Working costs too much - Page 2

[mnnice]

Originally Posted by Phantaja

I didn't earn much money last year; less than 10 thousand. But because we were on the cusp of another tax bracket, the pennies that I worked for bumped us into the higher tax bracket. Once those taxes were paid, and you factor in gas, lunches at work, after school care, etc, my working costs us money. BUT...there are sometimes mid week when we really need a couple hundred dollars and my pay check is right on time.

Given the circumstances, would you quit your job?

You figure after you pay $3000 in daycare, $1000 more in federal taxes, $620 in social security taxes and another $500 in MI taxes (the state tax is totally guess on my point). I see about $4900 of money that you clear. I'm assuming your income bumps you from the 15% to 25% bracket.

Do you spend more than $100 per week on extras (coffee, work clothes,fuel, extra wear and tear on your car) than I think you are probabily going backward?

[Maddy123]

I quit my job when it was clearly in our financial interest for me to keep it! So I'm probably the wrong person to ask. I have never regretted it, but I had a burning desire to quit. I was not the least bit on the fence about the decision. My life greatly improved when I left, and I have really enjoyed not working full time.

I later put together some part time gigs around my kids' school hours, so I do bring in some income. But nothing like what I used to earn, and I don't get retirement benefits, etc. anymore via my job.

It really depends on many factors, including whether you enjoy working and what other present or future benefits you may get from keeping your job.

[weliveintheforest]

Originally Posted by ZanneMom

Since it sounds like you're living paycheck to paycheck, I'd take a hard look at your budget and try to cut out any necessary expenses, and quit once you have a saving safety cushion. Paying to work is just plain wrong.

I agree with this... once you are staying home and do not have the extra expenses from working, your cheque might not be so needed.

[Leta]

Originally Posted by Phantaja

lol. I could almost see myself walking into my supervisors office, handing her a copy of our 1040, shaking my head sadly, and walking back out.

[Leta]

Originally Posted by ChetMC

Yes, I would quit. Once you're home you have more time to put toward budgeting and saving money. I never pay retail for anything. I have time to research every purchase to death. There's more time to plan meals, to figure out complex coupon schemes, to go to more than one grocery store, to check 18 websites and find the one with the lowest price, to go to the outlet mall on Saturday, etc.

Yep.

We are right at that place where it would cost us for me to work. I'd have to make at least $40k per year for it to be worthwhile, if I was working full time. And if I go to work part time, we would lose the EITC and WIC, which would mean that the first $5200 I made that year would net us *zero*. And that calculation is assuming no work expenses whatsoever. So that hypothetical part time job? I'd have to make about $15/hr to net anything at all, and part-time jobs making that are all but nonexistant here.

DH makes about $32k per year. He has excellent job security and very good health and fringe bennies (he's a gov't employee, too), and we live in an area with a very low COL. We do alright.

OTOH, if I were to go to work FT, even if I made more than DH, we'd be paying for childcare for an infant and a toddler on top of our $5200 per year loss. DH can't turn down overtime (weird union rules- he has the right to turn down OT, but there is no one else qualified to do his job, so sooner or later, he's got to do the OT), which means trouble for daycare- late fees and so forth- and he's the one who would pick up the kids. Plus we'd have to get more reliable vehicles- two, because, right now, if I have to go without a car, it's no big deal, but that would not be the case if I went to work.

So... starting off $5200 in the hole, at least $10k in childcare, and two car payments with increased insurance costs... not to mention about $7k in additional state and federal taxes... and whatever other work expenses I had (I'm a sucker for fancy coffee, too)... we're looking at a minimum of about $20k. If I got a job making what DH makes, that leaves me with $12k per year, or netting less than minimum wage. And my work expenses could *easily* go higher than $20k, depending on the price of gas, my commute, professional clothes/cleaning, etc.

We even had SIL, an accountant, run the numbers for us, and she was like, "Yeah, don't bother working."

The big question is quality of life. DH doesn't have to do hooey cleaning, so I have to do very little on the maintenence front. I volunteer. I've been helping my neighbor out- her mom is dying, and she's the caregiver. Our lives are more relaxed, and I believe, joyful, because we don't do the two income-daycare-pickup dinner hustle.

I miss adults. I wish I knew more people here. I get lonely and sometimes bored. But I'm confident that this is the right thing, at least for now.

[ChetMC]

Originally Posted by Leta

I miss adults. I wish I knew more people here. I get lonely and sometimes bored. But I'm confident that this is the right thing, at least for now.

I know how you feel. I spend way too much time on mothering, mainly for the adult conversation.

[SuzyLee]

I think a lot of people are misunderstanding tax brackets. It works like this: (I made up these nhumbers they aren't real)

First 25,000 you earn: taxed at 15%
Next 10,000 taxed at 25%
Next 10,000 taxed at 35%
etc.

So you working did NOT bump yourfamily's entire income up a bracket. Just the extra you earned was taxed at a higher rate.

For more info on this google tax brackets, the first hit explains it pretty well.

So based on that, if you are pay check to paycheck, no I would not quit.

[Leta]

Yes, but...

If you are just under the ability to pay no taxes, or even get money back in the form of the EITC, these numbers are not as straightforward. You can bump yourself up from no taxes to enough taxes to make it pointless to work.

Sorry if I'm not explaining this very well... SIL explained it to me, but she is professional. I am barely even an amature.

[slsurface]

I'm really confused by everyone's math and why everyone thinks they loose money by working?

Even though my gross income was only $22K last year, I was still able to SAVE approximately $12K. I did have $8K in childcare expenses, plus taxes. But I also had money to put towards home remodeling projects that we wouldn't have had otherwise. The only thing that *cost* me was childcare and taxes. Yes, I paid more in taxes this year, but I also made considerably more. I didn't loose anything by working and I still managed to save over half my income.

This isn't meant to be snarky...am I just missing something? Maybe it has to do with loosing WIC and other programs...

[Leta]

I don't think I would *neccesarily* lose money by working, so maybe this doesn't apply to me, but I don't think I would make enough to make working worthwhile.

We would lose the EITC and WIC. Together, that's over $5000 per year. Then I'd have to pay for childcare. So the first $15,000 I made would just bring us up to zero. That's not worth it to us, unless I could make $15,000 in, y'know, a couple of months. Which I couldn't- it would take more like 5 or 6 months for me to make $15,000.

Then we would have the regular costs associated with earning income- the taxes on that income, the transportation to get to work (car, maintenence, gas, insurance), as well as the possibility of lunches out and more costly clothes and grooming.

So it would be very possible for me to go to work and *just break even*. Not truly losing money, but working for no reason.

[bobandjess99]

It's hard...i know a lot of peopel in that situation..where working onyl gets them like a couple hundred a month after all their costs are paid, but they HAVE to have thet coupld hundred, so they work allmonth to net a few hours worth of pay..it's awful.

Would you be happier staying home, or get bored/unhappy?


I work because we here at casa de bobandjess have become accustomed to eating on a regular basis. however, even if that were not the case, I would need to work anyway, or else I'd kill my kids. Really..I'm not cut out to be at home all day.
Plus, my work hours are almost more valuable NOt because of the salary I am paid to work, but because that hour can NOT be spent SPENDING money...lol! I go shopping when I'm at home.

So..you have to figure in ALL the money stuff, plus all the other stuff..and make a decision....

[ChetMC]

The Problem

I think the problem is that when you make very little you pay no tax AND you are eligible for support programs. But, when you start to make more and cross into the next tax bracket, you aren't necessarily farther ahead because you're taxed on the extra money that puts you into the next tax bracket, you start losing eligibility for certain social programs, benefits and subsidies, and you may eat up tax credits that you used to transfer to your higher earning partner.

[lanamommyphd07]

I'd totally quit the job if anything just to get a different one that would be during school hours to eliminate the after school care. What would you make if you only worked the 6 hours a week the kids are in care? If it's less than 60, then you know you're paying to work--at least part of the day.
I made more than 10,000 a year as a grad student with free tuition. I think it's worth looking into

[Logan's Mom]

If money is that tight, wouldn't it be worthwhile to pack lunches and bring a mug a coffee from home? That is what I do. I do allow myself 2 coffees a week. That is about $5 a week, $20 a month, $240 a year -- still a sizeable some for something I could make at home for like .25 a cup.

[Fuamami]

Could you ask for a raise?

[lmonter]

For some reason I thought the secondary earner was taxed slightly higher than the primary breadwinner - a throwback to the 60's when the majority of households only had one worker. But I don't read IRS documents for the fun of it, so I very well could be wrong.

When I went back to work for a few months after my oldest was born, I was bringing home barely $200/month (after having to buy post-partum work clothes, lots of gas for the car, higher car insurance, daycare, doctor visits because of daycare ickies and unpaid sick days since I had to use those right after giving birth rather than saving them, eating out because we were both exhausted by 7pm, blah blah blah) and having the privilege of seeing my 3.5-5mo ten (10!) hours a week since I had 45-hour work weeks plus the 2+ hour commute each day. So it was a pretty easy decision for us, and so began my frugal slippery slope of finding ways to trim costs, starting with cloth diapers. I figured I could find a way to make up that measly $200/month and my baby would actually know who I was.

Kind of reminds me of when my sister and I were in school... You know those reduced-lunches they do for lower income families? We were $60 above the cutoff for a family of four, and my parents had to cough up full-price lunch tickets for my sister and I for years - probably to the tune of $400/year back then, easily. If we'd had a mortgage or rent, well, I bet our family wouldn't have eaten much at all or even had vehicles (my mom was a librarian and the *only* breadwinner of the family).

[PenelopeJune]

I'd quit. Surely you can find a way to trim your budget, once you are at home, so that few hundred a month you are making isn't needed.

I know that I couldn't work. For one, we only have one car, so I'd either have to find a job close enough to walk to (probably impossible in this town, it's very small, and there is no public transportation) or buy another car. We'd have to have daycare, I'd need new clothes if it were at all a professional job beyond fast food, plus extra gas and insurance, etc. Oh, and I'm a high school graduate with no educated skills, so whatever $8 an hour job I could find wouldn't cut it. And it sucks, because we could really use the extra money.

[Phantaja]

Originally Posted by Leta

I miss adults. I wish I knew more people here. I get lonely and sometimes bored...

That has nothing to do with staying home. It's because you're a Yooper. Come on over to the darkside and hang out with us Trolls.

[Leta]

Aaah! Phantaja, that's not even fair. I'm originally from SE MI. All the people I miss are there near you.

I haven't quite found a place to fit in to the culture here. I wear my "Made in Detroit" tshirt all the time, and people just end look at me like they are... confused. Or something.

There's some other stuff I miss, too. The DIA, the Natural History Museum, and going to concerts, especially at the Fox and Meadowbrook and Pine Knob. (Sorry, but "DTE Energy Music Theatre" just doesn't cut it. Pine Knob wasn't a great name, but a sight better than "DTE EMT".)

However, I do not miss traffic. Or Metro Airport. (Our airport, Sawyer, is the size of a small Detroit preschool, and easier to park, too.) Or Detroit politics.

And I like the trees and the mountains and the waterfalls here. Our winters are prettier. And Mother Superior is way cooler than the Detroit River. (Sorry, but it's true.)

Augh. Anyway, this was all sooo OT, but if you are ever coming up this way, PM me. We should hang out.