In 2009, I was a very senior executive celebrating my fourth anniversary at a brokerage firm.
I was working about 70 hours a week, managing 80 people and traveling to the company’s other offices (two of which were cross-country) 3-4 days a week, twice a month. Even when I wasn’t at the office or on the road, my Blackberry was constantly lighting up on nights and weekends. I would estimate I got about 400 emails a day.
But with three children under 10, I knew that years of working at a blistering pace was taking a toll on our family, and I needed to make a change. I set out to find something a little less intense and found a great consulting role in marketing and product development with a small firm.
I was excited to keep up all my professional skills (and get some new ones) at a pace I knew would bring some welcome relief to the crazy of our household. At this new job I would manage only 15 people, largely set my own schedule and truly be offline while I was at home. But to make it work, we had to make some adjustments in order to accommodate my reduced salary.
In fact, it was a big reduction: $5,000 a month, plus the substantial bonuses I would no longer receive. When I did the math, I didn’t think it was even possible to make such a massive shift in our lifestyle—but I knew I had to give it a try if I didn’t want to burn out before I turned 40.
How We Cut $5,500 a Month
My husband Mark and I live in Larchmont, N.Y., a small town about 30 minutes outside of New York City, with our three kids, plus our dog Emily, our cat Nikki and our fish Charlie. It isn’t cheap: The median household income hovers around $160,396.
Mark and I had always been good savers. I grew up in a modest home in a blue-collar town near Detroit, Michigan, but I never felt deprived. My parents taught me to never spend more than you earned—period. And I think that instinct kicked in when I took the new job. I had lived with less before and I absolutely knew I could do it again.
RELATED: How We Started Saving $1,000 a Month
Salary cuts aside, I knew that no matter what, we could make things work as long as I followed my parents’ advice. I was fortunate that along with my new position, I still had the financial advantage of a 401(k) with company match for my retirement savings, and considerable savings. My kids stayed on my husband’s insurance, and I realized it was cheaper to leave them there and put myself on my new company’s plan. That just left our monthly expenses, which had ballooned as our family grew.
After a lot of conversation with my husband and a ton of research, I figured out how to make it work.
The first thing I did to scale back our spending was aggregate all of my accounts with an online tool (the LearnVest Money Center wasn’t around then!) to understand where my pay was going. Once I could see my spending in one place, I sorted my expenses from largest to smallest. I figured if I could make big cuts on the big items, I would have a fighting chance of making it work. I’ve never been an over-spender, but we had a substantial mortgage and a full-time nanny, which topped my list of expenses.