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A year after losing her high-paying job, this man’s wife is pursuing a lower-paying career a year later. He wants to be supportive but can’t help worrying about their finances. Let’s break their dilemma down.
Unforeseen Transition
The original poster (OP), Max, has been supporting his unemployed wife, Lala, for nearly a year since she left her previous job ($130K salary, 4% 401K match, healthcare, etc.).
Supporting Unemployment and Exploring Ideas
When Lala became unemployed, she and Max agreed she’d use the time to work on her mental and physical well-being. Fortunately, the couple had a decent savings nest egg, so Lala was able to avoid the pressure of finding a job immediately.
A Change in Direction
Max imagined Lala would eventually return to her previous career as she’d invested a lot of time getting her doctorate. However, Lala has found a new hobby she’s passionate about—that pays $200–$300 a week.
Financial Doubts and Optimism
Lala is optimistic that she can grow her passion into a fruitful business, but Max has doubts. Max is paying most of their expenses and has had to dip into his savings to cover additional costs.
Dipping Into Savings
The cash Max and Lala planned on using to renovate their house, travel, and potentially buy a new home is going toward other expenses.
Examining Income and Expenses
Max’s take-home income is $8600/month, including maxing out his 401K and health savings accounts. Lala is bringing home $800/month.
Future Plans Interrupted
Lala has $320,000 in her retirement account, and Max has $410,000. Combined, the couple also has $410,000 in their savings account.
Household Budget Breakdown
Additionally, they have $45,000 in a 529 savings account for one of their kids and $15,000 for the other. Now, it is time to break down their expenses.
A Glimpse Into Monthly Expenses
Max’s 30-year mortgage is roughly $4000 per month, with a 2.875% interest rate, including interest and insurance taxes.
Strained Savings
Their monthly car loan expenses are $900, with one year remaining. Additionally, they pay $1500 per month for one of their children’s daycare.
Balancing Current Lifestyle
Other monthly expenses include utilities ($700), car insurance ($160), and additional miscellaneous expenses ($2300). Max’s payments total roughly $9500 in monthly fees.
Managing Debt and Savings
At their current rate, assuming Lala contributes everything she earns toward monthly expenses, the couple won’t save any money and will have to dip into their savings for $100+ each month.
Seeking Solutions
Because they aren’t saving money, Max worries about what they’ll do next. While they’re not accumulating much debt, they’re also not saving for their future.
Communicate Your Lifestyle Needs
“You should talk to your wife about what lifestyle you want. It sounds like you are on different pages. She seems to be looking at a slower, lower key. You have specific financial goals that you want to hit.”
Trim Miscellaneous Expenses
“$2300 for gym/groceries and Netflix [is] way [too] high. Get planet fitness or the equivalent for about $10 a month and Stop eating out…”
Save On Babysitting Costs
“What kind of business did your wife start? Can she watch the baby part/full time?”
Exploring Strategies to Secure Financial Stability
Max is still unsure whether Lala’s career will take off or how long they can sustain their current spending habits. Max should find an extra source of income or speak with Lala about potentially switching career paths.
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