Life changes/career paths/childcare/real estate costs

[cynthia1848]

First time poster.  Have lurked for a while!

We are not great mustachians: we spend a lot.  We also earn a lot and would like to continue our careers, but are not sure how and whether to make a change.

In 2012 we made about 350K and spent about 218K.  Our biggest spending categories:
mortgage 50K
childcare (nanny plus preschool, camps) 42K
taxes (estimated) 34K
home improvement/additions 28K
food 19K
utilities 13K

I note that our home improvements are expected to net 100% if we sell the house, according to our agent friends.
We have about 600K in home equity and 700K in retirement assets.

We are weighing some 'life decisions' and would welcome input.  Those include:
- whether to get a new nanny (cost would jump about 15K)
- whether to move to the country (lower home price; would necessitate job change for me)
- whether to change/downsize/shift my job (compensation would decrease from 110K to 50K; we would need to purchase health insurance; no further need for nanny)

What are your thoughts? 

[AJ]

What is your goal?

[MsSindy]

I think you're going to need to provide a better perspective about what your values are.  Without that, people will apply their own value-system and it won't be very helpful to you.  For example, with that kind of salary, most people would say drop the Nanny, quit eating out so much, raise your own kids, move to a smaller-ish house and live an immensley satisfying and awesome life!

Help us understand what your goals and values are, otherwise you've just set yourself up for some major face-punches!  :)    I think most of us would rather be constructive, however.

[cynthia1848]

We have a few:

- For me, I want to continue working, not drop out of the work force, but would like to spend more time with the kids.  Also, I am not working to capacity at my job right now, but have a face-time requirement regardless, which is frustrating - I would like to change that.
- My husband may need to be close to our current city for work meetings, limiting how far away (1 hr drive?) we could move.
- Living in the country would allow for a slower pace of life and more time spent with our kids, plus lots of land, all of which are appealing.  We currently live a very fast/busy lifestyle and would like a change.  E.g. scheduling time with friends about 6 weeks in advance, etc.
- We have a 4 br house and would like more bedrooms for additional guests/relatives.
- Our current nanny is not smart and is lazy, thus (we think) a bad influence on the kids, so it would be great to change that.

[dizzean]

- Our current nanny is not smart and is lazy, thus (we think) a bad influence on the kids, so it would be great to change that.

Maybe there is some intricacies here I don't understand but..if you pay her for a service and she sucks at it..fire her?

[cynthia1848]

Thus the need to spend more on a nanny, if we get a new one.  I have interviewed a few people and it would cost significantly more to hire someone else.

[tmac]

I have lots of questions. :)

How old are your children? Will they be in elementary school soon? Is the nanny fully time? Could you use a better qualified, part-time nanny instead? If you and/or your spouse downshift your job, you can downshift the nanny too, right? Perhaps even not have one.

On a related note, a bigger house means more work and higher costs. Why live somewhere with only the space you actually need for the full-time residents, then stash some funds to put people up in a nearby B&B? I don't see the value in paying for a big house every day that you'll only use a few times a year. It's like buying a big truck because you need to haul firewood twice a year. It complicates things, and you'll end up spending all of the family time you wanted just doing maintenance.

And I say this kindly: If you're worried about influences on the kids, maybe being around more (nix the nanny and down-shift one or both jobs) would solve that problem. I was a nanny for a year after college. The parents (attorneys) worked early and late, and those three children were the saddest I'd ever seen. The nanny before me didn't speak adequate English and the youngest child didn't really speak until she was about 3 years old, just at about the time I left. While I've known a lot of really great nannies, there's no substitute for parental involvement.

[cynthia1848]

Kids are small - we have 5 yrs until they are all in school.

Nanny is FT.  Yes, downshifting job = downshifting nanny too (none needed, besides occasional babysitting).

Bigger house =/= more costs.  Where we are now is extremely expensive.  If we moved to the country we could get the same or more space for half of our house's value.

[tmac]

True, but I'm not comparing it to what you have now. I'm comparing it to a smaller house also in the country. Seems like a great opportunity to simplify your life and reduce your costs at the same time.

[cynthia1848]

We don't want a smaller house.  We want 5 or ideally 6 bedrooms, to host family (2x/month) and young cousins who stay with us for a month or 2 in the summer.

[Vilx-]

What would your income/expenses look like if you moved to the country? It sounds to me that it's what you'd really like to do.

[cynthia1848]

I think so, but it is scary!

Income would drop to about 275-300.  (My retirement contributions would also decrease.)

Mortgage would go down.  Probably half of what it is now, so 25K.
Childcare expenses would drop to 15K or so (preschool/lessons only).
We would eat out less since I would have more time to cook.

Expenses that would go up - we would have to buy health insurance.  I have priced it out at about 15K/year. 
We would probably also need to keep some of the home improvement budget (20K/yr?) since my husband will have to build a home office and I will want to put in a new kitchen.

[Kenoryn]

It seems obvious to me that you should downsize the job and not have a nanny. This seems to be the better choice for your kids, for you, and possibly financially. Considering that you make a gigantic amount of money, and you want to continue working, money is probably a pretty small consideration for you at this point. If you wanted to you free up some money you could very easily halve your food and utility bills, saving yourself $15K per year. (I have to say your food costs blow my mind. That's more than my annual cost for EVERYTHING).

Regarding the move to the country - don't forget to factor in the pure awfulness of a commute. Even if you aren't commuting, if your husband is, that's a horrific drain on his time and expensive as well.

Also regarding the move: it's not clear to me why moving to the country will result in a slower pace of life for you. Is this related to work? Fewer engagements with friends? What will be different about city vs. country life? Don't forget that living in the country generally requires more time for maintenance, although in my opinion, it's way nicer than being in the city and gives you more options in terms of growing food and otherwise being more self-sufficient.  Also makes for easy childcare when they're a little older as you can just kick the kids out to play and tell them to be home at dinner. ;)

[cynthia1848]

Thanks.  I commute, my husband does not.  I am only worried about downsizing my job because of "Lean In", what if we get divorced, getting back into the workforce, etc., so I don't want to get stuck.

Moving = slower paced because I won't have to go into the office, which makes the mornings and evenings very hectic with nanny hand-off, feeding the baby, making dinner, etc.

[MountainFlower]

I live in a rural environment, and it's not all that simple or slow.  It took some getting used to.  Many people move to our area and leave within the year because they don't realize what the impact of having no grocery store or restaurants within 20 minutes will do to their happiness.  There can be a lot of driving and advanced planning is a must.    From your posts, it just sounds like you are dreaming that your troubles will be few in the country.  :-)  I know you don't really think that, but....sometimes for me, I get single minded about something and I don't take into consideration everything.

First, deal with the childcare situation.  You aren't going to move next week, so get that situation in hand ASAP regardless of everything else. Is a daycare out of the question?   My kids go to an awesome daycare/preschool and it has been a great experience.  I think far better than if they were home with a nanny everyday because the facility is so fun with little teacher turnover and good teacher/kid ratios.  The place isn't much to look at.  It's frankly, getting a bit run down.  However, the kids couldn't care less and the teachers are fantastic. 

Good luck.  Even a few tweaks (eating in more if possible) could result in some big results for your budget.  Working with small kids is really hard.  Hang in there.  It gets easier.

[cynthia1848]

Thanks.  The daycare/preschool combo would be too expensive, about 75K/year.

Good point about being really rural - although we already do have to drive 20 minutes to get to some of the stores around here.  I am thinking more of a small town where you can get to everything within 15 minutes.

[Kenoryn]

Oh, I misunderstood about your husband having an hour drive into the city. So he works from home, but would have to make an occasional 1-hr commute to the city for meetings. I also didn't get that moving to the country was what would allow you to work from home. All makes sense now.

I'm not sure what you mean by "Lean In", but if downsizing for you means you'll still make 50K/year, I wouldn't worry about security. 50K is plenty to live off of. You couldn't live the lifestyle you're living now, but you could live a perfectly happy lifestyle with money to spare. It would just take an initial adjustment.

[MsSindy]

By "Lean In", do you mean the book by Sheryl Sandberg?

It sounds like you may be hesitant to lose your salary, and the potential to maybe return to the workforce if you should want/need to.  Saying that your income would drop to ~$275, is still  A LOT of money and if you think about what your priorities are, you could have an awesome life on that salary.  Maybe do an exercise whereas you budget out "your new life" and see if you think you could be comfortable with that.

Also, think about ways that you could keep your skills up: on-line schooling, part time work, virtual work, self-employed.  Allow yourself to think about all the possibilities, you're obviously an accomplished woman - I bet you can make happen anything you want....just need to figure out what you really want!

[mustachecat]

I just read Lean In, so a lot of your concerns are fresh in my mind. I think it's totally reasonable, especially since you're a high earner, to worry about the impact of downshifting now on your professional life down the line. But many posters here are trying to stop working as soon as possible, so our advice might not fit your needs.

As others have said, a HHI of $275-$350K should afford you an insane amount of options. You can afford to make almost any decision you want to. My thought is that you should pursue finding a better nanny and a job in a less time-intensive industry. No opinion on the move.

Edit: I forgot a word!

[cynthia1848]

Thanks.  My job has less upside potential than my husband's - he makes at least 250K while I make 100K.  I am worried about "leaning out" because what if my earning potential doesn't get back up to 100K ever?

Time intensity - true, but I am a professional (think medicine/law) so changing industries sounds strange to me.

[Dee18]

I long fantasized about living in a more rural area.  Fortunately, I was able to find a summer job (I'm a professor) where I have that...for  a month.  I love it, but the experience has made me realize that I probably would not like it year round.  Where I am in the summer there is one small food store in town, more than an hour's drive to music, theater, good library, and at least 45 minutes even to car repair.   When I was offered a full time job I turned it down, largely because parents in the town told me what a struggle it was to have a teen there.   I realized my teenager would have little to do just at the point where she is getting engaged in science and wanting to do internships...not to mention what passed for entertainment for teens:  video games (even movie theater was an hour away), drugs, and sex.   Now, this was a town of 2,000---if you are considering a town of 20,000+ or an area that is really a distant suburb to a major city it would be quite different.  Just be sure you are being realistic about what the life would really be like.   Also be realistic about working at home with young children.  As far as your career track, yes, you will lose ground by taking the lesser job. That's the reality.  I am a middle aged professional who did not leave the work force and I have friends now calling trying to get back into full time jobs.  But they are not as valuable as someone who has substantially more work experience and, in my field, a known reputation...and they are competing with highly educated, energetic younger professionals.  That said, the ones who enjoyed being home with kids have no regrets.  The ones who did it because their husbands wanted them to are not so happy about it.  Think hard about what you want and go for it.  You have fabulous options and many choices.

[mustachecat]

Thanks.  My job has less upside potential than my husband's - he makes at least 250K while I make 100K.  I am worried about "leaning out" because what if my earning potential doesn't get back up to 100K ever?

Time intensity - true, but I am a professional (think medicine/law) so changing industries sounds strange to me.

Without really knowing what you do, it's hard to give good advice. If you were a lawyer at a frenetic law firm, perhaps look into going in-house at a university or a large nonprofit. If you're a doctor at a frenetic hospital, maybe join a smaller private practice? Or find a different kind of position at a medical-related nonprofit? If your main concern is being able to earn $100K, there are many options. If your main concern is being able to earn more than $100K in the exact career field you're in now, your options may be more limited.

[cynthia1848]

Thanks.  We are thinking of a big small town (30K or so) that is also about an hour outside the city.  I grew up in a small town that WAS the city, so our kids will have more options than I did.

Dee, yes, I don't want to leave entirely.  My working at home would also be limited to the times when we had childcare.

Mustachecat, thanks, the nonprofit ideas are good.  My field does have some related nonprofits, so I may explore those in the future.