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How much does your dream job have to pay for you to quit your day job?

August 5, 2014

How much does your dream job have to pay for you to quit your day job?

When I left my job almost 5 years ago, I was making more with freelancing and side hustles (I was a writer for several travel blogs, taught French and Spanish on the side, etc.) than at my day job. I did not want to include any money from rental properties or other investments into my “freedom plan” at the time, because I didn’t have a long enough track record to know how much should be discounted for bad years, rental vacancies and other bumps in the road.

So anyway, I thought I would be fine earning more than I used to at my day job, and just working for myself. But the next month, I also moved from the UK to Morocco. Suddenly, I could live on much less money. Just the price that my tenants were paying for one room in my old UK flat was enough to cover my 700sqft one bed flat, all utilities, my food, and then some.  I realized I could have left my job much sooner than I did, as my lifestyle changed and my needs were drastically reduced. I don’t regret leaving a few months later as the extra paychecks allowed me to get approved for a mortgage on a rental property, and I left soon after closing on the property, adding an extra cushion to my freedom plan with the rental income.

 

Your circumstances will be different

If you leave your job to work from home, you may not need day care anymore. Or a second car. If you earn less money, then the household will pay less taxes. If your spouse makes much more than you do and you are in a high bracket, you may have been paying close to 50% in taxes, so any $1,000 less you are making are “only” $500 less in your pocket.

When you make your financial projections, try to evaluate what your life will be like. Something I often hear from people who are reluctant to quit their job for a dream job paying less is “we barely make ends meet as we are, I can’t afford to get a job that pays less”.

But if you switch to part time work, you will have more time to shop carefully and save on groceries, to cook at home and save on eating out, to plan your family fun and save on leisure and holidays, and so on. It is hard to put a value on those things as you live a busy life and can’t imagine yourself without all the convenience you happily pay for.

Try to picture it. At the moment you pay for a teenager to get the kids back from school. That expense is gone. You need to dress smart for work and pay for dry cleaning and a seasonal closet upgrade. Gone. Your colleagues insisted on going out to lunch every Tuesday and it always cost over $15. Gone.

 

Does your dream job have perks?

Often, if you accept your dream job, it is because the perks attached to it are something you dream of doing, love doing, and/or pay to do at the moment. For example, you become a diving instructor because you love to dive and it allows you to dive for free, when you used to have to work another job then spend money on that hobby. Always dreamed of being a bartender? You can now hang out at the bar every night without the price tag.

Another noticeable perk to working your dream job is that you actually enjoy going to work. Goodbye therapists, pills, depression, sleepless nights, hurtful back, clenched teeth… The benefits on your health, your most important asset, are priceless.

A dream job is not necessarily a job that allows you to work in your dream field, but could also be a job that maximizes your free time to enjoy your dream. Say you love to paint, and it is hard to live off your art. A dream job could be a good enough paying job that has reduced hours, is close to home, and is not very demanding so you keep your energy and creativity for your art. A friend is a postwoman, she has a mail route and starts around 5am. By 11am she is done, paid full time, and can go home to do whatever she pleases.

I talked about my job flipping burgers at McD, making minimum wage, and how it was great to have a job that respected the laws (you work one more minute, you get paid for that minute), and fed you three times a day if you worked 8 hours. It is not demanding at all, when you hang up your hairnet at the end of the day you can go back to having a life, while your passion picks up and provides a steady paycheck.

 

Defining a dream job’s minimum acceptable wage

It can be scary to accept a 30% pay cut to be able to work your dream job, but in many cases, if you take your current salary, deduce all the previous perks and savings due to lifestyle changes we talked about above, you should be just fine. After I had been freelancing for about 3 months, a contract dried up. Then another one around the 6 months mark. This very blog was actually born because my writing gigs were going away one at a time, and after 4 years I was fed up of working for someone else anyway, so I tried to start making money online by myself. I was lucky to succeed, and be able to cover my living expenses, charity giving and expansive travel plans with that new dream job. But even when my income was much lower, I was still willing to reduce a little bit my lifestyle so I could live the dream and not go back to an office ever.

I talked previously about the survival budget, that would bring your expenses down to the bare minimum in case of a job loss or extreme circumstances. Your dream job should pay more than that, you are not about to leave your day job to end up happy professionally, but miserable in other areas of your life.

If your dream job has some room for expansion, like in the case of a freelancer, if you still have time and possibilities to take on more clients down the road, I would say your dream job’s minimum acceptable wage should be whatever covers your current expenses, and the minimum amount of savings that makes you sleep comfortably at night. For me, it would be just expenses as I have enough savings to cover an emergency already, and do not need to add up to that.

If your dream job has no room for income growth more than a yearly 3% raise, like the diving instructor would get at the dive shop, I would include a bit more for savings, in case the raise doesn’t come the next year, but your landlord still raises the rents.

 

I know I would work for free for a true dream job, because I can afford it. But my list of requirements would include having tons of time off to travel and simply be, so it would have to be something sporadic, like working backstage at a major band’s concert, or being a maid in the space shuttle. If it was 5 years back, I would take a pay cut to work my dream job, and I am always the optimist, so would be convinced that I could turn that around and make more soon. In the meanwhile, working a job I love would be worth the smaller paycheck.

 

How about you? Would you work for less money if that mean having a perfect job? What is a perfect job anyway?

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Lovely comments

  1. Rich from www.AboutCloudStorage.com says

    August 5, 2014 at 12:22 am

    I think this is a very careful balancing act. On the one hand, landing your dream job can be so worthwhile that accepting a pay cut might make sense – even if in real terms you’re a little worse off. On the other hand, what are your financial motivations? Some people are happy to just cover their expenses each month and maybe put a little into savings. Others (like me!) want to put away far more so finding the balance between job satisfaction and a decent salary is important; the only thing is that until you really start a job you can never be absolutely certain just how much you’ll enjoy it – no matter what they tell you at the interview!
    Rich from http://www.AboutCloudStorage.com recently posted…What Are The Benefits Of Cloud Storage?My Profile

  2. Save. Spend. Splurge. says

    August 5, 2014 at 12:32 am

    Luckily for me, the two intersect because my dream job pays a decent salary and it is also freelancing which gives me lots of time in between contracts to relax, take a vacation and so on.

    The only way this could get better is if I make more money!!!
    Save. Spend. Splurge. recently posted…July 2014: What I bought, watched and readMy Profile

  3. FI Pilgrim says

    August 5, 2014 at 4:56 am

    I’m with you Pauline, my “dream” job doesn’t have to pay as much as my day job does now, but I think it will pretty soon. Once I finish paying off my mortgage later this year my family’s income need will be lower and I’ll be able to take on more risk. Hopefully 2015 is when I can make that happen!
    FI Pilgrim recently posted…July In Review – Income/Expense and Net WorthMy Profile

  4. Stefanie @ thebrokeandbeautifullife says

    August 5, 2014 at 6:12 am

    I find that people are more willing to compromise on things they need- like enough money and proper benefits- when they love what they do; and that’s not always a good thing.
    Stefanie @ thebrokeandbeautifullife recently posted…Turning 28: Abandoning Self-Imposed DeadlinesMy Profile

    • NZ Muse says

      August 5, 2014 at 8:18 pm

      Yeah, agreed. For me the actual ‘doing’ part is only part of the picture. I would say objectively I enjoy my duties on a day to day basis slightly less now but I get paid much better, have better earning potential, LOVE my coworkers and office. I actually don’t really like cooking so to be honest I’d love to earn tons and never have to cook.
      NZ Muse recently posted…Location, location, location: Renters just wanna live centrally (this one does, anyway)My Profile

  5. Holly@ClubThrifty says

    August 5, 2014 at 6:32 am

    I believe I am working the closest thing I can find to my “dream job” that is out there. It would take me A LOT to switch up what I’m doing, simply because the freedom I have now is priceless.
    Holly@ClubThrifty recently posted…My Upcoming Trips with Credit Card Rewards, Part TwoMy Profile

  6. Tonya@Budget and the Beach says

    August 5, 2014 at 8:28 am

    As long as I could cover my expenses, have a decent lifestyle, and save for retirement, then yes.
    Tonya@Budget and the Beach recently posted…Why Do We Touch a Hot Stove?My Profile

  7. Aldo @ MDN says

    August 5, 2014 at 8:28 am

    I don’t think I would work for less right now because I’m trying to earn more money to reach my financial goals sooner. Once I reach those goals, money would not be an issue and I could do whatever I want regardless of how much I make.
    Aldo @ MDN recently posted…9 Signs You Need A VacationMy Profile

  8. Shannon @ The Heavy Purse says

    August 5, 2014 at 10:44 am

    I feel overall that I am in my dream job. I love what I do and I’m not entirely sure what my “dream” job would be or how it would differ. So I feel blessed in that regards as I know many people don’t necessarily love what they do. For me to leave, I would definitely need to feel comfortable that our overall lifestyle would not change and that we remained on track with all of goals, retirement, college education, etc.
    Shannon @ The Heavy Purse recently posted…Build a Healthy Relationship with Your WantsMy Profile

  9. Brad @ How To Save Money says

    August 5, 2014 at 1:38 pm

    I worked in my dream job for twenty years. I roamed the world as a photographer. Now, technology has killed the field. I went from making 6 figures down to, well, next to nothing. That amount is hard to live on. I am actively seeking a new way to position myself.
    Brad @ How To Save Money recently posted…Save Money on Buying GiftsMy Profile

  10. Anne @ Money Propeller says

    August 5, 2014 at 3:53 pm

    Kathleen and I have been talking about how much we’d need ot earn to quit our day jobs. My number is pretty darn big, because I am risk-averse when it comes to my income. I am working on building up side income, but I want it to be big enough that it would be an option to leave my day job, but the option versus quitting to just do the side hustle comes with a completely different number.
    I dont’ think that makes sense.
    I want enough money in side income that if I was forced to switch, I would be satisfied. That number is lower than how much I would want if I was choosing to resign to pursue side income stuff.
    Anne @ Money Propeller recently posted…Things to ask a Potential TenantMy Profile

    • Pauline says

      August 7, 2014 at 6:02 pm

      That does make sense. I wouldn’t mind earning less if prospects were positive, even if that means delaying savings and treats for a while.

  11. Jayson @ Monster Piggy Bank says

    August 6, 2014 at 7:45 am

    Perks really have something to say to stay at a dream job. I would love to work for a job where perks are really good like free use of gym and discounts at selected restaurants! As a young professional, I am not yet thinking for the figures a bit. I’m not yet at my dream job but I know I am a step closer to it where it equips me with the right skillset needed for my dream job.
    Jayson @ Monster Piggy Bank recently posted…6 Tips for reading through contracts and the fine printMy Profile

    • Pauline says

      August 7, 2014 at 5:55 pm

      Best of luck on your professional journey! Perks are awesome, but you have to value them to make sure they are worth it.

  12. Mrs. Frugalwoods says

    August 6, 2014 at 8:55 am

    You make a great point about the perks of a dream job—that maybe it’s not the actual job itself, but rather the other things it enables you to pursue. That’s a great way of thinking about it!
    Mrs. Frugalwoods recently posted…Frugal Hound Sniffs: The Barefoot BudgeterMy Profile

    • Pauline says

      August 7, 2014 at 5:55 pm

      True, especially if you used to pay for them, it is that much more money saved.

  13. Free to Pursue says

    August 6, 2014 at 7:26 pm

    I gave up 75% of my previous salary for my dream job. I define my hours, my client base and get to manage most of my time the way I want. I am grateful for this point in my life. I have freedom I never thought I would have at 38.

    So far, it’s been 16 months and I haven’t looked back, despite a number of offers I’ve received.

    • Pauline says

      August 7, 2014 at 5:54 pm

      Wow that is quite a drastic pay cut! Looks like it couldn’t have worked better for you.

  14. Kathy Mathis says

    August 14, 2014 at 9:57 am

    Pauline you are pretty right in what you say! Though for me a ‘dream job’ is more of a job that satisfies my ego! It’s quiet similar to how Maslow would explain in his famous Pyramid of hierarchial needs theory! Thanks for the great share!
    Kathy Mathis recently posted…Oscar Winning Actor Robin Williams diesMy Profile

  15. Jeff F says

    May 26, 2015 at 9:45 pm

    Well, I am fortunate to be doing my dream job. The only thing better would be having a clone willing to do my work for free. But seriously, changing careers or jobs and taking that leap into uncertain risk needs be carefully weighed..the pros and the cons.
    Jeff F recently posted…Video: Daily Market RecapMy Profile

  16. Amine El says

    July 26, 2016 at 12:57 pm

    https://www.gofundme.com/2g9j6nw

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