In the US, over 40% of Americans chose time over higher pay — MarketWatch
In the United States, more than four in ten Americans have turned down a higher-paying career opportunity in order to preserve more personal time. This is stated in a study by Edelman Financial Engines, cited by MarketWatch.
The issue of balancing income and free time is increasingly arising for millennials and Generation X members who are reaching the peak of their careers. For many families, parental responsibilities are one of the key factors: during this period, income and retirement savings may grow, while expenses for childcare, healthcare and housing also increase.
According to the US Centers for Disease Control and Prevention, the average age of women at the birth of their first child in the country has risen to 27.5 years, and in some states is approaching 30 years. The author notes that many households depend on two incomes even to cover the cost of living, so reducing earnings is not always possible.
Different opportunities for men and women
Among Americans aged 30 to 39, men were more likely than women to report that they had turned down higher pay in favor of personal time: 62% versus 44%. The author of the article, Edelman Financial Engines director of financial planning Rose Fay, links this difference to the so-called motherhood penalty.
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After having children, women may face slower wage growth and fewer opportunities for career advancement. At the same time, significantly reducing working hours or leaving the labor market can be financially difficult for families that rely on two incomes to cover current expenses.
How to prepare for a job change
Fay advises building an emergency fund sufficient to cover six to nine months of expenses before making a significant career change. She also recommends reviewing monthly expenses in advance, giving up non-essential payments and reducing high-interest debt.
To pay off debt, the author suggests the "avalanche" method: making minimum payments on all obligations and directing extra funds toward the debt with the highest interest rate. Families are also advised to discuss whose job has greater flexibility, how care for loved ones is divided and how a change in income will affect retirement savings.
According to the study, 63% of Americans would prefer never to worry about health again rather than never to worry about money again. The author stresses that a decision to reduce employment requires a long-term financial plan that takes into account investments, taxes, insurance and retirement savings.
