Seeking Advice - Job Change, Move, House, Kids

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dcw213
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Seeking Advice - Job Change, Move, House, Kids

Post by dcw213 » Sun Jan 19, 2014 12:21 pm

Another thread with substantial discussion about factors impacting ability to grow net worth led me to post this seeking some advice from some more experienced folks on my situation. In short, I have many substantial life changes on the horizon in the next 1-2 years, and I am growing increasingly concerned that the changes will have a bigger impact on me and my wife than I initially thought. A bit of background on my situation:

My wife and I will both be turning 30 this year. Since we graduated college, we have both worked hard and lived very frugally. We were able to knock out our student loans quickly (with some help from her employer!), rent an apartment that is cheap for the city we live in, have avoided a car despite some inconvenience, and have both been fortunate enough to move up pretty quickly in our respective careers. At this point, we both earn low-mid 6 figure salaries and are considered high performers at our jobs, with potential to advance further. Other than a few furniture upgrades after we got married 2 years ago, we have not allowed lifestyle inflation to set in, and continue to basically live like college students despite a combined income of ~$250K. Our housing costs are only 9% of our gross income at the moment. The last 2 years have been great, as we have been able to save around $8K per month. Due to our aggressive savings and minimal expenses tied to our frugal lifestyle, we are lucky enough to have built a net worth of ~$550K (about $330 in retirement accounts, $220 taxable/liquid accounts which includes liquid "cash" for emergency fund and down payment on possible home).

Sounds great right? Well, we have been talking lately and have decided that as we enter our 30s, we would like to try to start a family. We both agreed that if and when that happens, we would prefer to relocate to be near her family (we live in DC now and have no family around, the idea would be to move to Chicago suburbs where all of hers is). Everyone talks about the better cost of living in Chicago - while it is certainly true that we would be able to buy a single-family home for a lot cheaper than DC metro area, I am accustomed to renting a small apartment, having no car, and minimal insurance costs. The idea of a mortgage, home maintenance costs, auto/umbrella/homeowners insurance, and even gas has started to stress me out. I know these are all expenses that most people have to deal with, but I have been completely immune from them in my current lifestyle. Clearly, having a baby would be life changing and would impact the budget greatly - I know this will be overwhelming but I am more willing to accept the reality of that change than some of the other costs of living (given I have avoided them to date). Our strategy up until this week was to stay in DC and continue to save aggressively, try to start a family in about a year, and move after the potential baby is born (allowing my wife to take 4 months maternity leave).

This brings me to my main dilemma - knowing that a move was possible, I had started to float the idea out to some key people in my network, trying to think about what I would do for work. Much to my surprise, a job opportunity came up lightning fast and I have a phone interview scheduled for this week. This was not the plan, but a part of me feels that moving to a new city and starting a new job and finding a place to live immediately post-baby would be too overwhelming, and that being there for a while first might facilitate the transition. The main downside to this is that we would likely face more expenses and not be able to save at the high rate we currently are. Also, while my career is more transferable, my wife's is unfortunately not. She would likely have a tougher time finding something, and would certainly have to take a pay cut (possibly a large one as she currently makes $110K). This opportunity seems like a decent one for me, but our combined income would likely be lower and would need to buy a car, get insurance, and possibly buy a house.

Apologies for all the detail, but I thought it was necessary to frame up some of my questions. With this background in mind, here are questions that I was hoping the boglehead community could weigh in on - particularly those that have been through similar events.


Questions

1) Does it make sense to relocate now with this transition opportunity, or try to keep our current lifestyle and savings rate going for another 1.5-2 years (hopefully allowing our net worth to pass $700K by the time the baby is born).

2) On the same note, do you think it is wiser to be settled into the new jobs and new city before the baby? Would it be a bad idea to execute all these changes with a 4 month old in the picture?

3) Am I overreacting to the higher costs? To me, it seems overwhelming but I know people deal with these expenses all the time and are still able to save. Do I just have to accept the fact that I will have to start saving less at some point and try to not let it bother me?

4) In addition to earning a nice salary, my wife is currently on a pension track. She has already vested and will get a small pension already, but the idea of her walking away from it is discouraging. Are our salaries, careers, and pension enough to be a factor to consider not relocating or should we be thinking "family first". The thought of raising kids with no family around is depressing to us, hence the desire to relocate (I know this is a personal preference, looking for any opinions).

Thank you for taking the time to read this. I normally would not ask such broad questions in this forum, but it has been taking up a lot of my thoughts lately, and this interview has really kicked the issue into high gear. Any opinions or reflections would be greatly appreciated. Thank you.

livesoft
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by livesoft » Sun Jan 19, 2014 12:36 pm

If I were you, I'd ask my spouse what she thinks about all this first. :)
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zebrafish
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by zebrafish » Sun Jan 19, 2014 12:37 pm

1. Difficult to make a decision about a job where you haven't even interviewed; if it is a really good opportunity, I might take it. If your goal is to get to the midwest, this might be a great opportunity. Get all the information, then make a decision.

2. Kids do more than decrease your savings rate-- it is total freakin' chaos! I think everyone freaks out a little before having their first child. Change is always stressful. Your current savings rate sounds ridiculous (in a good way), but you don't live to save (you should save to live) and you can afford to have children. I wouldn't trade my kids in for any amount of money or savings.

3. This advice totally depends on your family and what they're like-- my spouse and I moved to be near my in-laws about 8 years ago, and it was the best decision ever for us and our kids. My kids have grown up with fantastic grandparents around. They come every Saturday and help look after the kids so we can get errands done, etc. A price cannot be put on this. Making this move really changed my career trajectory (didn't know it would at the time), but in retrospect it has all worked out for us.

Rather than being anxious, try to focus on the great opportunities and adventures that you are about to embark on! Will it be financially perfect? No. Will it be worth it? Yes.

dcw213
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by dcw213 » Sun Jan 19, 2014 12:40 pm

livesoft wrote:If I were you, I'd ask my spouse what she thinks about all this first. :)
Haha touche! We have been discussing it quite a bit. Basically, both of us want to be there but are feeling hesitant to pull the trigger and want to delay as long as we can. It's safe to say that we are both wavering a bit.

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zebrafish
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by zebrafish » Sun Jan 19, 2014 12:42 pm

I can also say that, depending on your line of work, it can be difficult to find the "perfect" job for two people moving to the same city at the same time.

Are you freaking out too much about the expense side of it? Yes.

Can you execute a long-distance move with an infant? Yes. Is it more painful to do so. Yes. Infants immediately create 1000x their weight in plastic toys/contraptions/etc. They also require virtual constant attention by one parent, which makes it hard for both of you to be productive. (My wife and I moved across the country with an infant. We are still alive. However, it would have been much easier pre-children...).

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by tibbitts » Sun Jan 19, 2014 1:00 pm

My impression is that the savings are too important to you, and that you have more desire to save than to have biological children. Consider non-biological children: they come with some expenses paid, and fewer years of high maintenance required. No need for grandparents close by. That might be the correct solution for you.

dcw213
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by dcw213 » Sun Jan 19, 2014 1:02 pm

zebrafish wrote:I can also say that, depending on your line of work, it can be difficult to find the "perfect" job for two people moving to the same city at the same time.

Are you freaking out too much about the expense side of it? Yes.

Can you execute a long-distance move with an infant? Yes. Is it more painful to do so. Yes. Infants immediately create 1000x their weight in plastic toys/contraptions/etc. They also require virtual constant attention by one parent, which makes it hard for both of you to be productive. (My wife and I moved across the country with an infant. We are still alive. However, it would have been much easier pre-children...).

Thanks so much for your insight Zebrafish, this is exactly the type of thing I was hoping to get out of this post. I think what it boils down to is the question of now vs. later, as we are set it will happen. We had always thought that having family around to help out etc will have an invaluable impact in easing the burden on us and maintaining our sanity - it is good to hear that you saw significant value making a similar move. Thank you again.

dcw213
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by dcw213 » Sun Jan 19, 2014 1:05 pm

tibbitts wrote:My impression is that the savings are too important to you, and that you have more desire to save than to have biological children. Consider non-biological children: they come with some expenses paid, and fewer years of high maintenance required. No need for grandparents close by. That might be the correct solution for you.
Understand how you might draw this conclusion, but this is not the case at all. In no way did I imply that the costs of having children were keeping me up - primarily the costs of housing, car, insurance (which would be required if we move regardless). Keep in mind, these are all things I am willing to live with, just thinking a lot about it lately. My main issue comes down to relocate now (pre-baby) vs. immediately after baby. Or said another way, be already in the new routine when the baby comes vs. adjusting post baby in order to keep our good jobs going another 2 years.

livesoft
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by livesoft » Sun Jan 19, 2014 1:06 pm

We (dual income) moved from a high COLA to a low COLA based on an out-of-the-blue job offer I received. We already had a toddler at the time. The move was absolutely trivial except for the usual mover snafus. Even so, it was not painful at all. It was more like going on vacation.

At first my spouse (professional engineer) did not look for a job, but instead networked and shopped for a house to buy while we lived in an apartment. After we bought a house, then she looked for a job and has been working again ever since.

As for kids, I think too many people overreact to their cost. Clearly, they don't have to be that costly since lots of low income people have children. Anyways, we have found them to be inexpensive if you don't count college. Of course, if you believe the hype about their cost, then you will match your spending to that hype. If you believe they are cheap, then there is a chance that you will match your lack of spending on them to that, too. I have often commented on how inexpensive our kids have been and yours can be, too.
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zebrafish
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by zebrafish » Sun Jan 19, 2014 1:19 pm

livesoft wrote:We (dual income) moved from a high COLA to a low COLA based on an out-of-the-blue job offer I received. We already had a toddler at the time. The move was absolutely trivial except for the usual mover snafus. Even so, it was not painful at all. It was more like going on vacation.
If you have professional movers do 100% of move, I agree with this. For us, we needed to organize, throw away a lot of stuff, and do some of the packing prior to professional movers. It would have been easier pre-kid for us. It was still do-able.
livesoft wrote:As for kids, I think too many people overreact to their cost. Clearly, they don't have to be that costly since lots of low income people have children. Anyways, we have found them to be inexpensive if you don't count college. Of course, if you believe the hype about their cost, then you will match your spending to that hype. If you believe they are cheap, then there is a chance that you will match your lack of spending on them to that, too. I have often commented on how inexpensive our kids have been and yours can be, too.
I'm not sure I agree with this completely. For us (2 full-time working spouses), we have 2 kids in daycare (now afterschool care and summer daycare) which costs about $15,000/year (it was about $24,000 when both were in pure daycare). Also, we've made about $100,000+ of 529 contributions in the past 5 years. This ain't peanuts. We could have done the daycare cheaper, but we can afford it. As far as insurance, food, etc.-- the increased costs are minimal, I agree.

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by rayson » Sun Jan 19, 2014 1:39 pm

zebrafish wrote:1. Difficult to make a decision about a job where you haven't even interviewed; if it is a really good opportunity, I might take it. If your goal is to get to the midwest, this might be a great opportunity. Get all the information, then make a decision.

2. Kids do more than decrease your savings rate-- it is total freakin' chaos! I think everyone freaks out a little before having their first child. Change is always stressful. Your current savings rate sounds ridiculous (in a good way), but you don't live to save (you should save to live) and you can afford to have children. I wouldn't trade my kids in for any amount of money or savings.

3. This advice totally depends on your family and what they're like-- my spouse and I moved to be near my in-laws about 8 years ago, and it was the best decision ever for us and our kids. My kids have grown up with fantastic grandparents around. They come every Saturday and help look after the kids so we can get errands done, etc. A price cannot be put on this. Making this move really changed my career trajectory (didn't know it would at the time), but in retrospect it has all worked out for us.

Rather than being anxious, try to focus on the great opportunities and adventures that you are about to embark on! Will it be financially perfect? No. Will it be worth it? Yes.
+1

Listen to Zebrafish. Often times we get anxious before we have all the information. My advice to you would be to not delay your job search any further. Start making phone calls and do the due diligence on prospect employers in Chicago. It will be much easier to make the transition and move when you don't have kids. Staying close to family when you have kids will be a blessing, especially in case of working parents like you. Trust me on this. If you have concerns about your wife's career prospects, you should have her start the job search right away as well to minimize that risk. Who knows how the economy will be in 2 years. So far all economic indicators show that there will be more hiring in 2014. Delay no further. You may even be surprised by a raise and a generous relocation package if you find a good job. Good luck!

dcw213
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by dcw213 » Sun Jan 19, 2014 1:57 pm

rayson wrote:
zebrafish wrote:1. Difficult to make a decision about a job where you haven't even interviewed; if it is a really good opportunity, I might take it. If your goal is to get to the midwest, this might be a great opportunity. Get all the information, then make a decision.

2. Kids do more than decrease your savings rate-- it is total freakin' chaos! I think everyone freaks out a little before having their first child. Change is always stressful. Your current savings rate sounds ridiculous (in a good way), but you don't live to save (you should save to live) and you can afford to have children. I wouldn't trade my kids in for any amount of money or savings.

3. This advice totally depends on your family and what they're like-- my spouse and I moved to be near my in-laws about 8 years ago, and it was the best decision ever for us and our kids. My kids have grown up with fantastic grandparents around. They come every Saturday and help look after the kids so we can get errands done, etc. A price cannot be put on this. Making this move really changed my career trajectory (didn't know it would at the time), but in retrospect it has all worked out for us.

Rather than being anxious, try to focus on the great opportunities and adventures that you are about to embark on! Will it be financially perfect? No. Will it be worth it? Yes.
+1

Listen to Zebrafish. Often times we get anxious before we have all the information. My advice to you would be to not delay your job search any further. Start making phone calls and do the due diligence on prospect employers in Chicago. It will be much easier to make the transition and move when you don't have kids. Staying close to family when you have kids will be a blessing, especially in case of working parents like you. Trust me on this. If you have concerns about your wife's career prospects, you should have her start the job search right away as well to minimize that risk. Who knows how the economy will be in 2 years. So far all economic indicators show that there will be more hiring in 2014. Delay no further. You may even be surprised by a raise and a generous relocation package if you find a good job. Good luck!

Thank you both. I think this makes a lot of sense and glad to hear some reinforcement of this thought.

livesoft
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by livesoft » Sun Jan 19, 2014 2:01 pm

zebrafish wrote:I'm not sure I agree with this completely. For us (2 full-time working spouses), we have 2 kids in daycare (now afterschool care and summer daycare) which costs about $15,000/year (it was about $24,000 when both were in pure daycare).
Clearly, for some parents, kids soak up all available extra money. We were living in a suburb of NYC and both working full-time when our first was born. We worked out less expensive day care because when one is making $40,000 a year in NY, one clearly cannot afford $24,000 (or even $12,000) a year in day care expenses.

With our two kids, daycare, after-school, and summer camps were not so expensive because we didn't sacrifice to pay rates that wealthier people can afford to pay.
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by tibbitts » Sun Jan 19, 2014 2:33 pm

dcw213 wrote:
tibbitts wrote:My impression is that the savings are too important to you, and that you have more desire to save than to have biological children. Consider non-biological children: they come with some expenses paid, and fewer years of high maintenance required. No need for grandparents close by. That might be the correct solution for you.
Understand how you might draw this conclusion, but this is not the case at all. In no way did I imply that the costs of having children were keeping me up - primarily the costs of housing, car, insurance (which would be required if we move regardless). Keep in mind, these are all things I am willing to live with, just thinking a lot about it lately. My main issue comes down to relocate now (pre-baby) vs. immediately after baby. Or said another way, be already in the new routine when the baby comes vs. adjusting post baby in order to keep our good jobs going another 2 years.
I think I understood exactly. What I'm suggesting is that, starting with older children, there would be no compelling reason to relocate. And there would be other savings, from not having daycare expenses, to not having to pay college tuition. You get the child without some of the bills, and get to keep the jobs you have now indefinitely.

Is there only one set of grandparents? You don't want to move to where one set of grandparents live, unless the other set lives there too, barring extraordinary circumstances.

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zebrafish
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Re: Seeking Advice - Job Change, Move, House, Kids

Post by zebrafish » Sun Jan 19, 2014 3:18 pm

tibbitts wrote:Is there only one set of grandparents? You don't want to move to where one set of grandparents live, unless the other set lives there too, barring extraordinary circumstances.
It depends very heavily on the grandparent(s) and how they get along with you and the spouse in-law 8-)

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by Calm Man » Sun Jan 19, 2014 4:19 pm

There is no law that you have to have children. Publicly you will never find a single person who says that life would have been fine (it's hard to get them to say better) without children. Privately......

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by Bacchus01 » Sun Jan 19, 2014 4:41 pm

We made our first move when oldest was 2 and wife was pregnant. We made move two when oldest was 4 and middle was about 6 months. We looked for houses with baby in a carrier. We made move 3 when oldest was 9, middle was 4 and youngest was just over a year.

It's tough, but not that bad.

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by cherijoh » Sun Jan 19, 2014 4:44 pm

zebrafish wrote:Can you execute a long-distance move with an infant? Yes. Is it more painful to do so. Yes. Infants immediately create 1000x their weight in plastic toys/contraptions/etc. They also require virtual constant attention by one parent, which makes it hard for both of you to be productive. (My wife and I moved across the country with an infant. We are still alive. However, it would have been much easier pre-children...).
:D

To the OP:

Having a half million dollar net worth at 30 is fantastic, so I wouldn't be too worried about not continuing to save at this rate. If the job works out, have you considered just renting an apartment in Chicago for a year? You don't have to immediately buy two cars and a house in one fell swoop. Once you both have jobs, you could look into buying a house. With respect to starting a family, it would be much easier to do a local move with an infant, especially if you have lots of friends and family around to help out.

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by beyou » Sun Jan 19, 2014 4:53 pm

30 is a good age to have kids, why wait much longer ?
If you want to have then now is the time to start, not later.

Whether you do that in Chicago on one income, with family and lower costs,
or in DC with two incomes, but higher cost housing and daycare, is a matter of preference,
less a financial decision. Are you sure family will help much ? Do you and your wife want
to have her working anyway ? We thought so after the first kid, but after a 2nd kid she took
a very long career break anyway. We did not like leaving our first child with daycare at all.
You probably wont be sure about this until the time comes, but having one at work and one
at home with the kid and family does not sound so bad. Have to consider if your wife
is cut out for stay at home mom or absolutely MUST work. If she needs that for her sanity,
I would stay in DC, if she needs her family more, job 2nd, then move. That should be
the primary decision point, sounds like you are covered either way as to your job.

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Re: Seeking Advice - Job Change, Move, House, Kids

Post by tibbitts » Sun Jan 19, 2014 6:04 pm

zebrafish wrote:
tibbitts wrote:Is there only one set of grandparents? You don't want to move to where one set of grandparents live, unless the other set lives there too, barring extraordinary circumstances.
It depends very heavily on the grandparent(s) and how they get along with you and the spouse in-law 8-)
That would be the extraordinary circumstances. But if you have a reasonable relationship with both, then you can't move close to one and not the other, when the only reason for moving is to move close to them. The grandparents should move to be closer to the OP if they're sufficiently interested.

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