FIRE Artist

  • Pencil Stache
  • ****
  • Posts: 590
  • Location: YEG
Re: 26 years old; should I take a $40k pay cut?
« Reply #13 on: August 15, 2015, 09:04:03 PM »
Sounds like most people are telling you to make the switch, but I would recommend grinding it out. Your 20's are for hustling and getting ahead. Keep working hard to pay off your debt and make the switch once you do.

This.  I switched from private to public sector, but I did it at 40 as a career wind down to fire.  There are junior staff in my department, and I think career wise it is disastrous for them. Public sector often causes people to lose their drive, it would be near impossible to go to the private sector after a long stint in public sector.  I know I couldn't now and I have only been at it for 1.5 years. 

BrickByBrick

  • Stubble
  • **
  • Posts: 120
Re: 26 years old; should I take a $40k pay cut?
« Reply #14 on: August 16, 2015, 05:05:46 AM »
If they did change the weekend rotation would they be able to keep you?  Honestly?  If yes, but you're willing to take the new job, then it certainly wouldn't hurt to ask them one more time for the weekend rotation change - and it probably wouldn't hurt to be honest with them that this has become a deal breaker.  If they still say no, hand them your resignation.  If they say yes, try to enjoy the higher income to pay off your student loan debt...after its paid off go get a new job.

ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: 26 years old; should I take a $40k pay cut?
« Reply #15 on: August 16, 2015, 05:16:06 AM »
If they truly can't change the weekend rotation, do they just crap themselves when somebody quits or is sick? Or is it something you work out among your co-workers and nobody is willing to switch with you?

Civex

  • Stubble
  • **
  • Posts: 167
Re: 26 years old; should I take a $40k pay cut?
« Reply #16 on: August 16, 2015, 09:33:37 AM »
Wow! First of all thanks for all the responses and feedback, there has been way more than I expected.

As you can see, I am very torn myself, and am also torn on what sort of advice to give you. When I first read your post my immediate thought was you should gut it out for a couple more years, build up a stash of almost FI, then spend a 3 or so years in the government before you ER for good at 35 or some awesomely young number. But not being able to even spend weekends with my girlfriend would get to me, so I see where you're coming from. So in conclusion, I have no idea what to tell you and I'm sure this post was no help.

I completely understand your dilemma. My original plan had been to stay with my current employer until roughly 30 (5 years) and then look for a position with a better work/life balance.,, but with the schedule and during our busy season, I just completely dread going into work, and feel burnt out on my days off.

I'm glad you asked them to switch weekends. I'm surprised they wouldn't work with you. Does your employer have competitors? Have you looked there?

I am also 26 and in the private sector. I make $90k for nearly always 40 hour weeks, so it's not like government is the only option for good hours culturally. Maybe no other employer in your industry would be flexible either, but that seems unlikely.

It isn't so much that the company won't work with me, it is that my direct supervisor ( the one who's weekend rotation would change) is completely against it. The boss up the ladder has approached me twice in the last 6 months if I would be interested in taking a management position, but each one would require a move. I have looked for other options, but I live in a rural area (read amazingly LCOL [HHI average of $35k/year]) and openings and turnover happen slowly. I was approached by a direct competitor about a month ago, but the position would still require some commuting, and I'm worried that it would be too similar to my current employer and in a year I would end up looking for a new job with job hopping on my resume. This may be in my head, but there are likely a few other good opportunities in my area, but it seems like that they fall into, "who you know" rather than what you know to get them, and working in another town I have not made many connections where I reside/I'm kind of an unknown.

Sounds like most people are telling you to make the switch, but I would recommend grinding it out. Your 20's are for hustling and getting ahead. Keep working hard to pay off your debt and make the switch once you do.

This.  I switched from private to public sector, but I did it at 40 as a career wind down to fire.  There are junior staff in my department, and I think career wise it is disastrous for them. Public sector often causes people to lose their drive, it would be near impossible to go to the private sector after a long stint in public sector. I know I couldn't now and I have only been at it for 1.5 years.

Could you elaborate a bit on the bolded section, please? I thought it would be advantageous; I would be eligible for a pension at 46-47.

If they did change the weekend rotation would they be able to keep you?  Honestly?  If yes, but you're willing to take the new job, then it certainly wouldn't hurt to ask them one more time for the weekend rotation change - and it probably wouldn't hurt to be honest with them that this has become a deal breaker.  If they still say no, hand them your resignation.  If they say yes, try to enjoy the higher income to pay off your student loan debt...after its paid off go get a new job.

I had decided to stick it out for another year at least, until I found out that my schedule would not be able to be changed. I then had a sit down meeting with my boss's boss, and detailed all the reasons that the schedule should be changed. He (says he does) agrees with me, but won't force the issue. I understand his position; it'd be better to have me leave/be frustrated than then my supervisor with 15 years experience, who will stay in the position for life be unhappy or quit. I told him at the end of this meeting that if my supervisor is unwilling to work out a compromise, that they can work it out with next person in my position.---Maybe not the most tactful, but I was angry. I told him I would touch base with him this coming Tuesday and see if anything has changed.

If they truly can't change the weekend rotation, do they just crap themselves when somebody quits or is sick? Or is it something you work out among your co-workers and nobody is willing to switch with you?

Usually, they find someone who is broke/is the type of person who won't say, "no" and have them work for the person. Last time a true emergency occurred and my supervisor couldn't come in to work, it took 2 hours for the replacement person to arrive and all hell was breaking loose. I can't switch with my coworkers due to the nature of my job; they aren't qualified, so the only person who can switch with me is my direct supervisor.

skunkfunk

  • Handlebar Stache
  • *****
  • Posts: 1057
  • Age: 33
  • Location: Oklahoma City
Re: 26 years old; should I take a $40k pay cut?
« Reply #17 on: August 16, 2015, 10:17:50 AM »
It's a high COL area? It's possible you can lower expenses further once you aren't miserable half the year. This is a no brainer, take the new job and enjoy.

TonyPlush

  • 5 O'Clock Shadow
  • *
  • Posts: 74
  • Age: 29
  • Location: Denver
Re: 26 years old; should I take a $40k pay cut?
« Reply #18 on: August 16, 2015, 11:14:32 AM »
Sounds like most people are telling you to make the switch, but I would recommend grinding it out. Your 20's are for hustling and getting ahead. Keep working hard to pay off your debt and make the switch once you do.

This.  I switched from private to public sector, but I did it at 40 as a career wind down to fire.  There are junior staff in my department, and I think career wise it is disastrous for them. Public sector often causes people to lose their drive, it would be near impossible to go to the private sector after a long stint in public sector.  I know I couldn't now and I have only been at it for 1.5 years.
This is very true, and this is me. Nearly all my drive has been sapped from me due to the government work, and I see it in the other young guys who were hired on with me and haven't left yet.

It's hard to explain. It is something about the ultimate comfort in knowing that you will always have a cush job that will take care of you until you decide to retire, while never asking much work from you. And the thought of leaving to go private sector and having to work harder feels insurmountable. You just get so used to never working very hard, getting Fridays off, etc. that you start to think, "Why bother with anything else?" despite working a job that is boring and unfulfilling.

fb132

  • Guest
Re: 26 years old; should I take a $40k pay cut?
« Reply #19 on: August 16, 2015, 11:16:51 AM »
I would make the move if it meant being happier and 70K$ is still a good salary unless you have high expenses, I make half of that, so my choice would be a no brainer...but it's up to you.

Villanelle

  • Magnum Stache
  • ******
  • Posts: 2958
Re: 26 years old; should I take a $40k pay cut?
« Reply #20 on: August 16, 2015, 11:29:11 AM »
Well I'd certainly apply and see what could be done about that salary, at the very least.  Just how much of a cut I'd be willing to take if hard to quantify without knowing how just how unhappy the current job had me.  But applying and seeing if you can push them closer to that six figure number certain can't hurt. 

Civex

  • Stubble
  • **
  • Posts: 167
Re: 26 years old; should I take a $40k pay cut? **1 year update**
« Reply #21 on: August 13, 2016, 09:11:56 AM »
Just wanted to say thanks for everyone who gave me advice, and give some followup.

I ended up interviewing for the government position nearly 9 months after this post- didn't get it, and was pretty disappointed. It turned out to be a bit of a blessing, though; because about 2 moths later I applied for a different position (different company) and was made a great offer.

My new job is in a more specialized subset of my field and they brought me on with the expectation that I would work very hard to quickly bring myself up to speed. My manager is a great guy, and I work in a very small, growing department. On the financial side; I received a small pay raise, but slightly reduced hours--ends up being a wash, but I no longer work weekends and my stress level is almost nonexistent. With a better work culture, reduced stress, and education/growth opportunities I am feeling super fortunate.


ShoulderThingThatGoesUp

  • Magnum Stache
  • ******
  • Posts: 3057
  • Location: Emmaus, PA
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #22 on: August 13, 2016, 10:03:50 AM »
Very glad you got it worked out.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 5622
  • Age: 1
  • Location: Earth
  • K Thnx Bye
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #23 on: August 13, 2016, 11:28:15 AM »
Great update, that's fantastic.

tempesttenor

  • 5 O'Clock Shadow
  • *
  • Posts: 17
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #24 on: August 15, 2016, 10:50:22 AM »
Whoo! Glad to hear it!

Playing with Fire UK

  • Magnum Stache
  • ******
  • Posts: 2603
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #25 on: August 15, 2016, 11:51:21 AM »
Thanks for coming back with the update!!

lukebuz

  • Stubble
  • **
  • Posts: 189
  • Location: Bowling Green, KY
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #26 on: August 15, 2016, 12:15:27 PM »
Low stress and $150,000 a year?  Shit boy, what do you do, anyways?

zolotiyeruki

  • Magnum Stache
  • ******
  • Posts: 3265
  • Location: State: Denial
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #27 on: August 16, 2016, 08:57:40 AM »
This is really late to the party, but a pay cut from $120k to $80k doesn't mean you're losing $40k/year.  Federal taxes alone would be 28% (income) + 7.5% (FICA), plus whatever state income tax you might pay.

Anyway, congrats on the new job!  I wonder what your old employer will do on the weekends where you were on duty...

mm1970

  • Walrus Stache
  • *******
  • Posts: 6869
Re: 26 years old; should I take a $40k pay cut? *1 year update*
« Reply #28 on: August 16, 2016, 10:51:39 AM »
Thanks for the update!  I'm glad it worked out.