A Dilemma of Good Fortune
I have recently been offered a job at a company I greatly admire, but I am having a difficult time deciding whether I can accept the position. The main sticking point is that, although the overall salary is slightly better, the monthly pay is considerably less than what I earn now. (The difference is made up in bonuses, which I don’t get at my current job, but are pretty generous at the prospective one.) This sharp difference in monthly pay, however, would probably create a significant cash-flow problem.
The situation reminds me of my college years, when I couldn’t afford to take unpaid internships because I had to support myself and pay my way through school while working for the experience I would need to land a job in my field. Ultimately, my financial needs forced me to turn away some very good opportunities in favor of paid internships in areas not directly related to my career goals. Those were tough decisions to make, but in the end my financial needs left me with no choice, which is precisely what I am worried about in this situation: Can I afford to accept a job that pays “less” (even though the estimated annual pay is somewhat better) in light of my current financial needs?
To shed some light on the question, I have made a list of the pros and cons of accepting this position, along with some circumstantial information that has a large bearing on my considerations.
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Pros
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- Desirable position
- Good career move
- Nice benefits
- Saner working environment (presumably)
- Longer contract, more stability
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Cons
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- Lower monthly pay!
- Longer commute
- Could destabilize short-term financial planning
- Would require much more financial discipline
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Considerations
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- New child coming soon
- Student loan repayment plans leave no financial cushion
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Go for it!
The position itself excites me, I know I can do the job well, and the company offering it is a major player in its market, so I’m strongly motivated to go for it. If nothing else, the work environment will be significantly better (that much I can tell just from the interview, which was far better organized than the interview that landed me my current job).
On the other hand...
As much as I want to accept this job, I can’t help but feel that it could lead to a financial train wreck—at least in the short term. One of the reasons is that I have recently made arrangements to pay off all of my remaining student loans in one large payment. Although this will free me of the burden of making monthly loan payments (which is very good), it will completely wipe out my savings, leaving me with no financial cushion to rely on when switching jobs (which is not so good). When you combine the absence of a comfortable cushion with the fact that my wife and I are expecting our second child to be born in November, it creates a very strong sense of trepidation.
At this point, I’m still undecided about whether to accept the position. My heart and my ambition are urging me to grab this job and make the best of it, but my head and my sense of family obligations are advising caution.
Suggestions and advice are most welcome.
Would it be possible to renegotiate terms, and have them remove the bonuses, and offer you a monthly salary instead? Maybe not, but consulting with them and telling them that you really want to accept the position, but it would be a monthly pay cut for you, may swing things more to the pro side. Who knows though, I took a new job at the beginning of this year, but the boss is an “$%hole!
Do you have any family resources to fall back upon? Anyone in the family who would be willing to front a certain amount of money to get you past whatever lean times may present themselves? After all, with the bonuses assured in coming, there would be little or no possibility of paying back being a problem. And whatever difficulty there might be asking family for such a thing, it seems to me to be easily offset by the benefits. \r
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The saner working environment is a huge thing, at least for me--I have a good situation in the area now, and it has made a world of difference for me--just in the stress levels being lower alone, for example.\r
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The career advancement is good as well, but the stability should be a big plus for the family planning area, especially if you’re thinking of investing in a home or something of that sort.\r
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As for the cons, it seems like three of the points are the same thing, really: finances.\r
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In the end, doing it without a safety net could be problematic, but at the very worst, it seems like a close call.\r
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Hey, what about a bank loan or cash forward? If you can demonstrate a bonus coming, maybe the bank would be willing to do something… might be worth looking into.\r
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Also, is there any way to back out of the student loan payoff? Sure, monthly payments are a drag, but if that could free up a financial buffer...\r
UltraBob:\r
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Would it be possible to renegotiate terms, and have them remove the bonuses, and offer you a monthly salary instead?\r
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I am hoping that such an arrangement can be made. If so, I’ll almost certainly take the job.\r
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I took a new job at the beginning of this year, but the boss is an “$%hole!\r
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Interesting point. One thing I do like about my current job is the people I work with. I’ve been fortunate not to run into too many $%holes around here. All things considered, though, I doubt I would run into any at the new company, either. Actually, I was really impressed by how nice the interviewers were.
Just a quick note to any who may think I am calling someone names behind their back; I started my own company, Akatombo Media at the beginning of this year. The $%hole in question is me.
Luis:\r
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Do you have any family resources to fall back upon?\r
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Funny you should mention it! Actually, my student loan repayment plans borrow heavily from my wife’s savings and completely consume my own. Outside of my marriage, no, there are no other relatives who are likely to help in this area. That, however, is the subject of an entry of its own...\r
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The saner working environment is a huge thing...\r
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Tell me about it! The prospect is very compelling.\r
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As for the cons, it seems like three of the points are the same thing, really: finances.\r
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Yes, well, that is the only significant con--but it’s a BIG one, so it gets three points. [grin]\r
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Hey, what about a bank loan or cash forward?\r
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Ick! The whole idea of paying off my student loans was to get out of debt! A bank loan would be even worse, in terms of the interest rate involved.\r
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[I]s there any way to back out of the student loan payoff?\r
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Well, sure, but the idea was to get rid of my debt, which would only become an even greater burden if my monthly income were reduced. Also, if I stay in my current job, the loan payments I would save would be the financial buffer--but if I took the new job, it would merely offset the reduced income.
Getting rid of the student loans is a great idea. I was so glad when I got rid of mine!
Getting rid of the student loans is a great idea.\r
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Agreed. A heavy load of student debt practically makes you into an indentured servant (because you can never afford to quit your job--or start a business of your own, etc.).\r
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Anyway, I just got off the phone with the human resources person at the company that is offering the job. It doesn’t seem likely that they will be able to alter the monthly salary, which is unfortunate, but she promises to look into it...\r
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...leaving me waiting with bated breath, of course. [wink]
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