Hello,
I'll start by saying my current commute is 55 miles one way and typically takes 1 hour, my hair is and has been on fire about this for some time. I calculated that I spend an average of 20 days (480 hours) per year sitting in a giant hunk of metal hurtling myself down the interstate at 80 miles per hour to my destination. I even purchased a brand new car just to get me to and from work reliably! My head is hung in shame. Unfortunately I didn't stumble upon MMM until after my career choice and purchase of a new car. I do have one saving grace in terms of this commute, carpooling! I have a coworker that also foolishly decided to live far away from work, so we take turns driving every other day.
Also, some additional details:
1. I'm married and have dual income, we both make about the same amount.
2. We're located close to my wife's work <10 miles
3. Car is paid off already. No debt except for mortgage ($150k @ 4.25%, we're currently doubling payments)
4. We're trying to reach FI within 9 years.
Anyways, on to the question and some math. I have the opportunity for a job that is 30 miles closer to my home, a distance of 15 miles from home. The pay is equivalent to my current job at $70k/year. However, there are some notable benefits lost by switching to the new job. Did I mention I'm also going to grad. school?
My current employer will reimburse tuition 100%, the prospective employer reimburses 0%. Each class costs $5k, and I plan on taking 4 classes for the next two years. Essentially, my current job is giving me a $20k/year pay raise by means of paying for tuition. -$20k/yr for new job
Additionally, the new employer offers no 401k matching contributions, my current employer offers 6% match. -$4,200/yr for new job
So far the new job is $24.2k/year in the red.. Can shortening my commute get me out of the red? Based upon the IRS vehicle mileage rate of $.50/mile, driving 110 miles round trip to work 10 days per month (halved from 20 due to carpooling) it's costing me $550 per month or $6,600 per year to drive to work. Using the same math above, except now doubling the days I have to drive to work I get my new job costing me $300 per month or $3,600 per year to drive to the new job. So the new job would net me $3,000 in savings per year for the commute.
This doesn't factor in my time, which I hesitate to do - Time is certainly important to me, but I know I wouldn't get paid for the hours I commute regardless. If you do throw in the money due to time, the outcome does look more favorable to the new job. For my current job, calculating my hourly rate based upon my salary and the time of commute (2hr/day) and adding them to the above mileage costs: The results are $1,500 per month or $18,500 per year in costs. Whereas my prospective job would cost $750 per month or $9000 per year using the same method. This is a $9500 savings over my current job.
It doesn't look good for this new job unless they offer some additional incentives. It's just frustrating as I've been trying to get closer to home for quite a while and finally have an offer on the table. Unless there's another way of looking at it, it looks as though I would be sacrificing close to $9,500 per year for this new job. That is to say, until my schooling is finished which should be less than 2 years.
Any thoughts, opinions, advice?
Thanks!
Mustache In Training
