Emmigration fears II: Taking a pay cut

This post has a happy ending.

As we move up along the academic ladder we expect to earn more money. Not an earth shattering statement to open a blog post with but relevant. When my partner got his offer for a TT position at University E, after currency conversions, we found that he'd be earning as much as I am now as a post doc. He's in a field with average salaries lower than my field, and it was a significant raise from his post doc, so we only had a few misgivings. Then we were told by many that the tax rates in that country are very high. Normally, I don't pay a lot of heed to "they'll take all your money in taxes" talk, because we will be purchasing more services with those tax dollars than we do in the US. However, given my already strong reluctance to emigrate, I let this become a concern.

On my end, I don't know how much I'll be earning at my new postdoc. Apparently the calculation of that amount depends on a lot of paperwork, some of which I've been slow to supply. But, from the estimates I've been given, I'll probably take a cut in my gross pay as well. Again not a reason to turn down a job, but enough for my ego to grumble.

We spent a good chunk of yesterday dealing with financial and immigration minutiae: dull, dreary, stressful work. At one point, I looked over my partner's shoulder to see what his monthly take home pay was. I was surprised. He is taking home significantly more than I am each month. After he qualifies as a single parent for purposes of taxes, he'd be bringing home more.

We get the same net pay. I pay less in taxes, but then I also pay for healthcare for Epsilon and myself. My partner pays for universal healthcare in taxes. I contribute to an employee matched defined contribution retirement fund. He contributes (less) to a defined benefit pension. If I were to stay in this job until retirement, unless I managed to retire in the midst of another phenomenal stock market bubble, at my current contribution rates, the benefits I will receive due to my accumulated contributions will be less than what he will receive from his pension.

By the end of my career if I stay in the States will I likely be bringing more home after taxes and other necessary incidentals? Probably. On the other hand, if I wanted a job for the money, I'd do something else. The lesson I'm taking away from this is that sometimes a pay cut isn't.

Hardships: financial and otherwise

PUI prof had an interesting post in The Two Body Problem about her financial bummers a few days ago. She writes

But I have to admit that I'm having this thought: "We are two Ph.D's with secure jobs. We shouldn't be having these difficulties. Professors are supposed to be- not wealthy- but comfortable."

 before admiting that this is a bit of an entitled thought process.

I have to admit that my thoughts have followed a similar entitled strain recently. If I'd been an MD like my parents wanted, or if I'd gone into industry or finance like so many of my fellow undergrad study budies and graduate school cohort, I could be earning at least as much as I do now, with more stability, a nice apartment in a large city in the US, and living with my partner for the forseeable future. I wouldn't be worried about whether we have enough money in USD to last us until we move in the summer, or if my partner needs to send "remittances to his wife and kid back home." We're not actually poor by any stretch of the imagination. It's only striking when we compare it to where we could be if both my partner and I had chosen different career paths.

I've never felt that a post-docs or graduate student's salary was insufficient in the context of who it supposedly pays for. If one is a young single person with no family obligations, it is possible to live comfortably, though probably not the way you did at your parent's house, on a STEM grad student or post-doc salary at an R1 University in the US. (Note the number of caveats. I am not making generalizations to all grad students. I know some fields and places pay peanuts.) Especially given the knowledge that the income will double going from grad school to post doc, and jump again for a TT position.

We are not poor. But given the emotional, and physical costs of having two academics in one family, we do not have the finances to buy a comfortable life. This is a different problem than the one PUI prof addresses, but somehow, somewhere the expectation of being able to live a comfortable middle class life with all my education rears its head. Though actually, what I want is an comfortable middle class life with all my education and my carreer choice, which is a different matter altogether.

Financial issues in 2-body problems

Mathgirl commented

As for the argument, "you have two incomes, use them to buy time", well, it depends on the context.

If the two people in the couple live appart, this is not so realistic, because these two people have to maintain two households and commute to see each other from time to time. In fact, maybe you can add some comments to how you do it, I never done the long distance since after Toddler was born.

If everybody lives under the same roof, this is more possible, but still depends. In Canada professor salaries are low and pay a lot of taxes, so that doesn't apply to us: we can afford the regular daycare, but we can't afford a nanny, for instance.

I think the argument about having a lot of income in a dual academic couple primarily applies to both adults living in the same household. I should have specified. But there are a few words to be said about a 2 (+ epsilon) body problem.

However, I've seen couples make cross country commuting work on dual graduate student salaries (albeit without a child.) What they have sacrificed is having anything in terms of savings. Also, the particular people in mind all worked outside of academia for several years before entering graduate school, so they started eating into their savings from that period of their lives.

Some things I've learned about long distance relationship finances:

1) Buy tickets long in advance. I've been bitten in the pocketbook because I've tried to buy tickets for the entire term starting at the beginning of the term. All but the last few weeks of the term were more expensive than they had to be if I had been on the ball. Frequent flier programs, credit cards that earn miles, AAA discounts all help.

2) Live within your graduate student means. Epsilon was born a few months after I stopped being a graduate student. Therefore, we never got out of the habit of living like graduate students. All of the extra money from first my salary, and then my partner's has gone either into childcare, savings, commuting or a second rent.

3) All time saving devices are not created equal. For instance, there are different types of daycare that come at different prices. Nannies and large daycare centers that care for dozens of children at several different age groups tend to be more expensive than day cares run out of people's homes. Depending on what you want and need out of day care, the latter may be sufficient. We are saving about $900/mo by choosing the latter option.

Similarly, buying time on food prep does not have to mean eating out all the time, which breaks both my fiscal and caloric budget. Take a second look at the deli section and frozen foods section of your local grocery stores for partially prepared foods. We found, on warm days that we could combine Epsilon's walk (back when he still enjoyed going for a stroll in a stroller) with a run to the local grocery store for a loaf of fresh bread and soup, cheese, fruit and tomatoes. This was a much more enjoyable dinner to eat on the lawn than going out to the local upscale burger joint. Sometimes there are small catering businesses that have meal plans, where they deliver X meals/week, delivered to your house.

In January, when our 2-body problem gets bad again, I'm planning on hiring someone to come by the house once a week for a few hours to clean. As long as I can control the amount of mess that Epsilon and I make, we can get by with just a few hours a week. Figure out where the steep changes in the price points are, and see if you can work within those ranges.

4) Utilize your housing space. If you are about to move, or if you have an extra room that is under utilized, consider rearranging space in your house to have a house mate. When we moved to this job, we got a 2 bedroom house, with the knowledge that Epsilon would probably want his own bedroom by the time we had to move again. In the mean while, we rented the spare room out to an acquaintance with the agreement that part of her rent would be paid in childcare. This solved the problem of not having outside the home child care for Epsilon during the first several months of his life. After she moved out, and while Epsilon was living with my partner, we rented the spare room out as a temporary sublet. This was also a solution to my unease of leaving the house completely empty for weeks at a time when I was away. If you are in an urban area, Craigslist is a great resource for finding matches.

5) Be creative. Epsilon is a very early riser. At one point, I paid the aforementioned house mate to come by and take him in the mornings so I could sleep in until the sun had risen.

The ironic fact about our budgeting is that the biggest crunches we've felt the for paying our credit cards has been when our respective universities budget offices haven't refunded us for our conference travel. It's really hard to hold a buffer of a few thousand dollars in the bank account for several months because the university is swamped with reimbursement.