Financial Reference

Brian is working on another project today, so I’ll be writing in his place. I’m been his wife for six months, but his financial partner for almost two years.

Brian has recently accepted a job teaching high school math at a public school. Though he has no formal training in education, he can take this position since he has enrolled in an accreditation program.

Needless to say, I had some strong feelings about him taking this position. And it wasn’t all about the money.

The pay, when we add up all the changes, is actually not that much different that what he was making part time. We’ll be saving $1800 year in health insurance premiums, he’ll have the summers off, which cuts out $3000 in daycare expenses and he’ll have time to start his own business, which, hopefully, we’ll lead to a lot more income in the future.

It’s going to give him a lot more time. He’ll have the summers to spend with our son; he’ll have a shorter workday so he’ll have more time in the mornings and afternoon. He has a shorter commute.

All in all, he’s going to come out way ahead in the deal.

It’s taken me a lot longer to accept that as a family, we should come out ahead too.

I was hung up, not on the paycut, but on the lack of potential future earning. Teachers in the public school system are paid based on a grid – there’s no additional raises or bonuses available. He also is giving bonus that would have come in March, some ESPP options that would have come at the end of the year, and a raise that would have taken affect in January.

It’s not an insignificant amount when you add it all up.

But it’s that age old question, “what is time worth?” How much is happiness worth? If this is the right fit for him, how much money should it take to keep him from it? Should any amount of money keep him from it? How much should my opinion and money issues be taken into account?

In the end, he promises me that we wouldn’t have to worry about money, that I would still have the flexibility to keep my job options open and that this is truly what he wants to do with his life.

Maybe I am jealous that he’s escaping the cubical culture. Maybe I want to have summers and spring break. Maybe I want the larger paychecks and bonus potential.

But I’m willing to give up some of my financial insecurities and love of a large balance in our checking account, happiness is worth a lot.

Sorry for the very long delay in posting. Life got the better of me. Nothing serious, just busy.

During my “sabbatical,” I found some funny examples of personal finance gone bad.

The first example is from a show on HGTV called Dream House. (Here’s a link to the official site and a link to the more informative Rocky Mountain News coverage of the show.) The idea of the show is to show a couple’s adventure toward building their “dream house.” It’s a very simple concept but as you may imagine, the execution rarely goes as smoothly as the couple’s original plans. This season is no exception.

The couple inherited a nice plot of heavily-sloped land in Colorado. They started building before knowing how deep the bedrock was, naively assumed that everything would go as planned, and assumed they would only have a $300-350K mortgage. As happens all too often today, they stretched their budget to afford such a large mortgage.

Then the inevitable happened: the cost projections were flawed, the bedrock was too deep (so it would be more costly to build the foundation), and they got pregnant. They were faced with a house they couldn’t afford, temporarily reduced income (as she was the primary breadwinner), and a large increase in expenses.

What to do when faced with a project you can’t afford? Of course, take on more debt. They mortgaged the land and took out a $500K construction loan! By their own admission, they need his start-up (oh yeah, I forgot to mention, his income comes from a start-up) to take off to afford the new payments.

Good luck! I hope all the stress is worth it.

And the other story: a 39-yr old man bought a virtual space station for $100K. He financed it by taking out a second mortgage on his house. Wow! (On the positive side, a 30-something buying a virtual property is not living in his parent’s basement.)