Help a Reader: How Much is 90 Minutes a Day Worth?

I recently received this email from a reader:

I have found myself with two job offers that I must decide between. The first job pays $12,000 more per year but is a 40 mile (1 hour) commute.  The other is only a 10 mile (15 minute) commute.  Both jobs are essentially the same from a career standpoint.  The question really comes down to this, "Is $12,000 a year worth the extra commuting costs and losing 90 minutes per day with my family?"  I would love to get others thoughts on this, it is a tough decision from me at this point.

I emailed him back with the following question:

One question: do you mind telling me the actual salary numbers? The answers/suggestions might be different if we're talking $40,000 or $28,000 versus $112,000 or $100,000.

His response:

$57,000 v. $69,000 (essentially a 21% "jump" for the longer commute, or 17% pay cut if you look at it that way), paying down student/car loans aggressively, 2 children, etc.

So there you go. It's a tough issue. On the one hand, $12,000 extra per year will be part of his pay from here on out. His annual increases will be based on an extra $12k per year and if he takes another job, his new job will factor in that extra $12k per year when they make him a new (better) offer. On the other hand, 90 minutes a day is a TON of time -- not to mention an expense.

What would you suggest he do?

Comments

[cory]

Family: I'd vote to keep the time rather than the money. Once you're making "enough" money, it takes a whole hell of a lot more to make any sort of notable difference. It's also obvious--from the fact that you're even asking this question--that time with your family is important to you. Having a short commute to work means you can stop home during the summer to have lunch with your kids, or be the difference between making it to your kids crappy school plays or recitals or whatever or spending that time in traffic.

Mathematically: Will you be okay with the decision a year down the line knowing that you're $12,000 richer but don't get to see your family as much you like? Also, lets take taxes out of that $12,000, and quadruple your commuting costs, you're looking at less than 9k more--not that much for 90 minutes a day.

Sanity: Another issue to consider is that we're talking 90 minutes of commuting, not 90 minutes of work. Long commutes are historically undervalued as a major cause of stress and diminishing health, despite routinely published studies highlighting this.

Bottom Line: I'd go with the lower salary and shorter commute, though it probably wouldn't hurt to do a "I have another offer in Shantytown for 12k more. I'd really rather work here, can you do anything to get a litle bit closer to their offer?" You've framed it in a way that lets the company know that you want more money, but won't make you look like a sheepish git if they say no and you take the job anyway.

[Jon]

I think that another factor to consider is weather/accidents and increased traffic. Although I am sure that normally it only takes an hour, if you have any type of bad weather, it is not unheard of for that time to double. So now your 15 minute commute is now 30. And your 60 minute commute is now 120 minutes!!!

And if you are near any type of area with a population larger than 100,000 people, traffic is always increasing. So if you are planning on staying at this job for 3-5 years, it would be reasonable to expect a 20%-40% increase in commute time.

So change your assumptions, and compare a 20-25 minute commute with a 70-80 minute commute, and then make your decision. And of course you could always move.

[Jason Dean]

One way to look at this is simply as a matter of hourly rate.

Assuming 40-hour workweeks, 50 weeks a year, the total work time for each job is 2,000 hours. Adding in the commute times, job #1 has a total time committment of 2,125 hours; while job #2 has a total time committment of 2,500 hours.

The pay rate for job #1, figuring in commute time, would therefore be $26.82 an hour; while job #2 would be $27.60 an hour.

Perhaps a better way of evaluating would be to look at things on the margin. Let's give the first 2,125 hours of job #2 a $26.82 pay rate (the pay rate for job #1). That leaves the extra 375 hours, along with an extra $12,000 to make up for the added time. Thus, the marginal pay rate for the extra commute time is $32 an hour.

The decision the individual needs to make is: Is the extra commute time worth $32 an hour? There is no obvious answer -- it is up to him to decide. He needs to weigh the "costs" -- both monetary and non-monetary, and make a decision. Let's not forget the cost of car maintenance, gas, etc., associated with the extra commute. They alone might nearly wipe out difference between the $32 an hour pay rate vs. the $26.82 one.

[Kevin]

Man that is a tough choice. I would like to say that I would choose the extra 90 minutes at home, but the $12k is very enticing.

What about moving closer to the higher paying job? You could probably recoup your moving expenses/closing costs in one year of the new job's extra pay. If it is really a job you are looking at holding for awhile, it might be worth it.

Also, have you tried renegotiating the lower offer? Maybe they would split the difference or better. I personally would probably forgo an extra $5,000 a year to have that time with the family.

[Bears]

I actually had the opposite happen to me. I decreased my commute by 50 minutes one way and increased my salary by 15k. The job work is very similar, however the job load and job atmosphere is very different. The lower paying job was very laid back and the current job is much more stressful. With that being said, I am still not sure if I made the right decision. However, I do not have kids and my since my wife works long hours, that does not factor either.

Assuming that you will work only 40hrs at both jobs, go with the company that you would think you would be most happy with (

[Bears]

Oops, I was supposed to leave that last sentense out!

These questions need to be answered before you make a decision.

How many hours would you work at both jobs?
What company is more laid back or less stressful?
How often are the raises? How big?
Bonuses?
Better 401k match at one than the other?
Opportunities for growth?
Work atmosphere (young/old people, private/corp, safety, etc.)
Company security.

[Anitra]

Basically, you're looking at spending additional time "at work" in order to make more money. What if this was a second job instead of a commute? Would you take a second job (say, pizza delivery) that required you to drive during rush hour 8-10 hours per week for $230?

Personally, I find that if I look at it that way, the money becomes much less enticing. I have friends who are willing to work a second job anyway, so for some people, it may be worth it.

[Matt]

I think that Jason Dean makes a good point that you can start your decision making process by monetizing things. The concerns others have raised are absolutely valid, but if the dollars actually favor the lower-paying job after considering the costs, it's a no-brainer at that point.

So let's monetize the marginal commuting costs too. The current GSA POV mileage reimbursement rate is $0.485/mile. That's supposed to take into account wear and tear on the vehicle, insurance and gasoline. It's not perfect, but let's run with it because it's simple. So, assuming 50 work weeks a year, the second job is results in 50 weeks * 5 days * 60 miles difference round trip. That's 15,000 miles per year, or $7,275.

I think Jason had it right when he calculated the commuting time at the margin, but the commuting costs need to be paid as well. You're not getting an extra $12,000 for commuting, you're getting $12,000 - $7,275, or $4,725. That's only $12.60 an hour, and that's BEFORE TAXES! Keep in mind, you probably don't get to deduct your $7,275 in extra commuting expenses from your income either, so you're netting considerably less that $12.60/hour for your driving time.

At this point I can't tell you whether $4,725/year before taxes is worth all the extra driving time, along with the time away from your family, potential aggravation, and even increased risk to your life from accidents. I can only say that if it were me, I would take the closer job.

[Bears]

Anitra makes a good point...

12k/year or 231/week or 231/8hours = $29/hour. I would take a part time job making 30/hour!

To Matt's point though, it will be significantly lower especially if you drive a Hummer!

[PatatrooperJJ]

I would go insane with a drive on one hour each way.

[Susan]

Money is so transient, but time can never be retrieved. An extra hour and a half, Monday thru Friday is a lot of time away from his family, particularly a young family. He's obviously already a frugal guy ('cuz he knows you) so just splurge with your time instead. You will most likely have the money come your way again so hang tight until your children get older. That's my take on it.

[JJ in Balt]

Will your kids remember Daddy "being there for me" or the extra money? For some people, that is a hard choice, for others it is an easy one.

I know my choice, Best wishes to you either way you go

JJ

[Anne]

Are you driving to work, carpooling, using public transportation? The answer to this makes a huge difference. I get to work on public transportation and my commute never feels like lost time because I'm always reading (or, if in a pinch, working). If my commute doubled, it wouldn't be a big hardship for me. If the issue is spending time with your kids, maybe you will make up the extra time in other ways because you won't need as much alone time once you get home. (Do people with families have alone time?)

If you are driving alone, similarly, you can do something somewhat productive like listen to a book on tape or news radio.

If you're carpooling, I would consider that lost time since you pretty much can't do anything but chat with your coworker(s).

[Tim]

Using this calculator (http://www.commuterpage.com/Userweb/CostCommuting/CostCommuting.htm) you can see that the real monetary difference between the two commutes is about $390 per month. I used 22mpg and gas of $2.80. Thats an additional $4,680 per year in commuting costs. Figure he will take home roughly 70% of the $12000 after taxes you get this:

70% of $1200 = $8400
less the additional commute
$8400 - $4680 = $3720

Figure your commuting an extra 21,500 hours hours per year. So your earning about 17 cents per hour for the extra commute time. Is your family time worth more than 17 cents an hour to you?

I'd probably take the shorter commute time for less money.

[Tim]

Oops, with that math i should be broke, (Just woke up from an overnight shift at the hospital). That's $3720 divided by 21,500 minutes or $10.39 per hour.

I'd probably still take the shorter commute

[rdub98]

I don't think any amount of money would do it. I have shared custody of my son which gives me only 6 out of every 14 days with him (which means that I am missing out on more than 50% of his life). My time with him is precious even if I had him full time, but it becomes exponentially more precious because I don't. Family is far more important than money. Hands down. Personally, I would rather look back on my life and say that I spent as much time as I could with my family than to say that I made x dollars more.

[Patrick]

There are a lot of factors we don't know about, such as his family situation (he just says family, not kids, ages, etc.) or whether he needs the extra money. By asking the question, it would appear that he is doing well enough to go without an extra $1,000/month. But, if he is in debt, needs to save to buy a house, or save for college funds, that extra money could be very helpful.

This may be a situation where one could do a year or two commuting to save some extra money to help get toward other goals, and try to work this position into another job nearer home. One could then use their salary at that time to negotiate for another job closer to home.

Yes, I took the contrarian point of view, but I think these are valid reasons for considering taking the job further away. Many of the reasons for not taking the job are just as valid. Good luck in your decision.

[Rick Freeman]

Been there, done that; take it from experience -- keep the short drive and lower wages. The family is worth it, in the long run.
Good luck in your decision.

[brent]

if the closer job is just as good for the career then take that one.

clearly, the extra salary will barely cover the car running costs.

I've got a serious question for you: can your WAIST-LINE afford the extra 7.5 hours a week of arse-sitting? Will you thank yourself in 5 year's time when you've gained 50lb and can't see your toes anymore? I'm serious, I've seen it happen and it's very sad.

Don't lose your LIFE, let alone your family time, for a _few_ extra bucks.

[brent]

cont'd

Things you could be doing with that extra 7.5 EACH week:
- join 3 basketball teams
- write that novel
- play in the yard with the kids every night
- cook your own dinner occasionally
- get enough sleep = get enough sex
- ride a bike to the closer work and save even MORE time (because exercise and travel time will cancel each other out)
- close your eyes for 3 minutes and not have people honk at you on the freeway
- do house work BEFORE dinner so that you can use the time after dinner for being a good husband to your wife
- talk to your family - not just issue instructions
- read a book... all the way through.
- go on an evening walk each night

[Mark]

Thank you everyone for the great, educated feedback on my situation, it was very helpful. I currently have the one hour commute, which I drive alone, mentioned above at my old job. I agree with cory that it has taken it's toll on my health and family. The job with the shorter commute pays exactly what I make now. I would essentially realize a raise just by shortening my commute.

Somebody suggested that I move closer to the new job. I thought of that, but in the Michigan real estate market there is no way that I could sell my house for what I needed right now (I know, I should have put a bigger down payment, etc. but those are past mistakes that I am correcting now).

After reading your comments this afternoon I decided to ask the company near my house about increasing the offer, they could not increase the salary, but did offer a yearly 4% retirement "bonus" to be put into my 401(k) on top of the regular match. I am almost 100% decided that I am going to take the short commute, considering the latest enhancement to the offer.

My biggest factor in my decision has been the thought of sitting on a congested freeway (I live in the Detroit area) at 6 PM thinking that I would already be home with my family (2 kids, ages 18 months and 3 months) if I had taken that other job. My values have always put family first before career, and I think I would have felt the guilt inside for a long time for not listening to my values. I could certainly use the money to pay down debts, etc. but I certainly do not NEED the extra money to make ends meet. Taking the lower offer would just reinforce my recent push to be financially secure (this blog helps a ton).

Thanks again for the comments, it has really helped.

[Mark Bass]

Bravo for your decision.

You can always earn more money later in life after your kids are grown, but you can never gain more time with your kids so you've got to make the best use of what you're given.

When we come to the end of our lives none of us wants to look back and say, "I've wasted my life. I wish I had done ________." I just always try to step back and look at the long-term end result. It makes decision making much easier.

[LotharBot]

A somewhat similar situation:

My wife and I used to live about an hour away from her workplace. We looked at moving to where we'd have a 7-minute commute. In this case, rather than looking at a salary difference, we were looking at moving costs and a higher rent.

We decided the $150/month increase in rent was less than the gas and wear+tear savings from the shorter commute, and the 3 weekends worth of "moving" work (about 40 hours x 2 people = 80 hours) would be made up just by the shorter commute within a month. So we took the shorter commute.

One added benefit I didn't even realize: the shorter commute freed her up to work overtime, to come in for a couple hours on a weekend, etc. The difference between $57k (with the short commute) and $69k (with the long commute) quickly evaporates if you put in a little bit of overtime on occasion.

[Sara]

You may have already thought of this (but it's hard to know without asking more questions), but have you considered negotiating with the higher-paying job if you could work from home some days per week because of the commute? If you could work from home 2 - 3 days per week, then that would make a big difference to me. Or any flexibility on scheduling (working 7 - 3, for example, or something, to avoid traffic and so you could be home with your kids when they get home from school)...

[My New Choice]

As someone that drives 65 miles each way to work right now, I would recommend the job that is closer but pays less. Something to consider in the job that is further away is the wear and tear on the car. You'll likely need a replacement car much sooner with the longer commute and the maintenance items will come at you quicker. Depending on the commute, there may also be tolls to pay and don't forget the additional costs for gasoline with the longer drive. As Sara mentioned, I did negotiate with my employer to only work 4-day weeks and I can work from home on an as-needed basis (although every day doesn't count unfortunately).

Outside of those financial considerations, you have to think about your family as well. While you will be making less money, you would have more time with your family. Two of my four days I typically work late so I can leave early the other two days, but on those days I miss dinner with the family and sometimes miss getting home before the kids are in bed. Being gone before they wake up also means I can go a day or two without seeing them awake, that can really drag you down.

The question really comes down to whether or not you can make due with less money. If it is going to put you in a bind financially, then maybe the higher paying job is worth it. But I would give strong consideration to the closer job. I've been in my position for 6 years and it can be brutal to do the commute. This whole answer has made me realize that I should be looking for a job closer to home!

[Thomas]

I take the money. the opportunity to increase your salary an extra 12k will take a long time (if ever). The calculator from comments above show that the difference is quite significant. Trip to Disneyland? An extra week at the beach with your family? In time you will gain more experience from your job and you can look to find something closer to home. You'll also have the advantage of having a higher salary to negotiate with.

[vh]

Every morning when I get on that hideous freeway headed for work, the thought that enters my head is "I can't wait to get home." That's not the best opener for 8 or 10 hours at the office. The $15,000 increase that came when I accepted a job offer 40 minutes from my house sure has helped my financial life, the once- or twice-a-week telecommute makes a huge difference, and I don't suppose you could get me back into teaching even if you paid me what I'm earning now. But you sure could get me to take a nonacademic job 15 or 20 minutes from home for $5,000 or maybe even $10,000 less.

All it takes is a minor fender-bender on the freeway to convert your one-hour commute to a two- or three-hour ordeal. A big holiday weekend will do it for you, too. Yesterday it took me two interminable hours in 110-degree heat to get home. Miserable. As for public transport? Not counting wait time, the bus takes 2 hours one direction and 2 hours and 20 minutes the other way, 4 1/3 hours of grand fun: the last time I tried that I was panhandled three times and hit up for a cigarette once. But the cigarette lady was an interesting conversationalist, anyway. So was the homeless mentally ill gentleman who carried on a long, chatty exchange with one of his voices.

If you need the money, you pretty much have to do what you have to do. Consider renting your house for what it would take to cover your mortgage and then buying something closer to the new job. But if you can live without the raise for a year or two, stay put and search for a better-paying job closer to home.

[md]

Well how about this situation:

I have an opportunity to work very close to home, actually, for the village I live in. It is also offering a higher pay, ~4% more. The job is in IT but it doesn't seem like something I'd like to do. On the other hand, I currently work for a school district's IT department about an hour away. I really love this job. I see see myself retiring here. So it basically boils down to 5 min from home + higher pay vs loving my current position. We have a 6month old son. Any opinions?

[FMF]

MD --

I'll post your question later in the month and let readers have at it.