How I Cut My Spending in Half to Take a Job I Loved

cutting expensesIn 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.

RELATED: Why Women Are Burning Out at Work Before 30

How We Cut $5,500 a Month

The author with her family in Banff, Alberta.

The author with her family

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.

  • Aisha

    What a beautiful article, wow. Keep up the great work and thank you for the inspiration.

  • Anna

    I hate to be this person as her family obviously put in a lot of work to adjust their budget. But really, we’re talking about someone who has a full-time nanny and could cut out $5,500 out of her MONTHLY BUDGET. Not exactly representative of normal people. Ba humbug.

  • lctheo

    Gee, how many people don’t make $5500 a month! Really! Give us real people.

  • Tori

    I agree with Anna. Good article, but not relatable to most of your users.

  • AP

    I have to agree that this article is less than helpful. Come on, LearnVest! Most people don’t even make $5500 a month, much less have to cut that much from a monthly budget. And I’m sorry, but it’s hard to feel bad that this woman had to “give up” her full-time nanny for an au pair. Those of us living in the real world are doing our jobs outside and inside the home on our own!

  • Emm

    “There are great bottles of wine in liquor stores for under $20″– really? She didn’t know that? This woman does not relate to the average reader!!

  • Traci

    I also would have to agree. A lot of the articles on the site are for women who have salaries much larger than the average person. I would like to see more relatable ideas for myself considering I make half of the 5,500 she had to cut from her budget.

    • kneelbeforetigers

      I know– could we see an article for someone who makes $60K or under???

  • Laura@GiveMe10.info

    While the economics might not apply to everyone, I like this story as a reminder to think through the options before I say “Oh, that’ll never work”. Some of that planning is a slog (like refinancing a mortgage) but worth it when you look at the payoff.

  • betsy ross

    I agree with most of the readers….find someone we can relate to! This woman thinks she is dolling out life lessons by telling us to downgrade Parmesan cheese and chose bottles of wine for less than $20?!?! My, oh my! My eyes have been opened.

    Congrats on the success lady, but you are out of touch.

  • http://budgetandthebeach.com/ Budget & the Beach

    I have to agree with the other commenters. While it may have been a struggle for “her,” It’s hard for me to relate to it being a stubble since I would love to make that per month. That being said, if I wrote that I cut cable to save money, someone out there might think, “oh cry me a river, I don’t even have a TV!” So I guess it’s all relative to what you were used to before. Someone out there always has it better, and someone out there always has it worse.

  • http://twitter.com/SenseofCents Michelle

    Right now I am working a couple of full-time jobs (my main salary job plus side hustles http://www.makingsenseofcents.com/extra-income ) and am thinking about cutting my full-time job. It will result in a large decrease in monthly income, but I want to be happy! Good post.

  • Richelle Thomas

    I think the other commenters are being harsh. The point of the article was not to bash this woman for her success but to realize that with diligent inquiry we can all find ways to adjust our expenses. See the big picture people, don’t let your bitterness/jealousy ruin what was a very thoughtful article. Kudos lLearnvest for showing all demographics of income.

  • Getreal

    Yesterday I heard on NPR that 94% of middle class Americans do not believe that hard work and a college education will guarantee their children the same standard of living or better. This woman has no clue, she worked for a brokerage, enough said. The finance industry continues to ruin our country with the outrageous salaries for bad practices that add nothing to our economy, just make more money for those in the finance industry. This woman was part of the problem, not the solution. Our country is divided between the 10% who make enough to easily cut $5500 a month out of their expenses and the rat who earn $5500 a month. Very very wrong and portends an unhappy future for us all.

  • Jenna

    I am losing interest in LV articles. I commend this woman’s efforts, but $5500 a month (to cut!) is more than double what I make in a month. This is just plain hard to relate to. And the realization that wine under 20 dollars can be good?? Ridiculous.

    • kneelbeforetigers

      Same here– very close to unsubscribing myself and our work account.

  • weswes

    One of the main ways this woman “saved” money, was to put another woman out of the job (her nanny of 8 years) and then rely on low paid au pairs (the exploited interns of the childcare world), who she goes on to mostly complain about. I do not want financial advice that encourages me to take advantage of others.

  • jules

    I really cannot empathize. Get real. We don’t need to hear from the 1 percenters!

  • Tania

    As I read this article, I knew what was coming. Here we go again, the disgruntled commentors with the OMG this woman has a nanny. Here’s the thing, I’m not a mother, over 40, am divorced and while I make a good income I’m sure I don’t make anything near what she was making. So, me and the writer have very little in common but when I read articles/posts I try to find what I can take away for my life. If the articles have no take away on a broader, less specific perspective than I go elsewhere. Not every site can be everyone’s everything. My take away is (1) look for opportunities large and small including opportunities to decrease interest expense (2) see if you can get a similar service for less (3) if you plan on spending more time at home versus going out, see what fun bits or luxury you can re-create at home for less. I do agree LV is a bit focused on a certain demographic at times (professional or creative urban dwellers middle class and up) and if you feel the articles aren’t focused enough on frugal living as you’d like, there are so many other sites that will provide more of those types of articles.

  • Erika

    I understand why most readers are upset about the article (as this woman is clearly well off) but I loved the message behind the story. As a young woman who recently made a career change that cost me a 50% salary decrease (which, as a 20something living in NYC is NOT easy to swallow!) I can empathize with her situation. It’s about having the bravery to take a risk and do something different, while recognizing that your everyday life is going to have to be drastically restructured to manage your finances appropriately. I appreciate the story she had to tell, not because of the $$$ she had to cut, but because it shows us that big bucks can be saved if we’re diligent enough!

  • Ann

    Many of us have worked for companies that have done away with the 401k and the so called fringe benefits of employment after working in occupations 30+ years. Where are the articles to tell us where to find high pay jobs at any age?

  • EKS

    I’m sure your nanny of eight years loved becoming unemployed in your cost-cutting process. A human is just another line item right?

    • readiness

      That was my thought.

      My mom was a single mom in a high intensity job (er doc) so growing up I had a revolving door of babysitters, au pairs, nannies etc. The instability in the home (who’s there when I got home today?), constantly changing attachment figures (I would get close to person to have them leave until I just stopped trying), etc. contributed to to some significant mental health issues. I’m sure the kids are glad that mom’s home more and it sounds like dad’s home too but eight years is a long time for a kid under 10… They were probably pretty attached…

  • Sebastian

    With all due respect, but this was useless for almost all potential readers.

    95% of whom could care less how to cut 5000$ in monthly costs, because they don’t earn even close to that. Even double earners can almost never afford to higher any help, au-pair, full or part-time. (A full time nanny, really? Even if you can afford it, I question it as a good decision.)

    The other 5% are probably able to figure out that cutting the nanny and paying down on your mortgage is a good idea. Also: You should have bought cheaper in the first place (smaller or less expensive location). IMHO, bringing 30% (+) equity to the table is the only prudent thing when buying real estate, bringing less than 20%? Asking for trouble.

    Honestly, If you struggle to make ends meet with the kind of income you apparently have, you were already spending without too much abandon.

    I suggest having a look at the medium wage, then at the 85% percentile wage. Then take a step back and bloody THINK for a time.

    The only thing I learned from this article (note to the editor: why did you think it was worth posting?), is that some people still lack the necessary perspective to appreciate their incredibly good luck.

    Suggestion for a more interesting bent: Why did you not make a simliar decision much earlier? 80 hours of work/week are never worth it if you can reasonably work for a STILL very good income.

  • Matthew Bunn

    I cut back on wine, went from a nanny to an au pairs, plus not spending $500 eating out. Plus I cut back on the cheese budget. 1% problems. Thanks for the tips…the real world wasn’t doing any of this to start with.

  • twinmom

    i did this last year. cut into 1 paycheck for hubby to go to school full time for 15 months to make our lives better. with a family of 5 i was able to fit in a paycheck of $2600/month. gave up 1 car, rode the bus to work, bought groceries at 99 cent stores, and went to parks on weekends with the kids. said no to every wedding, kids party there is, but hang out with kids playdates with friends at home.

  • liz

    All of you who complain that this isn’t relatable – there are some people who earn an above-average income who can relate. I can’t always relate to articles (and posters) who say “I only make $8 an hour and have $40K in credit card debt” but I don’t post that even though I don’t understand why people buy things they can’t afford.
    For the record, I can’t relate to this article because I don’t have kids and certainly don’t make this much money, but this is a lot more like how I grew up (au pairs, eating out a lot, expensive cheese) than families where the mom didn’t work.
    So, thank you LearnVest for posting more than one view point.

    • awakeinwa

      this article’s title could use more polish and context. for wrong demo, it is indeed entirely useless. I can easily pen an article that is more general purpose and less trite and bubbled.

      • liz

        Then you should feel free.

        • awakeinwa

          I will. Stay tuned.