Thoughts on moving to halftime?

[Snapdragon48]

My husband and I are seeking more flexibility with our time, especially with the recent birth of our first child; so we’re considering him teaching halftime. That way he can work with me at my small business and then we can tag team taking care of our 4-month old daughter at our business.

We’re both 31 and our daughter is 4-months old
Married, filing jointly in Indiana

The numbers (current):

His income (teacher): $50,000
My income (greenhouse business): $45,000
Side jobs, interest and other misc. income: $5,000

Total Income: $100,000

2019 Pre-Tax Deductions:
HSA: $7,000
His Trad. IRA: $6,000
My SEP IRA: $10,000

AGI: $77,000

Taxes:
Federal (including SE taxes): $13,000
State: $3,500

Assets:
My Roth: $19,800
My SEP: $19,400
His Trad. IRA: $18,400
His 403B: $6,800
Savings Bonds: $4,000
Bank Stock: $750
Cash Value Life Ins: $15,000
HSA: $30,000
Emergency Fund: $10,000
Savings (but currently sitting in money market acct.): $28,700
Daughter’s 529: $7,500
Vehicles (2 paid for cars): $18,000
House: $165,000

Total Assets: $325,350

Total Liabilities: None. Woohoo!

Expenses (annual):
Renovating an old house: $2,000
Insurance (car and home): $1,500
Household (misc.): $1,500
Charity/Donations: $1,000
Fuel: $1,500
Groceries: $4,000
Dining: $2,200
Auto (maintenance, registration, repairs): $2,000
Health: $500
Utilities (elec., phone, water, sewer, nat. gas, internet): $4,000
Entertainment (hulu, netflix, other): $500
Gifts: $500
Clothing: $500
Travel: $750
Health Insurance Premiums: $4,000

Total: $26,450


Ok, so if we decide that my husband goes halftime that changes the following:

1. He would lose job-provided health insurance. And we would be buying on the marketplace.
2. He would have a pay cut, but this should be partially offset by working part time in my business and not paying for childcare for our daughter.

The numbers (projected):

Income:
Teaching salary: $22,000
His greenhouse income: $10,000
Which is a decrease of $8,700

Expenses:
Health Insurance Premiums: $6,000
Which is an increase of $2,000

Net Change: loss ($10,700)

The halftime plan is definitely riskier for relying on higher deductible/OOP (and pricier premiums even if we don’t use it—and we hope to not use it). It’s also riskier for relying on the continued profitability of my seasonal business. Additionally, it is a loss of income unless business increases.

Returning to full-time teaching may be an option once kid(s) starts school, buts it would require an increase in student enrollment or a position opening, which might not fit our timeline. Of course, depending on how well we actually work together and how the business is doing my husband may eventually consider joining my business full-time.

Alright, so what would you do? Continue teaching full-time or move to halftime?

Also here’s the health plan comparison for risk assessment.

Current school policy:
$4,000 premium (school pays remainder)
$3,350 individual/$6,500 family deductible
$6,500 OOP max
HSA eligible

Marketplace plan:
$6,000 premium (after estimated tax credit/subsidy)
$5,300 individual/$10,600 family deductible
$13,500 OOP max
HSA eligible

[Freedomin5]

It looks like you currently live off of one income, which means your husband’s current income goes entirely towards savings. That means your husband could drop to half time if he wanted. The only thing that would go down is your savings rate. Am I reading that correctly?

[Snapdragon48]

Yes, it would decrease our annual savings and increase also our risk. Being a small business, my income is not guaranteed. That coupled with a very high deductible marketplace plan, if something were to go wrong, do we have enough?

[Smokystache]

Just a couple of thoughts/questions. Some related to money, some not.

First, congrats on your hard work and frugality paying off so that you and your partner have this option. Most wouldn't be able to even consider this. It appears that financially you'll be fine - just depending on what your savings goals are and how high you want your savings rate to be.

Questions/Considerations:
- does he like/love teaching? If he wanted to go back, would it be easy or nearly impossible to find a position he liked in the area?
- do you have an estimate of how much his presence at home/business might increase the business income? If any?
- does the prospect of the two of you being around each other - both as a family and working on a business together - sound wonderful? terrible? somewhere in between? I don't mean anything by this, but some relationships work best when they spend some time apart (work).
- does he already help in the greenhouse business (I'm making some assumptions that if he's a teacher that he has some time off in the summer (prime growing/harvesting/selling season)). Does he like that work? Do you like having him around and wish he were around more?

From the outside, this looks like it could be the ideal lifestyle/family setup. A family run business that provides a lot of flexibility; children getting lots of time with both parents, each adult learning and specializing in various aspects of the business, etc. But that only works if you both love the work and love spending lots of time together.

[Snapdragon48]

Thanks for the questions! Definitely things we've been thinking and talking about.

He does really like the work of teaching (don't know that he'd say love) and teaching half time may give him the right amount of teaching while limiting some of the frustrations with the job of teaching (i.e. enjoying working with the students and actually teaching vs. the endless testing and data churning to show effectiveness to non-teachers). Going back to full time could be a challenge. When we'd be ready for that we'd have to watch for an opening at his school (either through increased student enrollment or another teacher retiring/leaving). But if it came to it, there are other schools in the area and he has two subjects on his license, so he's fairly employable and Indiana is currently experiencing a teacher shortage.

It's hard to estimate how much he'll add to my business. If he doesn't go part time at school, I'll need to hire someone else at the greenhouse and I'd budgeted about $10,000 for that. So if he went halftime he'd take the place of that part time worker, thus putting in $10,000 for that estimate (in addition to potential childcare savings). Depending on how things work out and how well we work together there would be room to expand the business adding new revenue lines and services and having a business partner on board would go a long way toward making that happen.

We already work together at my business and for the most part it goes fairly well. He helps afterschool and weekends in the spring and then as needed in the summer and fall. He mostly enjoys the work (and admittedly sometimes I ask him to do the worst jobs and some of the heaviest lifting). We both like variety and think that working at the greenhouse in the afternoon might just strike the right balance of variety. But your point of spending time apart is very well taken. Communication is key.

But as it is we both wish we spent more time together and now with our daughter. Currently, I work every day and every weekend February through early November and part time Dec. and Jan. This leaves just a few weekends and Christmas break for time together and that's often superseded by all the other good intentions we don't get around to during the year (visits with extended family, house maintenance, business improvements, etc.). Something's got to give.

At this point we're willing to give it a try. I just have lingering doubts about putting us in a financially riskier situation (perhaps mostly fueled by my mother-in-law). That's why I'm very appreciative of an outsider's perspective, so thanks very much for your response!

[Louisville]

It's usually time to move to halftime when you've played the first and second quarters.

[Villanelle]

How confident are you that your expenses aren't going to increase with the baby now added to your family?  Do you want more kids?  What does the high deductible plan coverage look like for that?  And would you be wanting to scale back your business at all in that case (even if it's just for a few months postpartum)?

How secure is your job/income?

Any chance he could perhaps do some tutoring on the side, in addition to the half-time teaching job?

[Freedomin5]

Yes I was also going to suggest that he tutor part time if you’re worried about the risk of your inconsistent greenhouse income. It’s always good to have multiple income streams that are not correlated. (The wealthiest people in the world have on average seven separate income streams. Affluent people have four. We would do well to learn from them.)

He could always tutor online, which would give him flexibility. Sites like VIPkids or ABCkids might be a good fit.

Regarding your question as to whether it would be enough, it would be tight but it should be enough. You have several thousand dollars in fluff spending that could be cut in the event of an emergency (eg, donations, travel, gifts, dining out). So even if you earn nothing in your business (highly unlikely), you guys could squeeze by on your husband’s part time income.

[Snapdragon48]

It's usually time to move to halftime when you've played the first and second quarters.

Ha!

[Snapdragon48]

How confident are you that your expenses aren't going to increase with the baby now added to your family?  Do you want more kids?  What does the high deductible plan coverage look like for that?  And would you be wanting to scale back your business at all in that case (even if it's just for a few months postpartum)?

How secure is your job/income?

Any chance he could perhaps do some tutoring on the side, in addition to the half-time teaching job?

Fairly confident about expenses, but I did bump up the household and grocery category. I know when she's older there will likely be more expenses. But so far happy and healthy and not adding much extra expense to our budget (cloth diapering, breastfeeding, and many hand-me-downs=much savings).

We may try for one more, but we can save up for that (and have enough in our HSA now to cover if....surprise!). Healthcare.gov estimator gives a guess of $6700 for an uncomplicated childbirth for the policy we're looking at. Something down the road most likely.

No, I wouldn't scale business back with a second kid. And as best you can, we'd try to get the timing right again... that is aim for an off-season birth date. Not that you can truly plan on that. But, overall, having my husband being a bigger part of the business would certainly make things easier for a second pregnancy, delivery, and recovery. Although my greenhouse help did a fantastic job running the place this fall without me there as much! Whew!

My job is fairly secure--there's always work to be done. I have no debt in the business and have retained enough capital to be cash flow positive and at the moment I do not have any immediate major expenses/improvements pending. Of course, a recession would not be ideal since I'm in retail, but generally things turn around and I think we could weather a few years of meager sales if needed.

Tutoring--perhaps. We don't want to get in a situation where we've given up 40% of his salary and find ourselves not making it. So we'll do what we have to, but if the goal is to gain more time, tutoring would not help us toward that goal. If he was replacing his time with tutoring (which I'm assuming doesn't pay high dollar), he might as well continue teaching.

However, something we have thought about is buying a rental property and managing that. We'll see.

Thanks for the questions!

[Snapdragon48]

Yes I was also going to suggest that he tutor part time if you’re worried about the risk of your inconsistent greenhouse income. It’s always good to have multiple income streams that are not correlated. (The wealthiest people in the world have on average seven separate income streams. Affluent people have four. We would do well to learn from them.)

He could always tutor online, which would give him flexibility. Sites like VIPkids or ABCkids might be a good fit.

Regarding your question as to whether it would be enough, it would be tight but it should be enough. You have several thousand dollars in fluff spending that could be cut in the event of an emergency (eg, donations, travel, gifts, dining out). So even if you earn nothing in your business (highly unlikely), you guys could squeeze by on your husband’s part time income.

Excellent point about multiple income streams.

If we do this, we are looking to add more income streams both through the household and business. For example, currently my greenhouse is open spring through fall, but I believe there's enough of a market to do some winter business with Christmas trees, wreaths, poinsettias, etc. That's something I've not had energy or gumption to do on my own after a long season, but might if I had more backup from my husband. And we've thought about rental properties. We'd also like to start investing beyond just investing for retirement.

[Much Fishing to Do]

Given your husband 'likes' teaching, he really is worth $10k to you business (allowing you to not have to spend that on someone else who not be as invested in doing a good job), you can spend more time with your kids, and your expenses are low enough this is not a strain on your finances but just a reduction in savings, I'd say go for half-time.  I'm consulting from home now and though I dont have a lot of control over my hours (i just have to get certain things done when they pop up) when it works out to half time its just fine (it is a job I hated at 60 hours week...dont care for at 40...but at 20 its a totally fine job).  Given he already 'likes' his job I dont see the harm in slowing down FIRE with the lesser savings to be in such a good place right now.

And sure its never gonna be 'easy' and might take a little time...but he really can always go back to full-time if its later decided its not the way to go.  I guess I'm saying don't be afraid to give it a shot, there seems to be a lot of thought put into it.

[Villanelle]

How confident are you that your expenses aren't going to increase with the baby now added to your family?  Do you want more kids?  What does the high deductible plan coverage look like for that?  And would you be wanting to scale back your business at all in that case (even if it's just for a few months postpartum)?

How secure is your job/income?

Any chance he could perhaps do some tutoring on the side, in addition to the half-time teaching job?

Fairly confident about expenses, but I did bump up the household and grocery category. I know when she's older there will likely be more expenses. But so far happy and healthy and not adding much extra expense to our budget (cloth diapering, breastfeeding, and many hand-me-downs=much savings).

We may try for one more, but we can save up for that (and have enough in our HSA now to cover if....surprise!). Healthcare.gov estimator gives a guess of $6700 for an uncomplicated childbirth for the policy we're looking at. Something down the road most likely.

No, I wouldn't scale business back with a second kid. And as best you can, we'd try to get the timing right again... that is aim for an off-season birth date. Not that you can truly plan on that. But, overall, having my husband being a bigger part of the business would certainly make things easier for a second pregnancy, delivery, and recovery. Although my greenhouse help did a fantastic job running the place this fall without me there as much! Whew!

My job is fairly secure--there's always work to be done. I have no debt in the business and have retained enough capital to be cash flow positive and at the moment I do not have any immediate major expenses/improvements pending. Of course, a recession would not be ideal since I'm in retail, but generally things turn around and I think we could weather a few years of meager sales if needed.

Tutoring--perhaps. We don't want to get in a situation where we've given up 40% of his salary and find ourselves not making it. So we'll do what we have to, but if the goal is to gain more time, tutoring would not help us toward that goal. If he was replacing his time with tutoring (which I'm assuming doesn't pay high dollar), he might as well continue teaching.

However, something we have thought about is buying a rental property and managing that. We'll see.

Thanks for the questions!

The thing about tutoring is that is that it would be pretty easily and quickly scalable, especially if he has a a few very pleased clients.  He can work 3-4 hours a week for a small bit of extra cash, but then also have happy clients singing his praises and willing to give referrals if your green house business has a slow period or you want some extra cash.  Having a foot in the door would make it much easier to scale up than starting from scratch if you need more money, but would still leave most of his newly freed-up 20 hours free. 

[leighb]

We are in a similar situation but on the other end of parenting. The child is now out of school. We are both in the education.
In the last few years I've moved to being more self-employed and my husband has moved from being a part-time teacher to a full-time teacher. Having him be full-time has really decreased the stress around health insurance. Before we bought on the market place and had high deductibles. Having good health insurance is really really nice.

There are a few other things about part-time teaching: You don't work half as much and the stress is not cut in half. You do no have the same job security if there are cuts. You are not communicated as well with by the school. You are as involved with the school community.

All that being said: Given the chance, I think he would prefer going back to part-time teaching because he highly values his time and hobbies.

[Snapdragon48]

The thing about tutoring is that is that it would be pretty easily and quickly scalable, especially if he has a a few very pleased clients.  He can work 3-4 hours a week for a small bit of extra cash, but then also have happy clients singing his praises and willing to give referrals if your green house business has a slow period or you want some extra cash.  Having a foot in the door would make it much easier to scale up than starting from scratch if you need more money, but would still leave most of his newly freed-up 20 hours free.

Good point about foot in the door.

[Snapdragon48]

We are in a similar situation but on the other end of parenting. The child is now out of school. We are both in the education.
In the last few years I've moved to being more self-employed and my husband has moved from being a part-time teacher to a full-time teacher. Having him be full-time has really decreased the stress around health insurance. Before we bought on the market place and had high deductibles. Having good health insurance is really really nice.

There are a few other things about part-time teaching: You don't work half as much and the stress is not cut in half. You do no have the same job security if there are cuts. You are not communicated as well with by the school. You are as involved with the school community.

All that being said: Given the chance, I think he would prefer going back to part-time teaching because he highly values his time and hobbies.

Glad to hear from an educator who has done this! Thanks for the reply!

Good point about halftime not meaning half the work. This is something we're aware of and have discussed with friends who have done halftime schedules. We think, like our friends, that he'd be able to strike a balance that was fair to him and fair to the school and students. And while that may error to the benefit of the school periodically we think the trade-off is worth the extra time gained for our family.

I don't too much mind a high deductible plan (in fact we have one through the school already though not as high as the marketplace). Healthcare is expensive and I am ok with shouldering some of that cost through a deductible, especially if I can utilize money saved tax-free in my HSA. My frustrations come from a high deductible plan that also comes with high premiums. The plan we're looking at would have premiums higher than what my mortgage was, which seems insane for something we hopefully rarely use. So this is the main part of my hesitation about the halftime plan.

[GoCubsGo]

First off, you've sound like you've built a pretty cool life for someone so young (business owner who owns their house outright).

I'll preface this with I'm a bit more conservative generally when it comes to finances.  I like to not have to worry about sub $25K financial events that pop up (at the expense of working a bit longer and sacrificing some things I would like to have).

How much would added childcare costs be if your husband works another year or two?  If childcare costs are high it might make sense to stay home.  That said, I'd probably work a couple years longer for the following reasons.

- Bank a bigger buffer. You work a ton of hours right now and you don't seem to mind it.  As the kid(s) get older and you get older you may want to hire more stuff out. 
-Kids definitely get more expensive as they age.  I've been budgeting consistently for 8 years and the costs of the kids from little ones to teenage years jumped more than I ever expected.  Healthcare, vacations, food, clothes, social activities add up quickly.
-I think another year or so might give a bit more clarity to healthcare costs depending on the next election.
-Maybe use that money you bank as a down payment on a solid rental.  In my neck of the woods, rentals don't pencil out but if they do in your area I would most certainly diversify your income stream.  My rentals held up extremely well in the great recession. A rental may help if  your business suffers during a recession.  It's easier to get a loan if your husband is working full time.

I think you'll probably be fine no matter what assuming your husband can go back to full time teaching if things get tight or healthcare costs get nuts. 

[hawksnest]

Imagine how much easier your question would be if you lived in Canada or any other country with single-payer healthcare?

Canadian husband wants to take a small pay cut and go half-time as a teacher so that he can help his wife's business grow and/or care for his child? No problem, just do it.

Here in the US, though, he needs to hold on to his full-time job so that his family holds on to relatively affordable healthcare.

So, that's my advice. He needs to hold on to his job so that he holds on to his family's healthcare.

[calimom]

Imagine how much easier your question would be if you lived in Canada or any other country with single-payer healthcare?

Canadian husband wants to take a small pay cut and go half-time as a teacher so that he can help his wife's business grow and/or care for his child? No problem, just do it.

Here in the US, though, he needs to hold on to his full-time job so that his family holds on to relatively affordable healthcare.

So, that's my advice. He needs to hold on to his job so that he holds on to his family's healthcare.

Sad but true reality of healthcare in the US. Single payer would open up lots of options for many people.

Kudos to you, OP for building up a profitable business doing something you're clearly passionate about. I also own a small horticultural operation (indoor tropical plants) and know the amount of hard work such  an enterprise entails. In your family's situation, I agree with others about your DH keeping his teaching job with its attendant insurance and pension benefits. Can he help during the summers? If you're wishing to scale-up, have you looked into perhaps taking on a part time employee?

In regards to wanting to incorporate having your child at work at the greenhouse, please remember a 4 month old is a different creature than a 16 month old. Once they start walking and developing curiosity, a lot of time is kept keeping them out of harm's way. What are your childcare options?
With a combined $100K family income, you have options  moving forward. I'm also a big fan of  property investment and see the possibilty of adding a well researched rental or two in future years.

And seriously, you're in good shape with a  paid off primary residence, no debt and decent savings.