Author Topic: Worth a pay cut to have more time at home?  (Read 7101 times)

giggles

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Worth a pay cut to have more time at home?
« on: February 11, 2014, 01:25:48 PM »
I currently have a rewarding job that I enjoy.  This year, I will be grossing $69,044, plus 5.5% matching on a retirement account.  I will top out at around $85,000.  On the down side, the job is high stress, and I commute about 2 hours a day (1 hour each way/25 miles).  I am the higher earner by about $12,000. 

I am due to have my first child later this year, and I am starting to wonder at what point a pay cut would make sense.  It would be really nice to spend less time on the road and more time with my child.  My rate of pay is roughly $33/hour, and I have seen some job that would cut my commute time down to under an hour on most days.  However, those jobs top out at around $58,000/year, no retirement match.  I would likely have a change to get the top pay grade, but be maxed out from my first day. 

At what pay level should would it make sense to take a close job?  I am really struggling with what choice would make good personal and financial sense. 

brandino29

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Re: Worth a pay cut to have more time at home?
« Reply #1 on: February 11, 2014, 01:32:13 PM »
Man, there are loads of factors involved but my initial reaction is if you can find a job that's significantly closer and pays $58k that it would well be worth a serious look.  You'll save considerable money on the commute, but more importantly you'll save a lot of time, and you'll have enough stress as it is with the new normal life with a baby that unnecessary work stress on top is probably not worth it. 

phred

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Re: Worth a pay cut to have more time at home?
« Reply #2 on: February 11, 2014, 01:34:45 PM »
try the family leave act for a month & see how it goes.  Can you do any part of your job from home using your computer?  Can you change your job to four ten hour days per week?

MissStache

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Re: Worth a pay cut to have more time at home?
« Reply #3 on: February 11, 2014, 01:43:19 PM »
I am a major supporter of chosing less money for a smaller commute, but there are so many factors here.  What is your financial picture?  How would taking the paycut impact your debt repayment/savings/goals?

giggles

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Re: Worth a pay cut to have more time at home?
« Reply #4 on: February 11, 2014, 02:43:50 PM »
As far as my current job, part time and tele-work are not offered :(  There are some closer locations of the same employer, but I have not been sucessful in transferring or being promoted yet.  Not that it couldn't happen!  I am constantly putting in for open opportunities in the closer offices, but nothing has panned out yet.  That would be my ideal  - work closer AND get paid more.  The other jobs also don't offer part-time or tele-work, so we would still need day care 5 days a week.   

Our only debt is a mortgage at $1900/month. We have enough in savings/investments/low expenses where we are at FIRE if we had no mortgage.  On the lower salary, the mortgage prepayment would most likely be cut, putting our FIRE date out farther. 

The commute runs me about $120 in gas a month, and I have a Honda that thankfully requires little investment to keep it running well. 


frugally

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Re: Worth a pay cut to have more time at home?
« Reply #5 on: February 11, 2014, 02:50:03 PM »
Based on my math, here's what this job costs you:

Gas: $1440/year
Commute Time @ $25/hour: $12,000/year ($50/working day)

Seems like an obvious answer to me, but it depends on how much your time is really worth to you.  I value my time higher, so I'd pick a closer job in a heartbeat.

dragoncar

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Re: Worth a pay cut to have more time at home?
« Reply #6 on: February 11, 2014, 02:52:33 PM »
I would definitely compute the marginal take-home wage per hour of the higher-paying job. 

Example:
Job 1 after-tax take home = $X, hours worked = Y
Job 2 after-tax take home = $S, hours worked = T

Marginal take-home wage per hour = ($X-$S)/(Y-T)

Then figure out if it's worth the extra hours

ps: for "hours worked" include commute time, and you can adjust the take-home value by any additional expenses like gas
« Last Edit: February 11, 2014, 02:54:14 PM by dragoncar »

Gray Matter

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Re: Worth a pay cut to have more time at home?
« Reply #7 on: February 11, 2014, 02:55:34 PM »
As others have mentioned, there are so many factors, it's hard to know what the right decision is for you.  When my children were young, I chose working/money over having more time and that worked for us.  But now I have chosen to go part-time in order to have more time with my kids and I cannot tell you how happy I am with that decision.  My evenings/home life is 10 times better.  Work is just a little more stressful trying to cram more work into smaller space.

Good luck!

Thegoblinchief

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Re: Worth a pay cut to have more time at home?
« Reply #8 on: February 11, 2014, 04:06:47 PM »
I chose pay cut, but I was already part-time. Going to weekends-only actually saved us money because homeschooling cut out daycare and school tuition.

In your situation, I'd probably still choose the shorter commute, but maybe give yourself more time trying to transfer with your current employer. For all you know, the shorter commute jobs will be extra stress in the actual jobs themselves.

MissPeach

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Re: Worth a pay cut to have more time at home?
« Reply #9 on: February 11, 2014, 06:00:44 PM »
I chose pay cut, but I was already part-time. Going to weekends-only actually saved us money because homeschooling cut out daycare and school tuition.

In your situation, I'd probably still choose the shorter commute, but maybe give yourself more time trying to transfer with your current employer. For all you know, the shorter commute jobs will be extra stress in the actual jobs themselves.

I would take a look too. I also would check sites like glassdoor to scan for any signs they don't have work/life balance. I wouldn't want to take a new job to find out I'm expected to work 80+ hours per week.

frugally

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Re: Worth a pay cut to have more time at home?
« Reply #10 on: February 12, 2014, 11:02:32 AM »
I chose pay cut, but I was already part-time. Going to weekends-only actually saved us money because homeschooling cut out daycare and school tuition.

In your situation, I'd probably still choose the shorter commute, but maybe give yourself more time trying to transfer with your current employer. For all you know, the shorter commute jobs will be extra stress in the actual jobs themselves.

I would take a look too. I also would check sites like glassdoor to scan for any signs they don't have work/life balance. I wouldn't want to take a new job to find out I'm expected to work 80+ hours per week.

Totally agree with checking glassdoor.  That's how I chose my current company over another one I was considering, and I don't have any regrets!

Evie

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Re: Worth a pay cut to have more time at home?
« Reply #11 on: February 12, 2014, 09:35:58 PM »
I would stick with the current job and keep trying for the promotion or transfer to the other location. Take you leave and maybe you can negotiate the move with your company if you mention you are otherwise thinking of not coming back?

AccidentalMiser

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Re: Worth a pay cut to have more time at home?
« Reply #12 on: February 12, 2014, 10:13:05 PM »
Could you move closer to your job?  I'm sure you've considered it, but I didn't see it mentioned in the thread.

imustachemystash

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Re: Worth a pay cut to have more time at home?
« Reply #13 on: February 12, 2014, 10:20:25 PM »
What is your spouse's commute like?  If you are both working far away from home, then I would say go for it.  However, if your spouse's commute is pretty easy, I would keep your job because that extra money will really compound over time.

Heather

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Re: Worth a pay cut to have more time at home?
« Reply #14 on: February 13, 2014, 11:26:02 AM »
It was worth it to me.  I work 4/5 of regular hours, for 4/5 of the pay.
It gives me either one day off a week, or early pick-ups from daycare every day.


giggles

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Re: Worth a pay cut to have more time at home?
« Reply #15 on: February 13, 2014, 04:16:17 PM »
My spouse's commute is great:  his home office is less than 30 mins away and when he is in the field his commute is part of his 7.5 hour work day, so most of the time he leaves after me and gets home first!  With the kiddo, he will be the main person the day care picking up/dropping off falls to.

 We bought our home to keep his commute short. We considered moving closer to my job, and tried it on a temp basis but found we lost out on family time and the great (free!) stuff in our current area for an area with worse schools that we liked much less. 

I also have the option of temp part time for 1 year after baby, 20% pay cut but 4 day work week.

Another transfer opened this weekend, so I am going to put in again.  I have been in my current office five years, so I hope it is just a matter of doing my time before I can move or get noticed for promotion.

libertarian4321

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Re: Worth a pay cut to have more time at home?
« Reply #16 on: February 13, 2014, 11:42:57 PM »
If you can afford it (you can easily live off either the lower or the higher salary), it's almost always a good idea to take less pay to have more free time. 

No one ever retires at age 65 and says "I wish I'd spent more time working"- but a lot of people retire and realize they've missed out on much of life by working like a slave.

mm1970

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Re: Worth a pay cut to have more time at home?
« Reply #17 on: February 14, 2014, 07:29:09 AM »
I currently have a rewarding job that I enjoy.  This year, I will be grossing $69,044, plus 5.5% matching on a retirement account.  I will top out at around $85,000.  On the down side, the job is high stress, and I commute about 2 hours a day (1 hour each way/25 miles).  I am the higher earner by about $12,000. 

I am due to have my first child later this year, and I am starting to wonder at what point a pay cut would make sense.  It would be really nice to spend less time on the road and more time with my child.  My rate of pay is roughly $33/hour, and I have seen some job that would cut my commute time down to under an hour on most days.  However, those jobs top out at around $58,000/year, no retirement match.  I would likely have a change to get the top pay grade, but be maxed out from my first day. 

At what pay level should would it make sense to take a close job?  I am really struggling with what choice would make good personal and financial sense.
I cut my hours at my existing job for a couple of years with the kids.  Down to 75 to 80%, and my pay went accordingly.  It was worth it.  I regret going back full time actually.

snuggler

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Re: Worth a pay cut to have more time at home?
« Reply #18 on: February 14, 2014, 01:56:56 PM »
Have you talked to your boss about how much it means to you to get transferred? If you are a valued employee,  talking to your boss about it could only help your chances of getting a transfer to another office.

I know my employer has often found a way to make a transfer happen when it became clear that the valued employee was going to look for something closer otherwise.