You are wrong about money. We all are. It often comes from the financial advice we grew up with and the particular structure we then took to manage our own finances. Added to that, many of us are of the generation who witnessed an affluent boom followed by an earth-shattering economic crash making us somewhat sceptical about the validity of our finances. We tend to look at money in an awfully specific manner - what comes in versus what goes out and naturally our biggest spends are our biggest risks. This makes us risk adverse resulting in us desperately trying to avoid rocking the boat. Once the money comes in we believe we can comfortably afford the mortgage and everything else which comes with being a homeowner. It’s somewhat black and white when the figures stack up. For that reason, our mortgage followed by childcare are the two most daunting monetary discussions many couples have, especially when one or the other wants out of their current job to pursue something more meaningful.
Money is the biggest reason why some continue to struggle in a job they hate despite their ambitions floating constantly in their heads. The risk seems too great to take that leap. Without that guaranteed income, those numbers seem too difficult to manipulate. If this is you and you have spent an endless amount of time wishing you had the courage and more importantly the finances to support your dream, then let me remind you, you are wrong about money. The money may be there, we just need to manipulate those figures. It may mean getting a little creative, but it can be done.
I Was Wrong Too
I was very much on the unknown side before I left my corporate job because I was convinced our finances would not allow me to leave my job and set up my own business. Mama Moments had been dancing in my mind for so long and the balance of work and family life was hitting a point which really was not manageable. But as far as I was concerned, we needed the money to cover the mortgage, the childcare and essentially balance the books and I didn’t think we could do that if we were losing my salary.
It wasn’t until we sat down and hashed through all of our finances, applied some creative thinking and lateral thought, that I could see the possibility of quitting the job I no longer loved and living the life I was craving. Working from home, running my own business and being available for our children became a necessity the more we looked at the figures.
Balancing the Books
The reality was, as we worked through those numbers and understood the differences between me working or not, there really was not much in it. When we took childcare and creche out of the scenario, those black and white figures started to dance a happy dance. Once we factored in the prospect of my tax credits moving to my husband and rejigged our shopping and other bills, the difference was an amazing few hundred euro. That was all! It made me question what I was working for.
In all honesty, the thought that I was working in a job I no longer loved, while enduring the commute and the unbalanced homelife, all for such little money, really upset me and any doubt lifted from my mind. There was no way I would continue to feel such misery for just a few hundred euro.
For years what seemed impossible for me, suddenly became doable because we broke it all down and reorganised what could be moved. When we don’t look at the bigger picture, we limit ourselves and what we can achieve. This can be said for anything in life but when we look at our finances, we really need to hash it all out if quitting our job is to be a positive thing for our personal wellbeing.
Do the Sums
If you are like me and you are schlepping away at a job you no longer enjoy or love, do the sums. There are always options, but you won’t know them unless you open up those books and turn on the calculator.
When considering the costs of family life and what you can and can’t afford remember:
Childcare The cost of childcare will be the largest expense aside from your mortgage or rent. It’s a hefty saving as you well know and can certainly weigh the decision quite quickly.
Tax Credits When one parent decides to give up work, their tax credits can be passed to their spouse. It may be a small saving but ensure credits are passed to get the maximum benefit.
Home Carer’s Credit A home carer’s credit exists for anyone who is caring for a dependent person such as a child up to the age of 18.
Earned Income Credit The Earned Income Tax Credit for the self-employed is available also.
Loans/Credit Cards Consider clearing loans and credit cards before quitting to ensure you start off on the right foot. Financial burdens can be stressful and even more worrying when finances are a little unstable at the beginning.
Nest Egg If your income allows it, build a nest egg before going solo to ensure you have a little buffer or leeway with finances if income is slow to build in the early days.
Big Expenses Consider if there are other expenses you could minimise such as trading down on your car or moving the annual holiday to off peak season.
Minor Expenses We can all cut costs everywhere, but we need to look for them. Do you use your Amazon prime account, or could you live without Spotify premium? All of these subscriptions mount up. Remember you will also save money on work clothes, commuting and those daily cappuccinos.