Do I take a big pay cut and reset my lifestyle?


In this weekly column, I’ll help you sort through financial gray areas, from marriage contracts to inheritances and more. Submit your money question here.

I took a new job about a year ago that has almost doubled my salary, but it’s not the right long term career for me. What interests me will begin with a significant pay cut. I’m excited about a few job opportunities that are closer to family, but my partner and I bought a house soon after taking my current job. Now we have to sell it and we could lose money. Do we take it as a lesson learned and move towards our long-term goals, or are we holding on?

Dear contemplative,

I know what it feels like to take a pay cut. The first few paychecks will sting and make you ask, “Is that it?” You might have pangs of regret that keep you awake for a few nights. But sometimes it’s worth going down one ladder to start climbing another, higher one.

But that’s just my story. There is no guarantee that you will enjoy a new job in a new industry, especially after a drop in pay. From what you’ve shared, it seems like you have a fast-paced personality, which can be dangerous when you’re thinking about uprooting not only your life, but your partner’s as well. You wouldn’t want to sell your house, realize you hate working for less, and wish you hadn’t moved after all. A slow shift in lifestyle changes might be a claim that you are both making the right choices for your future.

Think of your new job and the sale of your home as two separate decisions. What is more important: to start this new career or to be closer to the family? Is teleworking an option? You could sell your current home and move to a smaller location near your loved ones, while pocketing your higher salary to replenish what you lost when you sold your home. Or, try the new job while living in your current location and use your savings to fill a gap in your income.

Without knowing exactly how much you stand to lose by selling your home – at least all of your closing costs, I guess – I can’t tell you how much it will cost you for retirement and other financial goals you may have. I encourage you to meet with a financial advisor who can pick up the watercolor paintings and finish what you have sketched here. With home prices still rising nationwide, the blow may not be as bad as you think.

Keep me posted on how things are going for you.

– Ryan


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