Author Topic: Case Study: Stick with the Family or Strike Out?  (Read 6206 times)

mining_melancholy

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Case Study: Stick with the Family or Strike Out?
« on: November 02, 2014, 07:50:56 AM »
Context: I live with my family in a very rural, very poor town. I work in public service and am the head administrator of my department. After taxes and expenses, I have $15,733.42 a year I can save. Recently, a job opening has opened in a slightly larger but still quite rural town nearby. The job is a less prestigious position (I would be manager, not administrator), but the pay will be from $44k to $48k (before taxes). Going off my estimated expenses (which were pulled from national averages in some cases and, therefore, have room for trimming), if I were to start at the $48k level, I would be able to save $15,772.89 a year, $39.74 more, and begin to pay for a house on a ten year loan (see breakdown below for the "ifs" about that).

However, I don't know if this is the more badass choice. I graduated from grad school in 2013 and have only been in my current job six months. I originally planned to work here for three to five years then start submitting again, but living with the family can be frustrating, especially since they want to pool our funds, preventing any of what I earn to go into more than a Roth IRA. I want a job in a more engaging location at the 60-80k level. However, given the problems of long distance job applications and the lack of networking options, I don't know if its worth trying to hold out for such a position while my money does nothing.

Of course, living with the family gives me a LOT of free time to job hunt as well as limited expenses and a guaranteed safety net in emergencies.

Long story short: I could move and, if things go perfectly, start investing and owning a house but it would be in a town and job that are much less than what I want, or I could stay, stuffing my money under the mattress, taking the gamble of getting the position that I really want.

Now, them numbers!

Current Income: $$17,064.96 after taxes, all from my administrator job.
I also have an online tutoring job that I would probably give up if I took the new job; however, it is very new and I still have no students, so its income is irregular and currently not known (I'll make 15/hour but don't know how many students I'll have).

Current Expenses (Yearly)
  • Car - $175.38 (This includes gas to drive to work, doctors visits, and maintenance)
  • Haircuts - $30 (Yeah, I know, this is a free facepunch. I get them done professionally because my family does not believe in doing it yourself and I'm a wimp. I am trying to reign this in.)
  • Health - $240 (This includes doctor's visits and medicine)
  • Insurance - $785.16  (Car: $660, Life:$125.16)
  • Misc- $101 (This includes car tag [26] and membership to my field's national organization [75])
  • Total - $1,331.54

Currently Saving:$15,733.42 per year.
$5500 goes in an IRA. The rest, as I said, is in the bank.

Expected Income: $48,000 before taxes. Estimated to be $32,670.04 after taxes.
This is the best case scenario. The position is $44-$48,000. However, if the offer is too low, I'll turn it down.

Expected Expenses (Yearly):
  • Car - $175.38 (I hope to bike to work but the town I want to move to is tricky. It's roughly three miles from the epicenter to any major area, but real estate within the city itself is limited. So what my biking situation will be is unknown. For that reason, I'm leaving car unchanged.)
  • Clothing $1,000 (A national average. One I'm sure I can beat.)
  • Fees - $101 (Won't change)
  • Food $3,780 (A national average. Could likely be trimmed.)
  • Health - $240 (Won't change.)
  • Housekeeping - $360 (A national average. I already own a lot of the needed tools for cleaning, so I doubt this will be hard to beat.)
  • Insurance - $785.16  (Not sure how this will change, so I'm leaving it the same for now.)
  • Misc $1,392 (A national average and added as a buffer for anything I may have overlooked.)
  • Personal care - $408 (A national average. Yeah, I'm sure I can beat this.)
  • Utilities $1,290 (A local estimate. Can probably beat this one.)
  • Total - $9,531.54

Mortgage (expected): $9,909.48 per year.
This is based on a scenario from my other post: an 80k house with a 70k loan at 5% interest over 10 years. 80k is reachable in this area. I'd prefer a 40k house but I don't know how easy it would be to find one that low, let alone in an area I'd want to live in.

Expected Savings (counting both expenses and mortgage): $15,772.89 per year.


Whew! There it is. So, what do you think? Which is the more badass option? And like I said, not all of the factors are in the numbers. After all, I'm still wanting a better job and, even if I score this one, I'll keep applying for those better positions without missing a beat. But given the current job market and my long distance and lack of networking options, I don't know what my odds of finding a good job somewhere nice within five or so years is. So maybe it's worth the risk. Anyway, I'd love to hear your thoughts!

Villanelle

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #1 on: November 02, 2014, 08:12:14 AM »
The new job would make 2.5 times what you make at the current one.  Even with a less prestigious title, that is surely going to help you more in moving up to bigger and better jobs over time, since so very often your current salary is what an employer tries to use when making an offer for a new job.

So I'd take the new job.  However, I wouldn't buy a home there unless it was a place I wanted to be longer term (and it sounds like you don't) or it was something I could rent out for at least a break-even in 2-3 years as an absentee landlord, which is about how long you'll probably need to say in the job before moving up again, to something even better and closer to your goals). 

Also, it sounds like getting away from family would be very healthy for you.  If you are letting your dad dictate the terms of your hair cuts, cuts he's not paying for, then cutting the cord seems like a healthy and even necessary thing.

Terrestrial

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #2 on: November 02, 2014, 08:13:10 AM »
If I'm reading correctly, your expected real savings is virtually identical, around 15k a year.  Your numbers are very detailed but in practical terms since most are based on averages, there is no way to know....if anything your risk of variable and unexpected expenses are higher living on your own and owning a home than living with your family and $40/year is a negligible number anyway even if they worked out as you expect to the penny.

I'd make my decision on which job sets you up the best for your long term future.  If the new job and town that you are considering were what you wanted long term I would say sure, do it...but they're not.  I wouldn't purchase rural/poor town real estate at this point in your life because it can be hard to unload again and probably isn't going to appreciate much anyway.  As it's not really going to make you any meaningful money in the short term, don't tie yourself down to something that can act as an anchor if you find the job you really do want in a better location a year or two from now.  If the numbers work out that it would be a profitable rental if you were to leave it that may change my view, but probably not.  You're young, flexibility to pursue your dreams and a higher income in a better location is worth more than owning a house as soon as possible.

Perhaps consider a third option...take the higher paying job if being with your family is really getting too frustrating, and rent a room from someone in the new town for as cheaply as possible.  You will probably end up saving way more than if you bought, and not limit your flexibility for the future.  Only do this if you think that job sets your resume up better though...keep your eyes on the long term prize and keep firing out applications, something will hit.

Jags4186

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #3 on: November 02, 2014, 09:31:54 AM »
Not sure how old you are or how close you are with your family but I think it's very important to "be on your own".  Sometimes not every decision is financial. I lived my parents for a year after graduating college and while it was great and I have a great relationship with them, leaving and going out on my own was the best thing to ever happen to me. I still have a great relationship with them but could never imagine going back.

Best of luck!

trishume

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #4 on: November 02, 2014, 10:00:01 AM »
Side note unrelated to the original question:

It seems odd to me that you are paying for life insurance when you are young (you said you just came out of grad school) and with no dependents (I assume).
You may have some special reason that I don't know about but life insurance doesn't seem like it would be a good deal for you.

GizmoTX

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #5 on: November 02, 2014, 10:06:09 AM »
Generally speaking, a person in the career building stage should not be "investing" by purchasing a house. Get over the idea that you are throwing your money away renting. A very small portion of your house payment goes for principal, & there will be expenses you have no idea will be needed, not to mention property taxes. The time you don't have to spend on cutting the lawn, etc. can be spent on other worthwhile activities: a side business, learning about investing, just having active fun in ways that will be much more difficult later with a family. Rent a small apartment & there's much less space to fill with stuff. We even rented furniture when just starting out, & took our time replacing rentals with finds or pieces we made. There's also much less to move or toss when you decide to relocate, & you won't be underwater with a house. Choose a house when you have your dream job, love the area, & want the lifestyle.

I also agree on getting out on your own ASAP. We married right out of university & moved several states away (for great jobs & climate) -- this really forced us to rely on ourselves & showed our families we could succeed on our own. You don't have to move so far away but you should have the option to, & you & your family may appreciate each other more during visits. Two of my sibs have moved to our area because it beats where we were from.

Catbert

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #6 on: November 02, 2014, 02:37:20 PM »
I would take the job. 

It sounds like you there are no promotional opportunities in your current job since you are already the "administrator".

I think that it's odd that your finances are so entwined with the rest of your family's.  Your family wants to pool money thereby preventing you from getting a Roth (!?!).  And you can't cut your own hair because your family doesn't "believe" in it. 

As other's have said don't be in a rush to buy a house until you know you'll stay somewhere for the long haul.

 

MidWestLove

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #7 on: November 02, 2014, 03:15:42 PM »
I would have taken the job, good career move, greater independence from family and path forward. you also do not write how far is "nearby" - do you have to move right away when new job starts?

I would have also stayed away buying a house until it was certain that
a) I know and like the town in general and want to stay longer term (career, friends, environment, culture)
b) I know where exactly I want to stay.

until that time, rent and learn new place. you would save a lot more than you think and not as committed to the new town, new job, or particular neighborhood.

waltworks

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #8 on: November 02, 2014, 03:59:43 PM »
$17k after tax?!? What? Are you seriously saying that your "administrator" job (with a graduate degree) pays only a little over minimum wage? What do they pay the normal employees?!?

I'm confused by a lot of things here (reporting your savings down to the cent?) but:
-Don't buy a house.
-Get the F out of your current situation unless you want to stay in it forever.
-Move. Anywhere. You can manage a McDonalds and triple or quadruple your salary in any number of cities all over the US. Visit your family on holidays.

-W


mm1970

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #9 on: November 02, 2014, 04:51:28 PM »
So, it sounds like you don't have the job, you are considering applying for the job?

Anyway, by all means apply.  It's never bad to get experience interviewing.

If it's a big raise (I can't really tell?) - you'll almost assuredly NEVER get that WITHOUT jumping.

ambimammular

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #10 on: November 03, 2014, 06:38:55 AM »
Sounds like it's time to cut the umbilical cord and venture out. This is a good time to stop the entitlement your family feels toward you income. Some distance will do you all good and make it easier for you to disregard their not-so-informed ideas about saving. 

It will give you a chance to test yourself against the national average and see just how mustachian you are.  Good luck!

Bikeguy

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #11 on: November 03, 2014, 08:34:17 AM »
Take the higher paying job.   Future jobs will base their offers on current salary.   If you don't switch jobs every two years,  you are losing money

mining_melancholy

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #12 on: November 03, 2014, 10:01:36 AM »
Thanks for the replies everyone! I decided nothing to it but to give it a shot, so I called the library this morning.

Things turned out a little better than I expected but I'm not sure how much better. The director informed me that the position is actually one that the library board wants to fill with someone who plans to stay and take over as director when the predecessor retires. In other words, they want someone long term.

I don't know how I feel about that. It's good because, hey, room for advancement. But it'd mean buckling down for a good long while if things went according to plan.

Still, I plan to throw my application into the ring and see what comes of it. If I don't get an offer or a reasonable salary offer, then it's no go anyway. And if I do get a good offer, the position would certainly be exciting, even if the location is not the best. We'll see.

I'll keep you informed!

Fodder

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #13 on: November 03, 2014, 10:16:41 AM »
Good luck!

And I also want to echo the person who asked why you have life insurance.....if you have no dependents and no debts....I don't see why you would spend money on life insurance.  Is there some sort of disability or terminal illness clause?  It's definitely something to consider if you are married and have a spouse who depends on you, or once you have a child, but otherwise, you don't really need it.

Goldielocks

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #14 on: November 03, 2014, 10:46:46 AM »
At your work experience level, definitely consider your current job as and entry point to a larger, better job for future.   

With that in mind, is the new job that "better" one you are building towards, that you would be happy with for 10 years (or leading to something even better in 5 years?)  If you take the new job, plan for now to stick to it for 5 years.

OR
 
If you stick with your current job and "administrator" title, will one more year of experience make the difference, and allow you to apply for "Administrator" level jobs for $55k to $65k somewhere else?

Only you can tell, but as the others said, money is only part of the equation, and there is nothing as empowering as knowing you are able to wholly support yourself, away from the family nest.


mining_melancholy

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #15 on: November 03, 2014, 11:19:32 AM »
To the question on the insurance policy:

I don't plan to keep it. It just hasn't been switched over to me yet. My family is still paying for it and we keep putting off the switch out of forgetfulness. Once it's switched, I'll cut it off.

As for whether my admin position would be worth more in a year... honestly, I don't think so. It's hard to say because everyone in my field has a different idea of what looks important on a resume. Pay scale, library pretige, individual duties and experience, education, years of service, networking. Librarians are the worst people when it comes to being organized about this sort of stuff (amazing, right?).

But, given that there's a chance of ending up in an admin position in this new job, it looks like I can get from it almost everything I can from this one (the main downsides being "Manager" rather than "Director" in the title at the start and I don't think I'll be doing as much budgetting, which I hate to lose).

rocklebock

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #16 on: November 03, 2014, 01:13:47 PM »
Library manager here (department head in academic library). There are a few others around here, too. As you probably know, one of the annoying things about library careers is that search committees really want to see an orderly, progressively-responsible, upwardly-mobile career path on your CV - anything else tends to raise eyebrows. So I get your concern about moving from "Administrator" back down to "Manager".

That said, to me it seems more important to get out of your current living situation so you can move on independently. Some thoughts - If the director is talking openly about retirement, that probably means that there's a date for this on the table, or at least a general timeframe. You could try to find out what that is, just to put things in perspective. Assuming you get the job and take it, you can talk with the director about taking on some of her budgeting responsibilities and other administrative work - most people hate this stuff, so she/he might be happy to offload it to you, and maybe you can even negotiate a title change like "Deputy Director." Finally, even if you end job-hunting again with the "Manager" title, I think you could spin it in your cover letters to say it was actually a step up to move from  Administrator at Lesser Podunk County Library to Manager at Greater Podunk County Library.

Oh, and don't buy a house!

mining_melancholy

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Re: Case Study: Stick with the Family or Strike Out?
« Reply #17 on: November 04, 2014, 11:02:00 AM »
rocklebock

Thanks for the advice! I'm waiting to see what the offer is from the Greater Podunk Library. I also have feelers out in a few places (Boulder, North Carolina, etc) that I'm hoping to hear back from first so I can lay the cards on the table.

The hardest part in all this is the fact that, with a library career, I can't just pick up and move. Like you said, that progressive build is me to these committees, so it's not like I can just hop to Austin, Texas and take an entry level job without setting my career back significantly. But that's just another challenge! And if I ever do get an interview five or ten years from now, I can spin into a hell of a presenation.