I have a job offer for a permanent work from home position with no geographic restrictions, so I could move out of state later on if I decided to. This is a rare opportunity in my field, however it’s a significant pay cut. We are not hurting for money but the thought of a pay cut is always daunting. My wife is okay if I take a pay cut. We have one kid and one on the way.
Current salary: 126,000
WFH salary: 96,000
Wife’s salary: 190,000. She helps her parents financially, probably around 10% of take home
Mortgage: 3,100 (29 years left)
Average monthly credit card balance: 2,000-4,000
529 contribution: 1,000
Utilities: 300-400 in winter
0% loan for boiler/mini splits: 300 (5-6 years left)
Cell phones: 100
We max all tax advantaged accounts (401k, HSA, backdoor Roths, DCFSA).
Anything leftover goes to taxable brokerage or crypto account.
No car payment now but will probably buy a new minivan or SUV next year.
We make lump sum payments for life insurance, car insurance each year.
My wife spends quite a bit on groceries and likes to go shopping. We don’t really budget much. If she wants something she’ll get it. So there is definitely room to cut back on spending. I’m not sure if the 529 contribution is too low or too high but that could be cut back too. Childcare would obviously go up with a second child. However our first one will start grade school in a couple years. If needed we could always scale back on 401k contributions.
Pros of WFH:
-Less stress. I’ll only be using my keyboard, mouse and work phone. My current job has some light physical stress where I stand a majority of the shift or do some light lifting. There’s mundane tasks that I get stuck with, but I wouldn’t have to deal with those with the WFH job.
-No commute. No stress from driving in traffic. Save on gas and wear n tear. Get an extra hour of sleep each night.
-Can move to more desirable or lower cost of living area later on.
-No annoying coworkers to deal with in person.
-No contact with people. Don’t want to get Covid.
-Don’t have to pack lunch or eat out.
You don’t specify, but with what you listed you must be stashing away well over$100k each year. With the qualifier of not knowing your net worth, I agree, it doesn’t seem like you will miss $30k/year*. It doesn’t seem to really be a financial decision, as much as it’s a lifestyle decision.
*Unless “one on the way” ends up affecting wife’s significantly higher salary. Be sure she’s not going to want to stay home, or otherwise cut back after there’s a new baby.
That 30k cut is only 15k out of pocket after taxes, right?
I think you meant physical, but don’t forget mental, which is only less if you (and your family!) can keep a work-life balance. Not everyone can or wants to WFH full time – many want to go back to the office to get away from their family. If your wife doesn’t WFH and kids are at daycare during your work hours, then it should be fine, but if not, or if kids stay home when sick, etc, there could be a learning curve.
Yeah but now your fridge becomes a temptation. If you haven’t done the WFH thing for a while, this can become a problem.
It’s nice that your offer has no geographic restrictions – I’m restricted to where my employer already has employees (and therefore health benefits and paycheck processing). I’m guessing this is a 1099, not a W-2?
I’ve been WFH full time for ~10 years. I’m sure this held back my income somewhat (that and working for the same company for so long), but I’m happy with it – no unpaid commuting time, no stress from traffic, plus the ability to do the things I couldn’t do at the office (like posting here) more than make up for it.
I would take the lower-paying job. You’ll get to spend more time with your family and be less stressed out.
That extra income is getting eaten up.
Your high household income is eating up most of that marginal income through taxes. After Federal income, State income, Social security, Sales, and any marginal property tax you probably only get to keep 50 cents on the dollar, so you are really only losing 15k income
You are spending more money driving(wear and tear, maintenance, depreciation). Probably 25-60 cents a mile or so depending on how nice your car is.
Wasting your time getting ready for work and commuting (1-2 hours per day?)… at $50 an hour that is $50-100 times 20 days a month it costs you $1000 - $2000 per month when you value your time properly.
Lunch costs you extra if you eat out or at a cafeteria. Or you spend more time preparing a lunch that you can take to work.
You are probably also wasting money on work clothes.
Most of the extra money you are earning at the current job exists in financial fiction only.
I’m going the other way! 100% WFH now but currently negotiating for another role that has potential WFH 1-2 days a week. IMO hybrid is best…
Higher salary but like @l33tsauce mentioned it will be eaten up with hidden costs. It will be temporarily remote due to covid and i’m hoping to solidify the WFH component after I come on board. Challenge is i’m negotiating thru a recruiter staffing agency. The agency has a contract with the state and I will be working for them on a contingent basis, so don’t want to push too hard.
I just made the same decision and I am really looking forward to it for all the pros you listed (starting after the new year, so we’ll see how it turns out). Not as much of an immediate paycut, but less guaranteed upside. On the flipside, it’ll give me the flexibility to moonlight as a consultant and hopefully build that into a full-time opportunity.
WFH you could potentially save quite a bit on childcare for a few years. Depends if you think you could take care of your kids while working. Some parents I know were using half-day childcare instead of full day. Get the bulk of their work done when home is quiet. Then do the rest while kid is napping. It’s a bit like a second job to look after young kids but that could close the gap in income quickly, at least until they are both in elementary school.
Personally, I was WFH half of the week before the pandemic and 100% WFH now (but may be back in office 50/50 in Spring), I’d likely take a pay cut to stay 100% WFH but maybe not that large but my commute is 3 miles/5-10 min. But the quality of life of WFH may well be worth it.
Also your own WFH + high mobility may create more opportunities for your spouse. It’s harder to move and change jobs if two people have to find good opportunities. Much easier if it’s just one.
If you haven’t done a lot of WFH, there are other potential cons of WFH to be aware of.
isolation - I’m mostly a introvert but I miss the interaction of going to work and seeing people. Work was one of the few things that pushed me to go out of the house and do stuff w/ people.
less physical actviity - this can result in weight gain and negative health impacts. It may not seem like a lot but when I went to the office I used to drive to work, walk across parking lot, up stairs across building, back and forth to get coffee, lunch, visit coworkers, the lab, etc.
Now for work I roll out of bed and sit all day.
difficulty maintaining work vs home divisions - when you WFH the line between work and life gets grey. I found my family expecting me to do things cause I was there but I was working… "dad can you ?? " "honey can you … " “it will just take a minute” … I also found myself working longer on occasion and “just checking” email which turned into 30-45 minutes of work.
bad ergonomics - at work we had high quality more expensive office furniture and they designed it all with proper ergonomic setups. I’m middle aged now and the less favorable ergonomics from WFH was the thing that pushed me into having pains with my wrists. At home my setup wasn’t ideal ergonomically but it worked ok. Turns out ‘ok’ wasn’t good enough for months on end. Like at home I had typical home stuff like a $100 office chair that had suited me fine for years. But after WFH for 8 hr a day for months I now understand the difference between a $100 chair and an $800 chair.
None of these are too major and I’ve learned to deal with them but might be stuff you wouldn’t think of really having an implact until you do it a long whiel.
You’ve already spent $800 on a chair (I think mine was only $230, but I’m always on the lookout for the bigger and better chairs), but IMO a sit/stand desk is as important and can be had for less. Also add some simple home workouts (pushups, crunches, dips, lunges, pull-ups, etc) to your schedule. Sitting all day can’t be good.
I’m sure you already know all this, but knowing is only half the battle .
Boy I miss my stand up desk in the office. That’s the only thing I miss from the office. But I’m too cheap to fork $2k in a desk like that. I got one for $500 thanks to a $1k allowance we got in April 2020 but it’s not as good. Smaller desk, not as easy to raise and lower even though both are electric. But like jerosen said, nowhere near enough to make me want to go back.
I think the physical activity depends on each person. For me, I got more exercise done WFH because I can go run or swim during my lunch break. I couldn’t do that when in the office since I cannot shower and I’d be too self-conscious to be seen sweaty with my running gear on by coworkers. It’s a really awesome break in my day now. For sure I’m gonna miss that when/if we’re back. Maybe I’ll just retire lol.
I don’t know what you mean by “not as easy to raise and lower.”
$2K? That’s crazy talk. I slapped a 47"x35" desk top from an IKEA Jerker desk (with an extra shelf ~$120 on craigslist) onto dual-motor legs with memory and a 5-yr warranty for $350 from Autonomous.ai. They have lots of other options and nice, customizable desk tops, you can do a custom image (probably not solid wood), but I’ve seen custom cuts from solid wood on their website before for about $1K all-in IIRC. I can’t find the solid wood ones right now.
BTW, if anyone plans to buy from them for the first time and wants to save a few bucks, they have a referral program (click to see the $ saved). I can PM a link, we both get $ off next (not first) purchase. Their monitor arm is the best I found for the price at the time ($50), but now it’s $99.