For various reasons of budget and taxes I was looking at old pay stubs and current ones for my wife and myself as I was going through paperwork in my home office last week. What I found distressed me to no end.  What my wife and I make is not what we think we make.

For instance, in the last 6 weeks, my wife's pay stub has reported almost $2000 in "other" compensation.  She has not received any monetary compensation and has no idea what this is referring to.  I asked her to find out from her employer's human resource department that this is exactly.  We will be taxed on this "other" compensation, and need to know what it is so that if there was na error it can be corrected.  We know it is not bonus pay as that is listed seperately.  This increased other compensation may have other affects as well, such as reducing or eliminating any public aid benefits towhich we may otherwise be eligible with a family as large as ours.For myself, I looked at my paystubs for this last year and almost fell over.  My net pay is $400 per pay period lower than it was about two years ago.  My gross pay has gone up slightly, but the net has actually gone down.

Over the last twelve months about $10,000 what withheld from my pay for medical coverage and FSA.  Now FSA I volunteered for, but with held that much because the company calculator indicated there would not be much change in my net.  The calculator was wrong.  On top of this the amount of employee contribution for medical coverage has increased substantially.  I've been told by some that the employee contribution on this has increased again.  The bottom line on this is that depite what my salary may or may not be, last year I made $10,000 less than I thought I did.  Public aid sees the gross not the net, so no school lunches or food assistance.

Our family's net income has actually gone down.  This explains why there is  so much trouble coming up with money to by food for the house.  Why utility bills are late periodically.  Why we haven't bought a car in 3 years.  This explains alot of things.

What becomes the net effect?  Well, we've determined that we can no longer afford to live in the house we bought 5 years ago.  We will need to sell it and move back out to the country.  We do not know if we can get what we owe on the house, but we were equity positive when we bought it.  We are looking at repossessed doublewide mobile homes for a replacement for the time being until we can build a more substantial structure.  We still have the 14ac in the country.  The commute is hard, but nothing I haven't done before.  My wife may need to leave her job at that point as her salary is not enough to be profitable with the commute.  Plus we will be losing our daycare for the two year old and will need her at the house.

The company I work for gives annual reviews and raises in a couple of months  after the end of their fiscal year and if there is enough there we may not need to move.  So there are some variables that I do not have answers to yet.  The plan at this point is to prepare.  Even if the new home was bought and placed tomorrow, we would not plan on selling the current house until after school gets out as one of our sons graduates this year.

Some may ask how we could afford to get a new home and place it yet keep the old one for several more months, if low or lost income is why we are needing to move?  That is a good question, since we certainly won't qualify for a new mortgage at this point.  Well the answer is relativley simple, we have arrange to privately finance this through a family member which will buy us the time necessary to stage all of this.  We still have some specifics to work out but the staging has begun.

The shocker for me though was all that was witheld from my salary.  When I was a contactor, I got a check that was my agreed compensation - nothing was withheld.  I got a 1099 at the year's end from each company I did work for.  I was able to write off enough that I still got assistance for food at times - at least with school lunches.  (Six children eat a lot more that you may think).  My base pay was substantially higher too.  You think when you take a job for XXXXXXX salary, that you get that.  But you don't.  There is most assuredly a co-pay for almost every company provided benefit that will come from that salary.  My current medical insurance co-pay is equal to about what the whole premium was when I was a contactor five years ago - when I made more money.  Your net pay is much lower than what you think it might be.  

In fact, you could change jobs for a raise, increase the number of dependants to lower withholding for taxes and because of benefit co-pay and possible tax bracket increase end up with a lower net pay in the weekly check.

We our large family we can no longer maintain the home we currently have.  Net pay is going down - whether salary goes up or not.  There is no buffer, no emergency fund.   It is unlikely that we will see raises this year that will change this situation, so we must prepare for a move.

It's a good thing we actually prefer to live on a farm rather than in the city.  Still, we are distressed about the situation.

When we bought this house our gross income was about $25,000 more than it is now.  Our net income was probably closer to $35,000 more than now.

What would I ask of my readers in this?  Well, first check your pay stubs and make sure your getting what your supposed to be getting and that you understand all the deductions and incomes.  Second, only pray that G-d will open the right opportunity for us and that we make the best most responsible decision for the long term benefit of our family.  Third, before accepting any kind of job changing offer with another company, understand the costs associated - your net may not be what you think, you may end up losing money.

Our goal at this point is to strengthen our financial position.  I am NOT looking for new employment at this time.  I will make the commute.  My kids will go from a 4A school to a 2A school or a charter school, possibly home-school again.  We are going to lower our cost of doing business by moving to a smaller house that has a much smaller monthly footprint into our budget and see if we can get an emergency fund built, a solid food budget and some joy back into our lives.