Author Topic: Pay Cut?  (Read 2008 times)

RidetheRain

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Pay Cut?
« on: March 22, 2018, 11:44:42 AM »
Hi, I'm considering an in-company transfer to a new city and I need advice on the pay cut. I've put the high-level info about my current spot and the new spot.

Me
26 yo, single, relatively free to do whatever the hell I want

Current
Location: Los Angeles, CA
Salary: 110k
Rent: 2000/mo
Pros: I'm already here, high salary, decent work location close to cheap(ish) housing
Cons: Far from all family ($350 off-season plane trip or 3-day drive), hate my work, mostly driving rather than biking because of poor infrastructure and bad urban planning, high rent, local government drama

Offer
Location: Austin, TX
Salary: 90k
Rent: ~1700 probably equivalent
Pros: Very close to all family - easy weekend trips, better renting options near work for walk/bike, office is nice and I love the team from small business trips I've done
Cons: Moving will be expensive, lower salary, I'll have to fight with HR to let me take the cut (HR is weird...), Austin is experiencing a population boom and will likely become more expensive in the next few years.


I think, adjusting for COL I'll probably lose about 2-3k in my savings over the course of a year (including the 401k match loss due to smaller salary to take the percentage from).

So the question is if the benefits are worth the dollar amount loss. My actual savings percentage will likely go up but the total amount will go down. Any thoughts? Advice?

PoutineLover

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Re: Pay Cut?
« Reply #1 on: March 22, 2018, 11:54:01 AM »
Sounds like your quality of life will be better at the new job, so that would be a huge pro. On that kind of income I don't think 2-3K a year is too big of a price to enjoy your commute and work more, plus being close to family is a huge plus, especially if you end up having kids. You will probably end up making more over time anyway with raises so I think the life aspect of things is more important.

tooqk4u22

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Re: Pay Cut?
« Reply #2 on: March 22, 2018, 12:19:58 PM »
Check COL calculators COL Calculator

Also, keep in mind that TX has no income tax where as in CA you are probably dropping $5-7k for state taxes. That pay cut will probably net you more money overall.

Desirable area, better adjusted COL, near family...sounds like a no brainer.

honeybbq

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Re: Pay Cut?
« Reply #3 on: March 22, 2018, 12:32:24 PM »
Check COL calculators COL Calculator

Also, keep in mind that TX has no income tax where as in CA you are probably dropping $5-7k for state taxes. That pay cut will probably net you more money overall.

Desirable area, better adjusted COL, near family...sounds like a no brainer.

Exactly. Half that pay cut you'll 'get back' since no state income tax.
I'd do Austin in a heartbeat!!

rws

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Re: Pay Cut?
« Reply #4 on: March 22, 2018, 12:46:07 PM »
My impression from reading your post is that you really want to make the move and believe it will make you happier.

Have you visited Austin? If so what did you think of it?

The company I work for has a division in Austin and every single person I've spoken to there has moved from somewhere else in the country and says they absolutely love it. Great weather, lots of other young people moving in for jobs, great downtown/nightlife, the list goes on.

"Moving will be expensive" - I won't press you for numbers, but will it really be that bad in the scheme of things? And if you move somewhere you love and are happier everyday will you really care after the fact?

"...more expensive in the next few years" - maybe, maybe not. You can't be certain and unknowns like this probably shouldn't dissuade you from moving to a place where you will be happier.

90k is a LOT of money for a single 26yo. You could live nicely on that in Austin (or just about anywhere for that matter). Sure it's a pay cut, but if you're also cutting out a lot of bs in your life (all of the Conts of LA), your life will be vastly improved.

mxt0133

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Re: Pay Cut?
« Reply #5 on: March 22, 2018, 12:49:56 PM »
I'll just put this out there, start looking for jobs in Austin and see what your market rate is.  It might make it easier to make the decision if taking the pay cut is something you will be OK with if you did an in-company transfer.

RidetheRain

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Re: Pay Cut?
« Reply #6 on: March 22, 2018, 02:46:46 PM »
Wow. I didn't think this would be so solidly on one side.

I admit, I'm mostly confused because of the way the pay cut was presented to me. I was basically told that they couldn't in good conscience transfer me because it wasn't fair to me. I told them I'd like a few days to think about it (thank goodness), but I've had that buzzing in my head ever since - is it really that horrible of a thing to do?

Some of the questions:
I have been to Austin a few times and enjoyed myself. To me, a place is mostly about the people in it and my family is there and I have friends nearby.

I have been looking for work outside of the company as well, but I haven't gotten to the numbers stage yet. I feel that this is at least consistent since I know that I'm a fair bit overpaid in LA based on old interviews.

Moving would require breaking a lease as well as the actual moving. It's probably $6k at least. I've got the cash, but I'm young so I have sticker shock on the big number :)

rws

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Re: Pay Cut?
« Reply #7 on: March 23, 2018, 07:03:35 AM »
I'd like to think that if I were in your situation and not happy, that I would make the move.

Food for thought on the moving costs:
- Can you negotiate to get your employer to pay some of the moving costs since they are cutting your pay?
- sell everything you own that can't fit into your car so you don't have to pay to move it.
- see if anyone in Austin is looking for a short-term (or long term?) roommate until you recoup the 6k.
- Any chance your landlords would work with you on breaking the lease if they are able to find someone to replace you?
- Would your employer hold off on the move until your lease is up?

Even if none of these things are possible, you're still doing amazingly well for a 26yo, if that makes you feel better.

btw I don't know if you ever plan on getting married / buying a house / having kids, but if those things are in your future then get used to shelling out large sums of money ;)


katsiki

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Re: Pay Cut?
« Reply #8 on: March 23, 2018, 07:54:59 AM »
Do it!

Austin is great.  It will be even better for you if you like your family.  :)

Moving expenses for a single person....  You may want to re-think what you move if it really becomes expensive.

RidetheRain

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Re: Pay Cut?
« Reply #9 on: March 23, 2018, 09:53:08 AM »
Yeah, the moving costs definitely seem high.

The biggest cost is the $4k for lease breaking. It's a big company type apartment complex and they have zero flexibility. I've talked to the front office and they don't have the power to change it apparently and the corporate people just don't care.

The last 2k is expected expenses for
1. One-way uhaul with car tow
2. Hotels for two nights
3. Food on the road
4. Re-buying stuff I get rid of prior to moving (couch, kitchen table, etc)

The furniture that I plan to sell is all in pretty crappy condition because I bought cheap used IKEA stuff four years ago. It has deteriorated :) I don't anticipate getting much money for it if anything. I expect to stay with my brother (he's the best!) until I can sign a lease.

I'm not including things like first and last months rent or security deposit because I consider those part of my regular spending - it's really just a cash-flow thing.

Do my numbers not work out? It seems like a lot, but it's all accounted for. I've been worried I'm underestimating it.

nwhiker

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Re: Pay Cut?
« Reply #10 on: March 23, 2018, 11:08:05 AM »
Yeah, the moving costs definitely seem high.

The biggest cost is the $4k for lease breaking. It's a big company type apartment complex and they have zero flexibility. I've talked to the front office and they don't have the power to change it apparently and the corporate people just don't care.

The last 2k is expected expenses for
1. One-way uhaul with car tow
2. Hotels for two nights
3. Food on the road
4. Re-buying stuff I get rid of prior to moving (couch, kitchen table, etc)

The furniture that I plan to sell is all in pretty crappy condition because I bought cheap used IKEA stuff four years ago. It has deteriorated :) I don't anticipate getting much money for it if anything. I expect to stay with my brother (he's the best!) until I can sign a lease.

I'm not including things like first and last months rent or security deposit because I consider those part of my regular spending - it's really just a cash-flow thing.

Do my numbers not work out? It seems like a lot, but it's all accounted for. I've been worried I'm underestimating it.

I would do it in a heart beat, especially if you are unhappy with your current job and location. I would bypass the apartment management and go straight to the corporate people. I have moved three times and each time the complex has let us out of the lease if I was moving for job related purposes. Also what exactly is charged in the lease breaking fees? I am not familiar with CA but most places require that the landlord try and rent the spot and that they can't just make you pay the remaining months on the lease, unless they actively marketing the unit and are unable to get a tenant.

The moving costs seem a little high for the size of apartment. I would recommend getting a quote from a company such as UPack. They will give you a price based on the estimated linear foot of a trailer to haul your items. They drop off said trailer and you pack it, the tighter the better as you are only charged on the space your use. They pick it up and 2-3 days later it will be in Austin. Then you don't have hitch your car and you can drive it to Austin. That cuts your hotel stays to only one night.

Phoenix_Fire

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Re: Pay Cut?
« Reply #11 on: March 23, 2018, 02:55:13 PM »
I think you are overthinking it.  You want to be in Austin, the pros outweigh the cons for you.  The salary differential you are already at peace with.  So now you are down to your "moving costs".  If someone told you that you could be much happier, closer to family, in an area you want to be, and all you had to do was pay $6,000, wouldn't you be all over that? 

You're 26 and make an incredible salary for not just your age, but any age. $6,000 is NOTHING.  Go to where you will be happy. 

ZMonet

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Re: Pay Cut?
« Reply #12 on: March 23, 2018, 03:27:31 PM »
I echo looking into other alternatives before you pay $4k to break the lease.  I've "broken" a few leases and every place, even corporate ones, let me out as long as I found a tenant to sign a new one year lease.  If the corporation has that ridiculous a policy, I'd keep the lease just in case...

One question...In terms of career progression, is there anything about being in the LA Office that is preferable (closer to top level management, most choice assignments, etc.)?

Otherwise, I'd be off to Austin ASAP!

civil4life

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Re: Pay Cut?
« Reply #13 on: March 23, 2018, 04:09:14 PM »
Quality of life to me is worth way more than my paycheck.

I have changed a 2 mile commute to 30 miles.

I am hoping for a job I interviewed this week.  At best I will lose $10k a year more likely $20k.  This job would put me back home.

In your situation the math is probably a toss up.  This is a quality of life decision.

I would read your lease.  Most states are not allowed to profit from breaking a lease.  So if they are able to turn around and rent the place before your lease was up then they can not keep it.

How much time is left on the lease?  Could you negotiate staying where you are for a little longer?

RidetheRain

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Re: Pay Cut?
« Reply #14 on: March 23, 2018, 04:41:05 PM »
Thanks for the advise everyone! I'm going to meet with HR next week and hammer out the details. I'm hoping I can grab some relocation money from them which might help. I'm really anxious to get off the project I'm on now despite some wonderful people.

I'll definitely start asking for discounts in the hopes that I can lower my moving costs. Part of the lease break problem is that there are currently a LOT of empty units. I have two options with the lease - a flat fee (4k) or pay through the end of the lease unless they fill the apartment. My lease has about five more months on it so it's definitely safer to pay the fee considering the number of vacancies and the fact that I need to have the person a full month before I move out. Once I get everything agreed and approved at work I'll definitely look for someone, but you plan for the worst and hope for the best.


Someone asked about career progression. That's sort of a funny question because there are lots of factors that are very different between the two. My current position has high salaries and raises and lots of options, a possibility of 100% travel, but often tedious work. The new position is known for low(er) salaries/raises, less choice in projects, little to no travel, working on POC and cutting-edge ideas. Both are "feel-good" jobs in health and public service industry which was always the most important thing to me. I guess I feel like they equal out a little in the big picture, but I prefer the interesting day to day work in Austin. And as a side note, my current office building is really kind of disgusting and the Austin office is brand spanking new.