Big financial change coming for us

[disneysteve]

My wife gave notice at her job last week. She hasn't been happy there for a while and it has really been stressing her out to stay there so we agreed it was time to go.

The loss of her income won't have a major effect on our day to day spending though it will squeeze things a bit. She works part-time and her take home pay averages about $350-400/month. We spend that much or more eating out every month so by cutting back on restaurants and shopping a little more carefully, we can probably make up most of that. Plus, those who follow my blog know that I'm always striving to stay on track with the medical surveys I do and this is just the kick in the butt I needed to make sure I keep up with those. I should easily be able to pick up an extra $200/month on average if I do that. So the end result is we should be able to replace her take home pay pretty easily.

The hard part is what we don't see. Fifty percent of her income was going into her 401k, about $500/month. Making that up is going to be tough until whenever she goes back to work. She was primarily working to fund our retirement more than anything else.

She is in the very beginning stages of starting an at-home craft business. She's made 3 sales so far which is nice because those happened without her even trying - just showing some others what she's made and having them ask her to make stuff for them, but it shows that there is potential. We're planning on renting a spot at a community flea market in June and she will sell some of her stuff there, along with various other items we have to sell. We'll see how that goes.

So that's my excitement for the week.

[bjl584]

Sounds like everything will be fine for you guys.

Your wife was lucky to have a part time job that offered a 401K. Most part time positions don't qualify for a 401K or other benefits.

[phantom]

It's always great to be able to walk away from a stressful job. Congratulations to both of you on being in a place where your wife could do it. I wish her success with that craft business, or on whatever else she might choose should that not work out.

[mrpaseo]

She was primarily working to fund our retirement more than anything else.

This is where we are at, at one point we were putting 75% of her pay into her 401k, currently we put 26% with a 4% match.

Best

[disneysteve]

This is where we are at, at one point we were putting 75% of her pay into her 401k, currently we put 26% with a 4% match.

Best

When she took the job, we filled out the 401k enrollment paperwork and put down 100% to go to the plan but they called and said that wasn't allowed. 50% was the limit so we did 50%.

[Gailete]

I know the wonderful relief of walking out of a stressful job. If she is a good cook, home cooking might just taste better than going out anyway.

Having her own business will actually open up retirement savings ability that you might not have thought of as well. Be sure she is meticulous with keeping track of expenses, mileage, etc. so you get full deductions next tax round. Ecrater.com offers free stores to sell on that she might want to look into as well.

[rennigade]

Well the benefit of her not working will be the house cleaning should be done and you should be able to cut back on going out to eat since she will have a lot of time to cook. That alone will make help balance out what she was bringing home.

[disneysteve]

Well the benefit of her not working will be the house cleaning should be done and you should be able to cut back on going out to eat since she will have a lot of time to cook. That alone will make help balance out what she was bringing home.

Definitely. She'll also be able to do more comparison shopping and take advantage of sales rather than us doing one-stop shopping for convenience. As I said, making up the take home pay won't be all that hard. We can't make up the other piece though. Her total income was about $1,000/month. Eating out less and shopping better will save money but not that much money.

[scfr]

Other than the craft business, is she looking for another job, possibly work-from-home?

[disneysteve]

Other than the craft business, is she looking for another job, possibly work-from-home?

Not at the moment. What she'll probably do is stay home for the summer and look for something in the fall. In the meantime, she'll work on getting the craft business going. We were looking to rent space at a community flea market next month but I called yesterday and they were full but we'll find somewhere else. There are dozens of flea markets and church bazaars and craft sales in our area. So she'll use her time to make stock so that when we do find a place to sell in person, she'll be set.

I'm perfectly fine with her staying home. She was a SAHM for 10 years and has only been part time (3 days/week) for the past 6 years. She has never been career-oriented, which I'm perfectly fine with. If the craft thing gets going and brings in some steady money, she may not go back to a formal "job" at all.

[Like2Plan]

This sounds like a pretty exciting move for your DW. As a self employed business owner, she can plow some of her profits into a SEP retirement account or an individual 401K--so maybe she will achieve the same retirement goals without all the stress? I wish her the best of luck.

[disneysteve]

This sounds like a pretty exciting move for your DW. As a self employed business owner, she can plow some of her profits into a SEP retirement account or an individual 401K--so maybe she will achieve the same retirement goals without all the stress? I wish her the best of luck.

Thanks. Right now, the start up phase of things is actually costing us money, but that's pretty typical. What she really needs is a new sewing machine as her current one isn't nearly adequate for what she is doing now, so we are going to need to invest in that for this to work.

[Gailete]

What she really needs is a new sewing machine as her current one isn't nearly adequate for what she is doing now, so we are going to need to invest in that for this to work.

Not sure what she is needing or looking for in the way of a machine, but be sure if you are buying one new with a warranty that using it for business purposes won't void the warranty. It depends on manufacturer. Currently there are many amazing workhorse machines out there for purchase.

[ua_guy]

There is absolutely something to be said for being able to walk from a stressful job.

Isn't the better financial advice, though, considering the sum of money she was putting towards retirement and contributing to household expenses, to just find another job? Maybe I missed that part. I was always told there's no sense in leaving a job, no matter how stressful, if you can tread water and keep things afloat there until you find something new or get your business off the ground. Maybe that's advice meant for people who are broke without a job, though.

It sounds like you guys have your finances squared away anyway, and it doesn't sound like it's a big concern, either way.

Best of luck to her in her craft business..sounds like a fun adventure!

[disneysteve]

I was always told there's no sense in leaving a job, no matter how stressful, if you can tread water and keep things afloat there until you find something new or get your business off the ground. Maybe that's advice meant for people who are broke without a job, though.

We don't believe in that advice.

I left my last job with nothing to go to. The situation had reached a point where I was no longer willing to work under those conditions and it was time to leave. I ended up being out of work for about 3 months before a job found me (I honestly didn't go looking). That was over 13 years ago and I've been at the "new" job ever since and far happier.

Certainly, if we were dependent on her income to make ends meet, the plan would have been different. Fortunately, that isn't the case. We can afford to have her settle down and get her head together and then figure out where to go from there.

Just another good reason to maintain your emergency fund and live below your means. Having money gives you flexibility.