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Ask Jesse: What should we consider when moving from irregular income to regular income?


I have been a stay-at-home mom since the beginning of 2011, but before then I worked hourly and my schedule constantly changed. My husband own his own small seasonal business, is in the ministry (he receives a housing allowance), and has worked any job that has come up for the past two years (always temporary, part-time, changing schedules).

He now has a job offer in another state that is a full-time position with a set salary and benefits. This would be the first time ever in our marriage of four years that we’ve had a full-time job like this. We are very excited, but we are quite nervous as to how to figure out what our budget changes might be.

What are some things that we should consider when looking at the job offer? Also, any tips on what to do when considering a change from one state to another and how to figure out the cost differences between states? – a reader

Making a move for a career change is a momentous event, even if you are not moving out of state. We have moved a number of times and have always had an irregular income, so proper budgeting is always key to making the transition a success.

First, I would make sure that you and your husband are where you are supposed to be, that you are on the same page, and that you both have complete peace about making the jump. These are the most important considerations to make and you can easily be overcome by the enticement of the regular paycheck. If you make this move prematurely, without family harmony, or for the wrong motives, that regular check will probably not go as far as the old irregular income–or at least there will probably be conflict and frustration attached with it.

Second, if you pass the first test, determine the lowest amount you could live on, add some wiggle room, and then create a budget based on that amount (provided it is still less than your set income). If you’ve never budgeted before, you’ll want to give yourself some breathing room as a cushion while you get settled into the new area and become more accustomed to budgeting.

After you get somewhat acclimated (usually somewhere around three to six months), reevaluate your budget and your financial priorities to see what areas need to be tweaked. Remember, a budget is a living document. It should be changed as your needs and priorities change.

Do keep in mind that just because you don’t use all of the money you budgeted in a category doesn’t necessarily mean you need to lower that category. I’d wait for at least six months to a year before deciding to significantly cut a budget category because many categories will fluctuate throughout the year. For instance, if we have money leftover in our utilities budget (a category that tends to fluctuate quite a bit based on the time of year), we always keep that budget “bucket” balance accumulating to make up the difference on months when our utility bills are higher.

Another thing you should consider in analyzing this job opportunity are tax law changes. I once worked in a city other than where we lived that imposed a municipal income tax. We had to make sure we included that in savings just in case the employer withholding was insufficient to cover it.

Finally, the last consideration would be housing. I know that there are a lot of people adamant that you need to buy buy buy, especially in this economy. But, if you are moving to another area, my recommendation would be to rent, especially in this economy, and definitely if you are moving to another state.

Before buying a home, not only do you want to make sure you have a good down payment saved up and know that you’ll be living in an area for longer than a year or two, but it’s also helpful to have a better feel for the areas of town you’d want to live. You’d much rather rent for six month or a year and scout out your home and location options, than to just run ahead and buy something when you’re really unfamiliar with the area.

For those of you who have made a similar jump, I would love to see your other recommendations and considerations in the comments.

Jesse Paine is a licensed attorney who owns his own law firm. He’s married to Crystal and is the numbers nerd of the MoneySavingMom.com team! If you have a question you’d like him to answer in a future column, you can submit it here [2].

The content of this column intended for informational use only and is not to be construed as providing legal, investing, accounting, or other professional advice. Your situation is factually specific and you should accordingly seek qualified professional counsel concerning your specific legal, investing or accounting needs.