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

[Gumbo4x4]

BTW, losing the $8,000 travel cost is more like getting back $10-12,000 of he lost income since he's currently paying that $8k out his take home pay. So, that helps even more than it appears on the surface.

 

[eliza61]

Not sure if you've thought about this but taking that huge of a cut, how will it effect your retirement savings? If things are going to be that tight, I'm assuming you won't be saving for retirement.

 

[sissy_ib]

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.

They are already filing in two states. Now, regardless, they only have to file in one.

 

[disykat]

I think housing is usually the biggest deal in these kinds of circumstances, to downsize, eliminate the need for a vehicle, move to a less expensive neighborhood, etc. Since you're not mentioning that, it sounds like your only change will really be losing discretionary spending money. It sounds like it might be a good decision for your DH.

We have never chosen to go down in salary, but DH has definitely turned down opportunities to make more. When he figured in his happiness quotient and what was best for family time, it just hasn't made sense.

 

[tvguy]

I'd put the landline phone back in, and cut back on the cellphones, look at pay as you go phones.

I think there is room to cut money from the grocery budget too. Store brands are your friend, and planning your meals around what is on sale can save a lot too.

There is too little info to go on, but I am having a hard time understanding how taking a $30k pay cut is a wise move. Sometimes a job is a job, not what you want to do, especially if you have kids.

 

[Gumbo4x4]

They are already filing in two states. Now, regardless, they only have to file in one.

Yes, but the point I was addressing was the idea of paying no state income tax on money earned in Texas. I don't believe that will be the case as it is not his home state. I used to work 30-50 days a year in TX/Mexico, but was still considered employed in MO and paid taxes accordingly.

 

[LJSquishy]

I think you will be fine.

If you don't currently plan a weekly menu for all of your meals, that would definitely save you a little extra on your grocery bill. I make things from scratch like waffles & freeze them rather than store-bought frozen waffles. This is just one example, but it really adds up.

I like the idea of getting your family's haircuts at a school. They are dirt cheap and all of the students are supervised by the instructor.

I would completely cut out vacations. My husband and I don't have kids yet but we've been married for 7 years and have only taken one vacation together ever (DW!) except for our honeymoon. Instead of taking a trip somewhere, spend a fraction of that by just doing fun things in your own city more frequently. Go out to matinee movies on the weekends, go to the fair/carnival, etc. You could do many activities spread throughout the year for 1/10 of the cost of a single vacation.

It sounds like you already live without a lot of extras, so as long as you continue to be smart about where your money is going you should be just fine.

 

[manning]

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.

Look into self watering containeers.

Super easy ti make and super to maintain and grow

Here's how to make one.

http://www.youtube.com/watch?NR=1&v=5bhW5hf09ak&feature=endscreen

Last year it was super hot. Nothing grew. I grew tomatoes in these and got more than I could use. Plant any veggies you want.

http://www.youtube.com/watch?NR=1&v=5bhW5hf09ak&feature=endscreen

 

[bumbershoot]

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.

I had a feeling that you homeschooled, given how you mentioned that sending them to school still wouldn't get you out of the house for work because of your youngest. Others caught the "public" word, though.

I don't know how many school-aged kids you would have, but gosh I would think that school clothes, activities, possible book/lab/whatever fees, and the possible/probable (if my son going to the Y and seeing what the other kids have) increases in the "I wants" would all result in MORE money going out than you do now. I think that sending them to school-school would be on the very bottom of my list of things to do that would help out financially, especially since, as you said, it still wouldn't get you out of the house.


Definitely make sure he CAN still consult independently.


Since he'll be going so far away for work, does he get per diem or will he have to cover that himself? Will they pay his hotel costs, etc etc? Will he be allowed to keep frequent flyer miles? (if so, that helps SO much with future travel you guys might do once things settle down)

 

[sissy_ib]

Yes, but the point I was addressing was the idea of paying no state income tax on money earned in Texas. I don't believe that will be the case as it is not his home state. I used to work 30-50 days a year in TX/Mexico, but was still considered employed in MO and paid taxes accordingly.

I was just letting OP know that there is no way they will have to file in TX. Right now they are paying state income taxes in their home state and the state income is being earned in. At the least they will not be double taxed on the income earned in TX.

 

[dpswift]

Please do not second guess your choice. From experience it is most likely the right thing to do. I read an earlier post by you as to how unhappy you were. I could have written a very similar story last year. I begged my husband to look for another job. Not only was his bad attitude hurting our family, but I no longer felt safe with his employment. The company was losing a great deal of money. DH had nothing to do with the lost money however he was well paid. Sure enough my husband was laid off at the beginning of the year.


We have cut out extras and it is surprising how much longer money lasts. We really do not notice the cuts we have made so far. As a PP said your expenses will go up if you send your kids back to school. DD2 is a senior and all we here about is I need money for this or that. At least the other kids get it.

 

[OrangeCountyCommuter]

I was just letting OP know that there is no way they will have to file in TX. Right now they are paying state income taxes in their home state and the state income is being earned in. At the least they will not be double taxed on the income earned in TX.

For those of you reading along...

If the state you are working in has an income tax then yes you have to pay it. THe only reason the OP is "clear" is that Texas is one of the few states without an income tax.

I have an arrangement very much like the one OP describes and I pay income taxes in two states (I do get a credit from my state of residence for taxes paid as a non resident of the other state)

 

[rainynight]

Do all hair cuts at home. Saves a ton of money and is very easy to get the hang of.

Shop at thrift stores. We buy almost all our clothes there. Around here the first Saturday of every month at Goodwill is 50% off everything. Its amazing what you can find there. I buy brands like Ralph Lauren, Tommy H., Gap, Banana Republic, The Children's Place for less than $2 per item for adult stuff and kids clothes come to about 80 cents per item. About 30% of the stuff I buy still has tags on and never been worn.

Cook from scratch and have a meal plan. I buy bulk organic grains from Azure Standard for cheaper than regular stuff in grocery stores. It costs pennies to make a loaf of bread verses $3-4 in stores for a decent brand. A gallon of organic milk in stores is $6 and I make into yogurt so a gallon of yogurt for $6 versus store prices. Make granola instead of buying expensive cereals. Could go on and on but you get the point and it takes almost no time at all to do this stuff once you get the hang of it.

Shop around for insurance. A few years ago we found a much better rate for our car and homeowners insurance.

Look into refinancing. We did last summer and are paying $230 less per month and saving over 60k over the life of the loan after factoring in closing costs we had to pay.

Hope this helps.

 

[pocomom]

Not sure if you've thought about this but taking that huge of a cut, how will it effect your retirement savings? If things are going to be that tight, I'm assuming you won't be saving for retirement.

We will probably have to reduce the amount we put away, but we have normally do a good job of saving extra for retirement and I think worst case scenario will be this income for 3 years. But dh believes this position will fill a hole in his resume that will allow for better paid positions in his future. hopefully the loss could be made up for then, or once I start working again.

 

[pocomom]

BTW, losing the $8,000 travel cost is more like getting back $10-12,000 of he lost income since he's currently paying that $8k out his take home pay. So, that helps even more than it appears on the surface.

Good point!

 

[princesspwrhr]

I had a feeling that you homeschooled, given how you mentioned that sending them to school still wouldn't get you out of the house for work because of your youngest. Others caught the "public" word, though.

I don't know how many school-aged kids you would have, but gosh I would think that school clothes, activities, possible book/lab/whatever fees, and the possible/probable (if my son going to the Y and seeing what the other kids have) increases in the "I wants" would all result in MORE money going out than you do now. I think that sending them to school-school would be on the very bottom of my list of things to do that would help out financially, especially since, as you said, it still wouldn't get you out of the house.

This is a great point. I initially thought OP homeschooled too, then read all the "take them out of private school" responses and thought I missed something until the OP cleared that up. We are also a family of 5, I homeschooled until this year when our situation changed and the girls all went to public school. We haven't had an increase in the "I wants" (thankfully) BUT - the spending overall has increased in small ways.

Like the OP I used to spend about $100-150 a week in groceries for a family of 5 - $200 if we needed TP & toiletries. I now average $200-250. Groceries have gone up a little bit and that does count for some of it, but the majority of it is that I'm packing lunches for everyone every day. It used to be that the girls and I would sit down and have lunch at home, but things that I may have made at home - especially if it's a hot lunch - don't travel as well, so just rethinking lunch has increased the grocery bill. (the school lunch would be more expensive and none of the girls would eat it. )

I've also had to replace 3 out of 3 backpacks already this year. Thankfully, I had a very sturdy laptop backpack already that my highschooler uses now, but the 3rd graders backpacks I wasn't so lucky with. They started the year with ones they had (and had been using for 3 years for co-op, library, sleepovers etc), and by Christmas needed new ones. Clothing is also a bit more frustrating. When you're homeschooling and the kids hit that mid winter not quite spring growth spurt and 3 out of 4 of their pants are suddenly way to short, it's not a big deal. Wash the pants that fit more often (even mid day) or hang out in your jammies. But when the kids have to be out and about EVERY day, you have to make sure that every pair of pants is washed or fits. The Goodwill and consignment shops are great in this aspect, but it's just easier homeschooling when it's okay to wait another month to bring out the shorts & not buy more mid season.

It's also a total pain in the rear now to schedule medical and dental appointments. My highschooler missed a solid week and a half for a broken leg & surgery, then follow up appointments. It took her almost a month to catch up in her AP & Honors classes - and that's with the teachers sending work home (which ended up "busy work" not actual work. ugh) If she were homeschooled, she would have missed the two days of the break and surgery, and not wasted her time on busy work. She gets out of school 2 hours before the younger two (and leaves 2 hours prior) which drastically reduces the open window for scheduling her orthodontist appointments since I have to be home to get the younger two on and off the bus. Appointments at the same time, now mean wasting more of my day checking 3 kids out of 2 schools and waiting for them to get to the office. If you're interested in staying part of your kids education, check into the volunteer rules at your school. Most now will not allow you to volunteer with a sibling in tow, and I don't know how common this is, but parents are not allowed to volunteer at our school unless they are part a paying active member of the PTA. (Which I think sucks)

OP- Since you still have a younger one at home, I would look very seriously at the ability to continue homeschooling, or the necessity of public school in the near future. This is the time of year that co-ops and state organizations start having their used curriculum sales - maybe you can find the items you want for less than retail. You can also sell items that you aren't going to need anymore. Do you have a co-op? is there anything you can teach at the co-op? That was a great way for me to make some extra money at the time. You said photography, sociology & writing- If you have a co-op available would you feel confident in teaching a class in any of those subjects? Do you have your evenings available to offer yourself as a tutor to highschoolers? (public/private/homeschooled)

With regards to the kids activities - instead of just assuming they will have to be dropped are there alternatives? Can the kids reduce the number of activities? For example if they are (hypothetically) in Scouts, soccer, swim lessons, & music lessons - just go down to two instead of drop everything.

It may still be the right financial choice and the right choice for your family at this time to put the kids in school. On the other hand, it may also end up less expensive in the long run to keep them home at least until you know for sure it's not an option.

 

[pocomom]

There is too little info to go on, but I am having a hard time understanding how taking a $30k pay cut is a wise move. Sometimes a job is a job, not what you want to do, especially if you have kids.

Dh feels this position will help him get something better in the future. Good company with a good name and job responsibilites that fill holes in his resume.
He is also insecure in his current position. They have lost money the last several years, and he feels lay-offs are emminent, so the job may not be there in a few months anyway. It has taken a LONG time to get an offer, so he is afraid if he doesn't take we may not find anything for a long time after he is laid off. He is thinking less money is better than no money.
Plus dh spends more time working than anything else he does, by alot. He wakes up goes to work and comes home eats and goes to bed. He works most of the weekend too. He sees the kids maybe an hour or two a week. It is hard when basically your whole day everyday is something that makes you completely miserable. I love him and I want him happy. Sometimes, even as a parent you need to make a little room for yourself, or you have nothing left to give anyone.

 

[Paging Tom Morrow]

Make sure you re-price your car insurance premiums. Your annual mileage appears like its going to be significantly reduced, which should yield a savings in this area.

 

[ilovemk76]

For those of you reading along...

If the state you are working in has an income tax then yes you have to pay it. THe only reason the OP is "clear" is that Texas is one of the few states without an income tax.

I have an arrangement very much like the one OP describes and I pay income taxes in two states (I do get a credit from my state of residence for taxes paid as a non resident of the other state)

Some states reciprocate. In those cases, you only pay state income tax in the state you reside in. It is most common in border states.

 

[Lilliputian]

Can you move to Texas? Cost of living is so much lower. You'll probably be able to get a bigger, newer house at a lower cost. There's no state income tax, and homeschooling laws are wonderful here.

I realize that moving does have a lot of upfront costs, but you can find ways to save (used boxes, rented UHaul or Pods, etc.). It's a big change, but it might be worth it.

I'm a homeschooling mom of 5 boys, and putting my kids in school would be the last thing I'd want to try. I'd give up everything else first.