Hi Everyone
I've posted before looking for budgeting tips. And have made good progress since then.
Awesome new situation - my husband was laid off.
He was previously making 90-106k as a software engineer (90 base and then bonus - last year it was 106). He'd now like to build up his side business as a web developer/software specialist (he's been doing this since 2000) and not return to a good income software job. He has regular clients that have sought him out through word of mouth and prior to lay off a local marketing specialist contacted him looking to partner on his business. She would find him clients and manage client needs and he will do the web work. For what she'd be doing she isn't taking a large percentage of web design money either. She's already found him at least two new clients in a month.
I am supportive of this because the lay off was a blessing in disguise as he was really unhappy with how the company was not investing in quality products. Even in the two weeks since lay off, I've noticed an improvement - he's happier and he's been doing more creative projects. I am very happy about this because my husband has always been a creative type - excellent illustrator, musician etc., but I felt that his last job was sapping his energy and he wasn't using his talents.
All this to say, my income (65,000) can cover our basic expenses, but we will probably still be at least 20-30k in debt after his severance payout....
So I am torn between him taking a risk on a new adventure and the lessened possibility for fast debt repayment if he does.
I think the right thing to do is support him in having a happier life, but I am also worried about the finances. I am much more debt averse than he is.
Some general numbers
Mortgage (255,000 - home is estimated at 400-450k)
Husband's RRSPs (100k)
My RRSPs (2500) - I also will have a DB pension with fed. govt if I stay the required amount.
car is paid off and worth about 10k
debt - 20k student loan (mine- down from 42k in 2010) - I could still afford the $500 monthly payment, but couldn't increase it.
LOC - 40 k - this was his down payment on the house and associated house expenses before I met him. His severance will pay off 20-30k of it.
All of our basic expenses I can cover on my income - we don't live the high life. The one problem would be my daughter's daycare expenses. At $1000, I can't cover that myself, and if husband goes this route, I would want to cut this cost in half by having her go to mornings only (565 per month) with him taking care of her from noon to 4 when I get home (she would sleep two of those hours anyway)...
So - Are we being crazy in trying something new at this point, or should hubby return to a regular job until debts are paid and then try to build his company?