Author Topic: Case Study: Is This a Smart Long-Term Change?  (Read 7094 times)

Rekon

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Case Study: Is This a Smart Long-Term Change?
« on: April 06, 2015, 10:32:02 PM »
Here are my financials:

Income:

Wife (PI Paralegal) = $35,360/yr

Myself (Operations Manager) = $60,000/yr 

Sub Total (gross) $5,000 + $2,696 = $7,696/mo

Current expenses:

•   Rent $1,500 (2 bedroom apartment in Los Angeles County) my wife and I work in opposite directions but this apartment is 10 miles away from each job and I ride my bike.
•   Gasoline $150-$200
•   Internet $40
•   2 Cell Phones $90
•   Pharmacy $50 – Allergy & Asthma meds for me
•   Utilities $60
•   Auto Payment $380
•   Auto Insurance $100
•   Groceries $400
•   Restaurants $200 (this varies but $200 is the max)

Sub Total =$3,020/mo

Savings:

$11,000 - We are able to save $2,500/mo

Assets:

•   401k:  $32,000 account value;  6% + 3% company match = 9%/mo
•   Company Sharematch: $4100 account value; $250/mo*

    *$3k is the annual max for my company sharematch plan.  I contribute $250 a month.  It’s a 2 for 1 share deal.  However, there is a 3 year hold minimum (from the day you bought the shares) to get free shares.  Company is large, financially sound, and stable.   

•   780/750 Credit Scores - I consider this an asset :)

Liabilities:
 
•   No credit card or student loan debt :) 


I am 27, my wife is 25…

The issue is my wife hates her job.  She does pre-litigation for a law firm in Sherman Oaks.  She manages well over 100 files by herself.  Her employer's expectations are unreasonable and the amount of work she does doesn't make sense with her compensation.  Moreover, she stresses out everyday and I can see it impacting her health and so does the dr. 

Anyways, we were toying with the idea of her quitting her job and going back to school to get an Associate of Science Degree specializing in MRI.  According to Salary.com, MRI tech's make a median salary of $70,600 in CA.

There is a local 2-year program at a school called Casa Loma College (accredited by ARRT, ARMRIT, & ABHES) This program with tuition+books cost $35,250

My questions are:

#1 Can we afford to live on my salary?
#2 Is this a smart long-term change? 

Thoughts?
« Last Edit: April 07, 2015, 08:06:50 PM by Rekon »

Cwadda

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #1 on: April 06, 2015, 10:38:59 PM »
I think you could work on getting groceries + restaurants down to $400/month combined. Also, what's the deal with that auto payment? What are the details on the car? All of the other expenses look pretty good.

After making a few more savings I think it'd be fine to make that long-term decision. Just make sure that's something your wife likes and wants to do. Can she work part time and handle the program at the same time (night classes)?

horsepoor

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #2 on: April 06, 2015, 10:40:12 PM »
I don't see why it's not feasible.  A couple questions though:  You list net income as $7,696 and expenses as $3,020, but say you're able to save $2,500/month.  Where is the other $2176 going?  Is it random spending that can feasibly be zeroed out while your wife is in school?  If you're really spending $5196 (3020+2176) per month, and your sole income is $5K, that puts you in the hold a bit each month, before tuition and any additional school costs are factored in (more commuting to campus?). 

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #3 on: April 06, 2015, 10:45:45 PM »
I don't see why it's not feasible.  A couple questions though:  You list net income as $7,696 and expenses as $3,020, but say you're able to save $2,500/month.  Where is the other $2176 going?  Is it random spending that can feasibly be zeroed out while your wife is in school?  If you're really spending $5196 (3020+2176) per month, and your sole income is $5K, that puts you in the hold a bit each month, before tuition and any additional school costs are factored in (more commuting to campus?).

$7,696 is net (pre-taxed).  We make $5,600 after taxes.
« Last Edit: April 06, 2015, 10:49:06 PM by Rekon »

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #4 on: April 06, 2015, 10:46:51 PM »
I think you could work on getting groceries + restaurants down to $400/month combined. Also, what's the deal with that auto payment? What are the details on the car? All of the other expenses look pretty good.

After making a few more savings I think it'd be fine to make that long-term decision. Just make sure that's something your wife likes and wants to do. Can she work part time and handle the program at the same time (night classes)?

Yes, she mentioned she wants to work part-time (starbucks or something similar).  The classes are flexible.

And yes, we would not go to restaurants.  Groceries would be $400.  Car payment is a 2013 Corolla at 0% APR - 3 years left.
« Last Edit: April 06, 2015, 10:48:35 PM by Rekon »

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #5 on: April 06, 2015, 10:50:27 PM »
Also, I forgot to mention.  We would have to get a student loan for $35,250 school expense.

horsepoor

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #6 on: April 06, 2015, 11:00:18 PM »
I don't see why it's not feasible.  A couple questions though:  You list net income as $7,696 and expenses as $3,020, but say you're able to save $2,500/month.  Where is the other $2176 going?  Is it random spending that can feasibly be zeroed out while your wife is in school?  If you're really spending $5196 (3020+2176) per month, and your sole income is $5K, that puts you in the hold a bit each month, before tuition and any additional school costs are factored in (more commuting to campus?).

$7,696 is net (pre-taxed).  We make $5,600 after taxes.

That is gross.  Net is after taxes.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #7 on: April 06, 2015, 11:11:09 PM »
Duh.  Sorry, it's late.

Spondulix

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #8 on: April 06, 2015, 11:29:21 PM »
I just looked at the curriculum, and I'd find out how many of those 12 general classes you can knock out at a community college. LAVC (in Van Nuys) is $45/credit hour, where as this program is more like $300/credit hour!

Are there any scholarship options?

Argyle

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #9 on: April 06, 2015, 11:33:49 PM »
Has she talked to MRI techs and gotten the low-down on where it's good to get training?  It's very important to do due diligence before committing this much money, because there are a lot of rip-off programs out there.

Another question is: what are the other options for being a paralegal?  The paralegals I've known make a lot more money than your wife is making?  Are there lower-stress paralegal jobs she could get?  (There must be some; I've known longtime paralegals who aren't stressed out unduly.)  Rather than changing careers, expensively, could your wife find a better paralegal job?  Can she do some informational interviews with longtime paralegals in other firms to get a better sense of her options?

In general it's better to go into a profession where they pay you while you learn on the job.  With success as a paralegal, I'd think your wife has a lot of options in careers that demand a lot of attention to detail and accuracy.  There are a lot of careers out there that don't require an expensive degree to enter.  Some more research and looking around might serve her well.  People who are about 10-15 years older than your wife but with similar training — what are they doing and how did they get there?  That's what she needs to find out.
« Last Edit: April 06, 2015, 11:38:43 PM by Argyle »

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #10 on: April 07, 2015, 09:01:51 AM »
I would love to but we don't know any MRI techs.  I was hoping someone on this forum with similar experience would chime in.

frugaliknowit

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #11 on: April 07, 2015, 09:29:06 AM »
I see a big problem with your plan.

You and your wife are betting about $35K plus lost income that she will both be able to get a job and enjoy this new profession.  Worse, you are talking about borrowing the money.

Do one or a combination of the following:
1.  Find someone (like an employer) to sponsor your wife's education.
2.  Take whatever courses in a community college (part time) that can lead to some type of job in the field before spending/borrowing your hard earned cash on this.
3.  While researching all of this, your wife should try a different employer in her field.  Maybe her frustration is mostly bad management.
« Last Edit: April 07, 2015, 09:33:04 AM by frugaliknowit »

mlejw6

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #12 on: April 07, 2015, 10:03:12 AM »
Why doesn't your wife look for another paralegal job? Just because that particular job is bad doesn't mean all paralegal jobs are bad. As another poster mentioned, there must be good paralegal jobs around your area. Has she sent out her resume to other firms?

If it is the specific duties of being a paralegal that she doesn't like, there may be other jobs that will accept her qualifications that don't require a whole new degree. For instance: teaching. Does she work for a defense attorney or prosecutor? Maybe switching sides would give her career more meaning?

I would not take out expensive loans on a program without knowing where it will take you. Just because the job pays well doesn't mean she will get a job paying that much right after she graduates.

These are my thoughts. I wish you luck in your decision!

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #13 on: April 07, 2015, 04:17:11 PM »
Thanks!  She sent her resume to a few PI law firms last night and is going to send it to more places tonight.  For some reason the cap for PI paralegals seems to be $25/hr.  I haven't seen any job opportunities that pay higher in this area.  That's why I was thinking if she goes back to school for nursing or MRI it would be better financially in the long-term.

mustachianteacher

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #14 on: April 07, 2015, 05:26:05 PM »
I'm not an MRI tech, but I do live in the valley as well (West Hills) and wanted to say hello!

In addition to what the others mentioned, I have two thoughts:

1. How do you feel about temporarily moving to a cheaper apartment so you can free up some extra cash? (Think Van Nuys or Reseda instead of Sherman Oaks. If you live close to the Orange Line, you could conceivably use either the bus system or the bike path that runs parallel to it to commute.) I really don't think you should borrow all $35K. If you reduce expenses as much as you can, I think you should be able to cash-flow at least some of it, and then you can borrow the rest.

2. If she's not stuck on the idea of being an MRI tech, what about the nursing program at Pierce? http://www.piercecollege.edu/departments/nursing/  Pierce is also right across the street from the Orange Line, and it's bound to be much more affordable. I have a friend who completed their program and was happy with it; she is now a nurse at Kaiser.


RexualChocolate

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #15 on: April 07, 2015, 05:35:35 PM »
35k a year for a paralegal is very low especially in LA. She needs to network and find a new job. 2 years experience opens an entire new world of opportunities.

I'm not a huge fan of going back to school unless you're insanely passionate about something. Does she have a 4 year degree now? If no, it'd make more sense to get one and grab a generic 50k/year job first while you figure out what you really want to do. As someone who recently got an MRI and some ankle scans, it doesn't look like that job is exactly thrilling.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #16 on: April 07, 2015, 05:43:20 PM »
35k a year for a paralegal is very low especially in LA. She needs to network and find a new job. 2 years experience opens an entire new world of opportunities.

I'm not a huge fan of going back to school unless you're insanely passionate about something. Does she have a 4 year degree now? If no, it'd make more sense to get one and grab a generic 50k/year job first while you figure out what you really want to do. As someone who recently got an MRI and some ankle scans, it doesn't look like that job is exactly thrilling.

Thanks.  No, she doesn't have a 4 year degree now.  Just some community college coursework.  What do you mean by a generic 50k/year job? 

Argyle

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #17 on: April 07, 2015, 05:49:35 PM »
Here are the statistics for paralegal salaries in California: http://www.bls.gov/oes/current/oes232011.htm.

At a mean salary of $24.92 per hour that's a mean annual wage of $51,840.  Of course "mean" means that many people are making more than that, in addition to the people making less than that.  But some specialties make as much as MRI techs, as it says on that webpage — it would probably help to do some fact-finding about how people get into those specialties.  Remember that if her MRI degree took one year and $35,000 in tuition, that's $70,000 (tuition + lost wages) you're down already before you start paying the interest on the loan.  A job change where she doesn't stop working puts that $70,000 in your pockets.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #18 on: April 07, 2015, 05:53:31 PM »
BTW I did more research for local community college programs.  Here are a few Associate Degrees available and all are accredited:

Veterinary Technology
Nursing (this is extremely hard to get into but still an option)
Child Development
Accounting

These are offered at half the price of the MRI program at the private college.

RexualChocolate

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #19 on: April 07, 2015, 05:55:17 PM »

Thanks.  No, she doesn't have a 4 year degree now.  Just some community college coursework.  What do you mean by a generic 50k/year job?

I'd finish that degree. That's what is depressing her wages- she can go to any other paralegal job and get more once she has a bachelors in something. I don't know what the local colleges are.

By 'generic job' I just mean any job with a few years experiences and a college degree. You don't need a specialty field to make that in LA with 2+ years working experience; anyone would be foolish not to hire her for that with her background once she has the bachelor's.


Either way, life is way too short to spend any more time at that job. I'd make a lateral move first then work on education. Getting past HR with no college degree is a hurdle these days so it may help to see who you know in other types of jobs, paralegal or no. A pay cut would be fine if it gets you out of those environments. Lawyers are (often) terrible people to work for.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #20 on: April 07, 2015, 08:06:28 PM »
Here are the statistics for paralegal salaries in California: http://www.bls.gov/oes/current/oes232011.htm.

At a mean salary of $24.92 per hour that's a mean annual wage of $51,840.  Of course "mean" means that many people are making more than that, in addition to the people making less than that.  But some specialties make as much as MRI techs, as it says on that webpage — it would probably help to do some fact-finding about how people get into those specialties.  Remember that if her MRI degree took one year and $35,000 in tuition, that's $70,000 (tuition + lost wages) you're down already before you start paying the interest on the loan.  A job change where she doesn't stop working puts that $70,000 in your pockets.

Thanks but PI paralegals don't usually make this much.   Again, i'm thinking long-term and it means taking a loss now to make more in the long-term i think it's a smart choice.  4-5 years seems to the break-even point.  After that, it's positive $$$.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #21 on: April 07, 2015, 08:10:08 PM »

Thanks.  No, she doesn't have a 4 year degree now.  Just some community college coursework.  What do you mean by a generic 50k/year job?

I'd finish that degree. That's what is depressing her wages- she can go to any other paralegal job and get more once she has a bachelors in something. I don't know what the local colleges are.

By 'generic job' I just mean any job with a few years experiences and a college degree. You don't need a specialty field to make that in LA with 2+ years working experience; anyone would be foolish not to hire her for that with her background once she has the bachelor's.


Either way, life is way too short to spend any more time at that job. I'd make a lateral move first then work on education. Getting past HR with no college degree is a hurdle these days so it may help to see who you know in other types of jobs, paralegal or no. A pay cut would be fine if it gets you out of those environments. Lawyers are (often) terrible people to work for.

I agree that life is too short to put up with poor management and lawyers are often terrible people to work for.  She is going to have stress at any job but they are insulting her daily and she comes home crying. 

Anyways, for now we're looking for another paralegal/legal assistant job or any generic job for that matter.   We're a little up-in-the-air whether she should go to a community college and get a generic degree, or go to vocational school and get a specialized AA then certification.

Rekon

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #22 on: April 14, 2015, 03:54:57 PM »
update: my wife quit her job last week and has been aggressively looking for a new job.

She went to a few interviews and already has 2 job offers so far.  Both jobs are in Beverly Hills (25 miles away from our home). 

Job 1:  pays $40k/yr, in business for 30+ years, PI Paralegal position, firm schedule (9am-5pm)

Job 2:  pays $50k/yr, in business for 16 years.  However, owner just retired and sons are taking over.  She would be a PI Paralegal Supervisor and managing 4 paralegals.   flexible schedule (anytime between 7am-6pm)

Obviously job #2 is the correct choice but she is not excited about the 25 mile drive.  Ideally, she is looking for something that is within 10 miles from home.

RexualChocolate

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Re: Case Study: Is This a Smart Long-Term Change?
« Reply #23 on: April 14, 2015, 08:40:54 PM »
Great work.

Employers use inertia to their advantage.

You will always be underpaid for the first 15 years of your career if you stay at the same one for over 5 years (depending on the profession of course).

I'd now look at part time schooling if she wants to transition away from paralegaling at some point. Make sure its a reasonable school, not a for profit outfit.