making a 30k pay cut work...UPDATED- we did it!

[pocomom]

After a long time looking DH got a job offer which will mean a 30k pay cut, but will position him better for other employment in the future, plus he is insecure and VERY unhappy in his current employment right now... We have some ideas on earning a little more (consulting), and dh will have greatly reduced commuting costs ($800 a month) no dry cleaning and some other savings, which makes up for about 10k of the loss. We can pay our bills and basic needs on this salary but there is nothing really left over. Dh will have some consulting hours from his old employer which will keep us at current salary until late summer, but I'm worried about after that... I'm looking for ideas on other ways we can cut back. We already have no cable, no home phone, don't eat out much, and are pretty controlled on our grocery spending about 100-150 a week for a family of five. We'll of course scale back on vacations and the kid's lessons and have them just pick a favorite activity. If need be in September I could always send the older kids back to public school, but we still have a little guy so I can't get outside- the- home- full- time -employment especially because dh will be out of the state most of the week. I do some part time at home work now that earns us about 24k a year, but doing that when I'm completely on my own most of the time will be hard enough. So I'm back to finding ways to cut back, vs more ways to earn...I would love to help this work for him. Ideas?

UPDATE on last page

 

[HeatherC]

Congrats on dh getting an offer! Hopefully, things will turn around financially before too long for you.

In the meantime, some possible ideas...

1. Can you raise your deductibles on car and homeowners insurance? Can bring down your monthly payments a bit.

2. Is it possible to go on an installment plan for electric, gas, etc..? That would help you know exactly what the bill is each month.

3. If that isn't possible, unplug everything when not in use. Plugged in appliances, tv, lights, still use power when not on. In this case, every bit would help save.

4. Maybe try to plan groceries for a month. You can save a lot on food by doing this. Make and freeze meals ahead. If you make one meatloaf, make two and freeze one. Make one baked ziti and freeze one.

5. When grocery shopping, try to morph one meal into two or three. Buy a roast chicken for one night, then next night can be chicken quesadillas, use carcass for chicken soup, etc.. Saves a ton by doing this.

6. Try couponing for things like shampoo, soap, etc.

7. Make your own laundry detergent. Never done it myself, but others here can probably help you with recipes.

8. See if your dh would now qualify for a low mileage discount on car insurance if commuting costs have dropped. Can save a lot on premiums.

9. Get prices from a couple insurance companies to see if you can save.

10. If you get a huge tax refund every year, maybe reconsider that and adjust your withholding to bring home more each week.

11. See if you can carpool kids to activities to save on gas.

12 Combine errands to save on gas.

13. See if you can prepay or save now for next winters heating costs. If you use a pellet or woodstove, buy their supply now so you don't get hit with a big bill next fall when income is less.

14. If you have car payments, maybe sell and get a cheaper car with no payment.

15. Cell Phone...if you have a contract, find out how much to get out of it. Use a prepaid plan like Virgin Mobile or SmartTalk from Walmart. We pay $35 a month per phone with unlimited text and data and 300 talk minutes. Saved us a ton by not renewing our contract when it expired.

16. Sell any stuff you want to get rid of on Craigslist and put the money in savings for Christmas, birthdays, etc.

I know not all these ideas are probably even feasible, but may help give you some ideas.

All the best!!!

 

[Buzzsgramma]

wow that is some pay cut..scale back on vacation..i would think no vacation,public school..sure i am assuming they are in private? now..

.I would aquaint my family with thrift store shopping...forget new...cell phones? isnt there a trac fone or something at Walmart..? pay as you go...

Maybe try bulk shopping Sam's, Costco if u aren't already... really we are retired now but rarely eat out except when we go to Disney...maybe Culvers on occasion..with the gr kids.

Five kids..teen agers..do they have part time jobs? i guess cut back on paying for sports activites like you mentioned...

i would want a big emergency fund in place before he changed jobs...and no dbr except maybe the house...

cut out gift giving except with your own family..hope this all works out for you..
.

 

[msmama]

I think for me, I would IMMEDIATELY start living on what the future paycheck would be. That would give you a chance to see if it's really doable.

I'd bank away any of the "extra" consulting money and as much of your income as possible.

To me, it seems that cutting costs means thinking ahead - which is also hard to do when you're facing less money. But if you know your kids are going to need school supplies and you see super cheap folders, buy and stash away. Same with things like school clothes and stuff.

Like a pp said, Meal planning is a big one. Buy only what you need and make sure you use it all. Buy cheap and stretchable things - beans, pastas, veggies on sale. Maybe eat less meat.

Good luck!

 

[MinnieLovesMickey12]

The most obvious way to save money would be to take your kids out of private school. That seems like a no brainer unless you live in a really bad neighborhood and the schools suck.

 

[mistysue]

If your older kids are in high school, I would try not to switch them to public. Any younger, I would put them in public school to save on that. Switching high schools messes with college applications. (some will officially tell you it doesn't, but every school I applied to wanted to know why, I was applying to places that had much lower standards than my grades and I got turned down)

The thrift shop is also a good idea. If you find one or two and just try to go once or twice a week- don't buy anything unless you find the perfect thing. You can get some real steals like a $100 coat for $2, but if you try to just buy everything because it's cheap you end up with a closet full of crap.

You said it's not an option, but have you compared childcare costs to what you would make at a job where you would need the child care? If it's a wash skip it, but it sounds like you make good money part time at home, you may be able to make up the difference yourself.

I feel for you. DH and I got married 5 years ago and he had a great job right out of school... then his contract expired and our income goes up and down like crazy every 4 months. He has multiple schools who hire him part time... one pays about 1/4 the first job for identical work. Our kids have nothing to drop as all of their activities are therapies so we just have to pretend we're broke all the time.

 

[rebeccalb10]

I'm not sure where you live but a friend of mine who has been chronically unemployed had been growing a veggie garden the last few summers and has gotten a lot of veg.

 

[Colleen27]

I'm not sure where you live but a friend of mine who has been chronically unemployed had been growing a veggie garden the last few summers and has gotten a lot of veg.

I probably save about $1000/year with mine, but there is some set-up cost involved depending on circumstances - in my case, raised beds were about a $500 investment in our first year, and now I spend about $50 in seeds and seed starting supplies each spring. In return, I get more veg than we can eat so I freeze and can a lot. If you have a sunny yard and decent soil you can certainly get started cheaper and start saving in your first season.

 

[Shelly F - Ohio]

Buy in bulk and clip coupons.

Combine errands

Shop at farmers markets for cheaper produce.

Get hair cuts at your local JVS the students often do the cuts for cheap or free.

Look into getting oil changes done at the JVS too they are usually very cheap.

Have a rummage sale

 

[clh2]

Don't forget - a 30K decrease in pay -decreases what you will owe for both fed and state taxes. I.e. if you are in a 30% tax bracket - that will "narrow the gap" by about 8K/year, since you will owe less taxes.

And a friendly reminder - make sure to account for the taxes that will be owed on the consulting income (i.e. FICA, fed and state taxes).

 

[MomToOne]

I don't see that you've discussed Medical Insurance anywhere. Is the part your DH will have to pay more or less than at his current job? If it's more, you have to add that to the amount you need to figure out how to cover. If it's less, it's more money you'll have to work with. I bring this up because I've experienced wild swings in insurance rates as I moved from company to company....

I've done a 30K cut in the past, about 7 years ago. It was extremely rough, but saved my sanity and got me to where I was happy again in my career. The key for me was to track every penny of my spending, and constantly review my budget to look for places to cut. I had my daughter in a private school, and was determined to keep her there (it was just the best situation for her at the time due to various issues). I was able to get tuition assistance, even though my salary was more than respectable and I never thought I'd qualify - it's just that I was poorer than the other parents generally sending their kids to private school LOL Look into that if you can. Also, look at big ticket items like car payments and your house payment - can you go down to one car? Can you downgrade a car from one where you have a payment to one where you won't? Can you refi your house, possibly extending the number of years the mortgage is for, to get a lower payment? (Before everyone gets up in arms about that - I wouldn't normally suggest that, but sometimes you gotta do what you gotta do to save your sanity.)

 

[mistysue]

If your insurance is changing also try to find out what your cost will be- I almost switched plans a few months ago then realized somehow our best cost result was paying our full premium through cobra. You might want to look into what (if anything) the company is offering and see what private plans would cost you.

 

[MrsPete]

I think for me, I would IMMEDIATELY start living on what the future paycheck would be. That would give you a chance to see if it's really doable.

This is the best advice on this thread! Small pieces of advice are useful, but this is a big, overall way to gauge whether it's going to work for you.

Other things I'd consider:

- If he leaves and then wishes he could go back to his old job, how do-able is that?
- You said he looked a long time for this job. Now he'll be "last hired" and the breadwinner of the family. Is this a secure situation?
- You said in passing he'll be out of state frequently. Is this something you're already used to? How will this affect you financially and otherwise?
- You say you can't go back to work right now, but you intend to do so in the future? So this is a temporary situation? That's a whole lot easier than saying, "We're doing this forever."
- Could you look into keeping children in your home as a way to bring in some income? Perhaps after-school kids -- parents still pay pretty well for this service, but it doesn't tie up your whole day.
- Can you get rid of one car? We were a one-car family for years (and we lived in the country), and although many people say, "Oh, I could never", there is no other cut you can make that'll take so much off your financial plate in one fell swoop.

 

[sk!mom]

We actually did this about 10 years ago. In our case we had been planning DH's exit for a while because he was so unhappy in his high stress job and we wanted him to be able to pursue something that he would enjoy and that would allow him to be home more.

We cut our budget quite a bit but we didn't want to give up vacations or Kid's activities. Part of our planning was me going back to work before DH made the switch. It did involve paying day care for one child but honestly it was worth it. DH was home much more in his new position and so much happier and less stressed.

Becoming a two income family was definitely the right decision for us.

 

[Disneychix]

I don't know the line of work your DH currently does but I would be careful and make sure he will still be allowed to do consulting work (after his current contract is done). Make sure he has not signed any non-compete forms.

Also, you have some older kids. Do they have jobs? Maybe there are some things they can pay for ie. phones, 'fun' money.

 

[SueInBoston]

Track every dollar you spend...I use Quicken but there are many programs and some are free...it's a real eye opener how much a dollar here and a dollar there add up...

 

[pocomom]

Some things I didn't mention:
Dh works currently 1.5- 2 hours away in NY and NJ, we live in PA. His new job will be half at home and half in San Antonio, TX with paid travel.
We homeschool currently, but there are expenses, although many optional, with doing this versus public school. The biggest one being my time in which I can't be earning. The part time gig I have now is very good. I work very little, a couple of weeks every few months, it is very flexible and I get paid well. I can't easily parlay it into something bigger because I handle projects largely from one company, and it is the same work every quarter. Other than it, I have essentially been a stay- at- home mom for 11 years, I was a freelance photgrapher/writer before that and my degree is in sociology, so it would be very hard to make a full time salary that would net us more than my part time one does now, especially if you add in childcare and other expenses. I may be able to pick up a few freelance assignments for a little extra, but the world of writing and photography has changed alot since I made a living at it, lots of unpaid, low pay content out there now! I intend to go to work full time once my youngest is school aged,which would be 3 more years, so we do know this is a temporary situation. My oldest is 11 so the kids picking up any of the slack is out of the question. I don't think we can go down to one car, but we were going to buy a new car this spring for dh, which we obviously won't now.
Dh feels the salary would be temporary, he is being hired from an outside consultating company who then hired a recruiter to find him. He feels at the date of a new contract he would be offered more due to less hands being in the pot. But of course it is the big unknown.
The advice of living on it now is smart. The tax implications are a good point we need to look into, right now I believe we have to file in NJ and PA for state... not sure how working out of Tx would change things, but dh is the tax guy in our family. Lots of great ideas and things to think about so far... Dh pointed out that in the weeks he will be home just getting rid of his commuting will give him 15-20 hours more time to pick up other projects. If he can get some it would go along way, as he just can earn much more than I can right now. I think we'll have to change our mindset too, what I earned and anything extra was always our "fun" money for vacations and things we wanted but didn't need, now that income we will need to save for those things that always come up at the worst times, like car repairs, and needing a new roof, or if his contract doesn't get renewed.
The biggest optional expenses we really have are things for the kids, so I know they will have to make sacrifices, but given the choice between having a dad that is actually around sometimes and happy or a few more vacations, and ski lessons, I think it is clear what we should do.

 

[sissy_ib]

Some things I didn't mention:
Dh works currently 1.5- 2 hours away in NY and NJ, we live in PA. His new job will be half at home and half in San Antonio, TX with paid travel.
We homeschool currently, but there are expenses, although many optional, with doing this versus public school. The biggest one being my time in which I can't be earning. The part time gig I have now is very good. I work very little, a couple of weeks every few months, it is very flexible and I get paid well. I can't easily parlay it into something bigger because I handle projects largely from one company, and it is the same work every quarter. Other than it, I have essentially been a stay- at- home mom for 11 years, I was a freelance photgrapher/writer before that and my degree is in sociology, so it would be very hard to make a full time salary that would net us more than my part time one does now, especially if you add in childcare and other expenses. I may be able to pick up a few freelance assignments for a little extra, but the world of writing and photography has changed alot since I made a living at it, lots of unpaid, low pay content out there now! I intend to go to work full time once my youngest is school aged,which would be 3 more years, so we do know this is a temporary situation. My oldest is 11 so the kids picking up any of the slack is out of the question. I don't think we can go down to one car, but we were going to buy a new car this spring for dh, which we obviously won't now.
Dh feels the salary would be temporary, he is being hired from an outside consultating company who then hired a recruiter to find him. He feels at the date of a new contract he would be offered more due to less hands being in the pot. But of course it is the big unknown.
The advice of living on it now is smart. The tax implications are a good point we need to look into, right now I believe we have to file in NJ and PA for state... not sure how working out of Tx would change things, but dh is the tax guy in our family. Lots of great ideas and things to think about so far... Dh pointed out that in the weeks he will be home just getting rid of his commuting will give him 15-20 hours more time to pick up other projects. If he can get some it would go along way, as he just can earn much more than I can right now. I think we'll have to change our mindset too, what I earned and anything extra was always our "fun" money for vacations and things we wanted but didn't need, now that income we will need to save for those things that always come up at the worst times, like car repairs, and needing a new roof, or if his contract doesn't get renewed.
The biggest optional expenses we really have are things for the kids, so I know they will have to make sacrifices, but given the choice between having a dad that is actually around sometimes and happy or a few more vacations, and ski lessons, I think it is clear what we should do.

There are no state income taxes here.

 

[momxx5]

I really believe that y'all will be able to make.

We've experienced total job loss, along with all that goes with that.

DH is currently working at a 75% pay cut. I finally have full time employment with health benefits. We are praying so hard that DH's job situation will imporve and we will know by August. That feels like a million yrs from now.

As a mom of many, and make a lot of choices so the children would have to best available to us options for their future, I strong suggest that unless you really, really have to that you NOT change the children's schooling. That stablility will comfort them when so many other things will be changing.

It sounds like you are aware of all the budgeting that will make this work.

Are any of your children old enough to babysit? .......because if possible you would be able to maintain a part time job outside the home.

Another idea would be to babysit other children in your home. Possibly new moms looking for someone to watch their babies (we have so many teachers at out elementary school that have new babies and are desperately looking for home day care) or even after school sitting.
As a homeschooler you could possibly offer your serves as a tutor.

Best wishes for your family & your DH with these new opportunities. Hopefully withing the year you'lll be happily posting that your DH has been promoted and all is well

 

[Gumbo4x4]

There are no state income taxes here.

But he may or may not have to pay state income tax on that money in his home state since he doesn't reside in TX.