We now work just two days a week!
12 Feb, 2023
This week I thought I’d give you a quick update on our work situation this year. I have mentioned it in passing, but I think it is worth putting more detail around it so that you know a little more about how Jonny and I work, what we earn, and that our unusual situation could be an option for you too.
Both Jonny and I used to have careers. At our peak earnings, we made about $170,000 - $180,000 before tax. But that was a very long time ago. We headed off to work 40 hours a week, often more, and we both enjoyed our jobs. Jonny is a Graphic Designer. I’ve done a wide range of things but primarily working “in sales” (a vague way of saying I sold various items, generally quite big things). Now, I work in administration.
Jonny started out working for someone else, then formed his own successful business with a couple of friends before moving into working as a freelancer. Apart from running my blog, I’ve always happily worked as an employee for someone else.
Two things made us move away from full-time work:
Our daughter was born in 2007, and I quit work for ‘a while’, which turned out to be 4.5 years.
The Christchurch earthquakes changed life as we knew it. We chose to move away for our sanity, and Jonny stopped working for ‘a while’, which turned out to be almost two years.
Because of those two events, we both had decent clean breaks from working and never got back into the groove of full-time work. We easily filled in our day by doing other things. I began a part-time job when our daughter was four, but Jonny stayed home with her. When she started school, he slowly started to build up some part-time freelance work.
Working less evolved; there was no firm plan, and we just went with the flow. There was just no need to work long hours because we found that we could manage to live and save on lower incomes than we were previously used to earning. We began to transition away from needing to work to live.
Our working life is still a work in progress. There have been no great goals or plans, but we are aware of the general direction we want to go in: having the choice to stop all paid work. We have known for many years that, ideally, neither of us wants to rely on a paid job to survive. We want to build up our share market investments so that they can support us instead and that if we do work, it’s because we want to. This has meant that every money decision we have ever made is with an eye to the future.
Now, more than ever, I’m seeing that the decisions we made 10-20 years ago are coming home to roost. Buying a cheaper house than the bank told us we could afford back in 2002 and aggressively paying it off before our daughter joined our whānau set us up for a life that cost less. Without a mortgage payment for the last 16 years, we simply didn’t need to earn as much money.
Now I’m 49, and Jonny is 50. It’s been 16 and 13 years, respectively, since we have both worked full-time, and during that time, it’s been a combination of not working at all or part-time work.
Over the years, opportunities have certainly come up to work full time, but yeah/nah, we had both gotten used to the lifestyle we had gently acquired. It has a nice balance.
In recent years, this blog evolved and gently grew into a small job, becoming a third income stream for our whānau. The key has been that even on a reduced income, we made sure to invest some money, which we have systematically done every month, giving us a fourth stream of income. More on them below.
So, this part-time working gig we have settled into has been good, but nothing ever stays the same, and that has led us to 2023 and another shake-up in our work-life balance, making it even better than before.
What’s Jonny doing?
Jonny’s 50th was looming. He had been working for himself as a freelance graphic designer for many years, and for the hours he put in, the money that ended up in our bank account just didn’t feel like adequate remuneration. Not just that, but he was also becoming unhappy. I saw the storm clouds brewing and began preparing a financial cushion for when he was ready to throw in the towel.
We talked about options and opportunities for change. He wanted to retire fully by 50. Now, I’m an “up and quit” kind of person, but I’m practical, too; I’d prefer not to starve to death. We didn’t have enough invested for him to quit outright, and we didn’t think that was the best option for him either. There is value to be found in work that is not just monetary.
Instead, I think it’s exciting to go out and find something new to do, but Jonny’s not like that at all. He likes stability; change is not exciting to him as it is to me. So, there was a lot of kōrero about the options available to him. We agreed that something had to change; we just had to work out what that looked like as a team. And when it was going to happen. But ultimately, he had to decide and take the leap. I just waited (impatiently) until he was ready.
Finally, late in 2022, he came into the kitchen, leaned against the kitchen bench, folded his arms and said, “I’m done. I want to do something else.” To which I said, that’s f**king brilliant! A new chapter, here we come!
Within 60 seconds, and only because we have a good understanding of our money and budgets, I assured him that if he quit tomorrow, we could live without his income for a good long while. Meaning that the pressure of making money was off the table, and he got the chance to find another job without the pressure of feeding his family. He already knew this, but it was good to go through that together.
Much kōrero ensued!
Did he have to make ‘some’ money? Yes, he did. Unfortunately, he would not be completely retiring, aged 50; we just didn’t have enough invested for that to happen. I could have worked more to cover the shortfall, but that felt counterproductive. Fundamentally, he liked being a graphic designer, he’s highly creative and talented, and you can’t just turn that off in a person. What he disliked was everything that goes into managing his own business. I encouraged him to get out of his comfort zone and go and talk to a few people about what jobs they do and to find out what is out there, which, because he is far quieter than me, he reluctantly (uncomfortably) did. But he also talked with his largest client about just working for them.
Long story short, within the month, that was the outcome; they employed him as a Graphic Designer two days a week as a work-from-home employee right here in Alexandra. He started in late January, working only Tuesday and Thursday. He earns $620 weekly (after tax), plus 3% towards his KiwiSaver.
For now, he is settling into this routine, and his employers, Jonny and I, will keep checking in to see that it’s working out for all of us.
What’s Ruth doing?
Work has also changed around for me this year. I’ve worked happily in an office downtown for ages, and I genuinely enjoy going to work because I get to talk to people all day and have a laugh. Oh, and do some work. I just did front-of-house administration work and worked 14.5 hours spread across four days. My working hours were odd and broke up my day a lot, filling in at lunchtime and working one full day, but they suited my employers and me fine enough.
But a colleague was looking to change her hours, so our office team of three (one of which is the business owner) talked it through, and we are trialling some new hours at the moment. I’m working 16 hours (so, MORE hours), but just two full days, Wednesday and Thursday. So, this gives me five days off in a row. The weekend-to-work ratio is now 5:2.
Which, I’m not going to lie to you, is proving to be incredibly AWESOME. I’m writing this blog post on a sunny Friday afternoon and feel very lucky to be able to do so. I’ve been for a swim, caught up with a friend for coffee, yarned to Jonny, spoken with my neighbour, and interviewed someone for my podcast. I still need to take Blue for a walk, but life is good.
I’m earning $345 a week (after tax), plus 3%, into KiwiSaver.
Weekly take-home pay
Our guaranteed household income from our combined four work days a week is now $965 per week or $50,180 per year. My after-tax hourly wage is $21, and Jonny’s is $38. The fact of the matter is I’m underemployed. I’m capable of earning and doing a lot more. And Jonnys rate is low, considering his skill level and experience. He used to charge out at $110 per hour.
HOWEVER, are we stressed about this? Absolutely not. We are content. We are working to live, not living to work. We love the current situation we find ourselves in and are happy with the amount we are paid; plus, when we each go to work, we look forward to it.
Our shared project: The Happy Saver
There is, however, one other string to our income bow. As if by stealth, this very blog is now providing a third income stream. It’s variable and unpredictable, but it's growing. Income comes from several different places when you blog: writing for others, podcast sponsorship, affiliate links, donations from readers and Phone A Friend calls.
In 2016, when we created The Happy Saver, we did it to help people, first and foremost, without the expectation of payment. From the outset, we said that if it made money, that was a bonus. Now, because of the sheer number of people I have managed to help, readership is growing, and income comes through those above channels.
It’s a work in progress and could disappear anytime, but it makes substantially more than my part-time job now. However, it is unpredictable, so we tend to use our incomes earned as employees to cover all of our day-to-day spending. Any blog income, more or less, goes straight into our investments.
One last source of income
There is a fourth stream of income that we don’t yet use. I recently shared a Net Worth Update, which explained how our investments are coming along. The point of using index funds/ETFs is to create a large pool of invested money from which we can draw. This is generally referred to as the 4% Rule. For example, if we had $1,000,000 invested, we could ‘safely’ withdraw $40,000 tax-free once a year. As you will have read, we currently have over $400,000 invested, so technically, we could sell 4% a year, or $16,000, to use as income. We don’t need to do this at this stage, but it’s good to know we could if we wanted to.
There is an adjustment period.
For both of us, we are in a period of adjustment at the moment, getting used to these new hours of work and the extended period of five days a week off work. We are also both exceptionally aware that this needs to work for our employers and are prepared to be flexible if it does not. But, so far, so good; time will tell.
But Ruth, won’t you get bored?
I can assure you that won’t be the case. The word boredom is not in my vocabulary.
Question: What on earth are we doing all day?
Answer: Anything we want!
For starters, it’s given me time to get a clear run at The Happy Saver, and I’ve already found that some days are spent at my keyboard working through my long to-do list. I caught up on emails! And I already feel more inspired to write and create than ever.
When you work a lot, exercise is the first thing I find that always gets dropped. So, with plenty of time to spare, daily exercise is something we both look forward to doing. I run, walk, practice yoga and swim. Jonny’s mostly into his running because try as I might, I can’t talk him into joining me in my activities!
With good exercise comes good eating, and with time to spare, it is much easier to prepare and eat cheap healthy food. Jonny’s doing most of the cooking at the moment, so I’m more likely to be found on the other side of the kitchen bench just talking to him.
Plus, we each have a list of creative projects and adventures underway or on the cards.
We have both always been present for our daughter and feel so darn lucky that is still the case. When she leaves in the morning, we wave her off. When she comes home in the afternoon, we are still here! She doesn’t seem to mind. As much as we are together, though, we each make time for ourselves. And because I love the company of others, I’m always seeking out people to walk with, drink coffee with, or drink gin with if it's after 5 pm! Indeed, during January, I lost count of how many friends called in for a catchup.
Work less and live more.
A common reaction from people I meet for the first time is, “oh wow, you are so lucky/privileged to work so little”, but I’ll always gently push back at that. I’d say that we are just quite patient and willing to play the long game.
When I met Jonny in my mid 20’s, I probably had about $100 to my name. He’d been working for a year or two, so he had quite a few thousand. A stroke of luck was that we met in the first place! We soon had the love aspect sorted, and we each had an education and career underway, but it was only once we got our heads around how money worked that we really started to build the future that brought us to today. Unfortunately, we were probably late 30s before we really started to work it out, making many money mistakes before that. My only regret is that we didn’t work out the money stuff earlier.
Over the intervening years, we built on that lucky meet-up, just trying to make our life incrementally better year after year. Some cataclysmic things have gone wrong over that time, but we adjusted our course and kept moving forward together. The good always outweighs the bad.
So, yes, there was luck and privilege in our journey. But it was also just small, consistent actions performed over twenty years that bring us to our current point. Had I known what I know now, we could have halved that time!
It is exciting to ponder where Jonny, myself and our daughter will be in five years. I can feel so incredibly optimistic about 2023 and beyond because I’ve been ‘recession-proofing’ our lives for years, so I’ve not got much fear of the future. Instead, it’s exciting to think that while Jonny and I are young, fit and healthy, we get to do the things most people put off until retirement at 65.
I want someone reading this today to look at your situation and make a decision. If you are not currently happy with the hours you work, the time you spend away from your family, the money you earn, the exercise you get, and the friends you have, why don’t you change it?
Small changes made today change the direction of your life over time. And the best bit is that you choose the path you want.
