Author Topic: SHould I take pay cut for bikeable commute?  (Read 3160 times)

Mustacheyou

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SHould I take pay cut for bikeable commute?
« on: April 21, 2016, 02:41:43 PM »
Hi all,

Currently I make 36,000 a year with about 11k in car loan (small SUV that gets about 28 mpg and has 50k miles on it), 16k in student loans, 3k in credit card debt and I work about 13 miles from my house. My job is uber boring, and I can safely say I'm looking for a change.

I have an opportunity to take a job much closer to my house (within 5miles). This would allow me to sell my car and get rid of that debt. The flip side is that I would make considerably less money. Probably in the realm of 25 - 30k.

Does this transition make sense? I think I know that the decreased commute cost will definitely add up, but is basically a wash when coupled with the decreased salary?

KCM5

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Re: SHould I take pay cut for bikeable commute?
« Reply #1 on: April 21, 2016, 03:25:31 PM »
A 30% paycut? No, that doesn't make sense.

Move closer to your current job or keep looking for one that pays at least within a grand of two of your current job closer to home. Ideally you'd be looking for a pay bump.

jjcamembert

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Re: SHould I take pay cut for bikeable commute?
« Reply #2 on: April 21, 2016, 03:35:02 PM »
If you would sell your car, then sure.

You'd "earn" $11k instantly plus whatever equity you have in the car. The extra $6k you are earning now, even if you are putting it all toward the car, will take you at least 2 years to pay off (not even figuring taxes). Plus gas, plus insurance, plus maintenance. Calculate it out yourself and see which path gets you more money in several years.

One of my favorites:
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/


jjcamembert

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Re: SHould I take pay cut for bikeable commute?
« Reply #3 on: April 21, 2016, 03:47:32 PM »
Actually, WTF, why do you have an $11k car loan on a $36k salary (not to mention other debt) anyway?

Even if you stay at your current job you should consider trading out that car!

JLee

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Re: SHould I take pay cut for bikeable commute?
« Reply #4 on: April 21, 2016, 04:27:09 PM »
If you would sell your car, then sure.

You'd "earn" $11k instantly plus whatever equity you have in the car. The extra $6k you are earning now, even if you are putting it all toward the car, will take you at least 2 years to pay off (not even figuring taxes). Plus gas, plus insurance, plus maintenance. Calculate it out yourself and see which path gets you more money in several years.

One of my favorites:
http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/

I'll give you $11k if you'll give me a guaranteed repeating $6-11k/yr... :P

That's far too much of a pay cut, IMO. If you are considering an instant $11k "earnings", the OP could sell that vehicle and get one for $3k for $8k in "earnings," which would likely be far wiser (and keep the extra $10k/yr in income).

triebs2

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Re: SHould I take pay cut for bikeable commute?
« Reply #5 on: April 21, 2016, 05:14:27 PM »
Hating your job is a great opportunity to make a change. You have to do the math to see how much of a paycut you can handle but still stay on budget to pay off that debt. You have to figure in the ability and cost to get housing closer to a newer job. That much credit card debt is a disaster at your income level, get rid of it ASAP. Your car loan is also way too high for your income level.
In most parts of the country you can get a cheap small place to live close to your job and bike to work. If you can arrange it so that your residence and your grocery store and entertainment options are on a bus or train line, even better.
It might seem stressful to juggle it all, but I would focus on finding a great job opportunity. Then build an economical low stress life around that job. While looking for the job, use every spare dime to pay off that debt, starting with the credit card. Credit cards are the devil unless you can pay the balance down to zero every month.