The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: hello867 on March 11, 2014, 05:29:40 PM

Title: Reader Case Study - Can I quit on Friday?
Post by: hello867 on March 11, 2014, 05:29:40 PM
I really hate my job and would love to quit on Friday.  I had a baby about a year ago and me and my husband agreed that i didn't have to go back to work after the baby. I did go back as there were some major bonuses hanging out there that I wanted to get.  My job requires travel almost every week and it is really hard to be away from baby. Husband travels as well so grandparents pretty much raise our child! However On Friday I get paid one of the last major bonuses and I would like to be officially done. But there has been a wrench thrown into our plans and now it looks like my husband may only have his job for 3-6 months longer. He is fine with getting another job and does not want to stop working in the next few years.

Income: 
Husband - 8K after tax
Me - 7K after tax
Rental - 1.5K
Total - 16.5K

Expenses:
Mortgage/Interest/Taxes/Insurance - 3600
Rental - 1650
Utilities - 650
Cable - 200
Pets -200
Kid - 500
Phone - 135
Auto/Life Insurance -200
Everything Else - 3000
Total - 10,135

Assets -
Cash - 37K
Home -680K
Rental - 250K
Investments/Retirement Accounts - 750K
Total - 1,717K

Liabilities -
Rental 254K
House - 390K
Total - 644K

Net Worth: 1,073K

We want to sell our house and move to a lower cost area. We can do so immediately as we are only in this area for my job if i quit (husband works remote) We are able to move in with my parents for a while until my husband finds a new permanent job which i hope takes no longer than the end of this year.

Is it okay for me to quit or is it just too risky?
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: Gimesalot on March 11, 2014, 05:57:29 PM
After you leave your job, your income will be $9.5k a month, maybe a little more since your husband might pay less in taxes.  Your expense are $10k.  This leaves you with a shortfall of about $8k per year (if you don't round).  Your assets should provide you with enough income to make up that shortfall for a long time.  In the mean time, you may want to save some more cash.  You only have 3 months of living expenses, if you don't want to touch the investment and retirement accounts.

The only thing that stands out, is the child expenses.  What does that pay for?  You state that your child is mostly taken care of by grandparents, so I assume its not daycare or nanny.  How are these expenses going to grow as your child grows?  For example, you seem to be very well off, and most people with that sort of money want their kid to have a horse, play the harp, or partake in some other expensive hobby.  What about schooling?
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: hello867 on March 11, 2014, 06:05:29 PM
Remember our expenses can drop significantly by selling the house and living rent free for a while. Also can relocate to a lower cost area. $500 goes to diapers, formula, random baby stuff. We are not interested in expensive hobbies for the future.
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: GregO on March 11, 2014, 06:14:55 PM
Absolutely!  If you want to stay home with your daughter, you can make the finances work around it.  Your husband has time to find a new job, you guys have a buffer in investments and cash, and you have the ability to cut your expenses down a ton if you moved in with your parents.  Nothing is more important than being home with your daughter, especially if that's what you want.

The small amount of risk is that you have a big fixed expense in the mortgage.  But you have a lot of equity there, so it shouldn't be a problem to sell it if you needed the money.  I'd vote that you quit, take care of your daughter and work on cutting your expenses down while your husband works and starts looking for a new job.  As I'm sure you'll hear from several other people on here, there are many many ways you can begin reducing your expenses immediately.  But selling your house would be on the top of my priority list if I were you.  That's a big expense that could be reduced A TON if you can live anywhere.
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: Gimesalot on March 11, 2014, 06:20:05 PM
Based on your answer, I say you should move forward.  If you don't, you may regret it later when your child is older.
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: minimalist on March 11, 2014, 07:21:52 PM
It is risky because your husband's job is not secure. I would wait until he secures another job. Your house could also take awhile to sell depending on your price and location.
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: ch12 on March 11, 2014, 08:39:19 PM
I really hate my job and would love to quit on Friday. 

Expenses:

Everything Else - 3000
Total - 10,135


Assets -
Cash - 37K
Home -680K
Rental - 250K
Investments/Retirement Accounts - 750K
Total - 1,717K

Liabilities -
Rental 254K
House - 390K
Total - 644K

Net Worth: 1,073K

Is it okay for me to quit or is it just too risky?
After you leave your job, your income will be $9.5k a month, maybe a little more since your husband might pay less in taxes.  Your expense are $10k.  This leaves you with a shortfall of about $8k per year (if you don't round). 

I think that it's strange to have a rental that costs you $1,650 per month and pays in $1,500, but I'm not a landlord.

What concerns me more is your $3000 misc category. If you can cut down $500 per month out of your total budget, you'll be set.
Title: Re: Reader Case Study - Can I quit on Friday?
Post by: spoonman on March 11, 2014, 08:48:08 PM
Do it.  I think that if you sell the house and move to a low COL area you'll be set.  When you're a full time mom you'll also have more time to be creative and find ways to be more efficient with your expenses.