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November 26, 2022

Part-Time Work at 40 Years Old: How We Afford Working Fewer Hours

Andy Hill and Nicole Hill

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There’s a change happening. The pandemic allowed us all to pause, rethink our priorities and decide if the full-time employment grind is worth it for us. 

This “great pause” gave us more time with family and less time worrying about rush hour traffic and unnecessary work meetings. 

Financially speaking, not everyone has the luxury of not returning to work. According to a survey by LendingClub, 63% of Americans are living paycheck to paycheck. So if those Americans aren’t earning that full-time paycheck, they’d be in financial trouble. 

And record high inflation has only made the situation worse this year. 

So if we don’t want to keep our stressful full-time jobs and we can’t afford to not work at all … what’s the solution?

Well, I’m a big fan of middle-ground solutions and for our family, that solution has been part-time work. I currently work as a part-time family finance coach. And my wife is seeking part-time employment as an esthetician. 

This way, we’re both still working and earning money doing work we enjoy, but not overworking. And we have time with our kids while they are still young. 

To help people who are living paycheck to paycheck, but want to work part-time in the future, here are the steps we took to work part-time at 40 years old.

Create a Budget

If you want to work part-time, you need to be able to live on part-time pay. For most of us, that means less money. 

While that sounds like a bummer on the surface, it can actually be freeing when we find out we’ve been spending money on things that don’t matter!

By creating a budget, you can a view of where your money is currently going. If you don’t like how your money is being used, a budget can help you craft a new future for your money. A future with less work and more time for yourself and your family. 

The process has become a lot easier with the advances in budget apps for families. Your money gets automatically tracked and opportunities for saving become a lot easier. 

Grow the Gap

Once you understand where your money is going, it’s time to grow the gap between your income and your expenses. If we’re living paycheck to paycheck, like most Americans are, this is our opportunity to slowly but surely move away from that type of living. 

Reduce Expenses

Spending less money is the quickest way to be able to afford to work part-time by 40 (or any other age). There’s no easier way to say it. 

I like to start by reducing expenses that don’t kill our joy. Here are some examples:

  • Eliminating unused subscription services or gym memberships (Estimated Annual Savings:  $250-$1,000)
  • Negotiating or switching auto and home insurance providers (Estimated Annual Savings:  $1,000)
  • Switch to an MVNO cell phone provider like Tello instead of a bigger provider like Verizon (Estimated Annual Savings:  $600-$1000)
  • Shop at a lower-cost grocery store like Aldi (Estimated Annual Savings:  $3,000-$5,000)

Right there with those actions, a family could save between $5,000 and $8,000 per year! I know because those are all things that our family did to make part-time work a reality. 

From there, you should consider looking at your housing, transportation, utilities, and food expenses a bit more deeply. Since those are typically the top expenses in the budgets of most Americans, the biggest savings can happen there.  

Increase Income

Reducing your expenses can only go so far, that’s why it’s important to look for ways to increase your income for a period of time as well. 

This increase in income can help you eliminate burdensome debt, grow your savings and invest more. 

Start at Work

The best place to start with increasing your income is with the place where you already are making money. Is it possible to get a bonus, commission, overtime, or a raise at your current employer? If so, take the steps to get there. 

Here’s how I was able to grow my income at my job from 5-figures to 6-figures

Side Hustles

Outside of your job, you can always start a side hustle that you enjoy that brings in additional money for a period of time. Freelance writing was my favorite side hustle during our wealth-building journey and my wife’s was organizing other people’s homes! 

Here’s a list of 30 profitable side hustles for parents.

Save Money for Emergencies

Save money for emergencies

When the extra money starts to flow in after growing the gap between your income and expenses, you should save money for emergencies.

Having 3-6 months of expenses is recommended by most financial professionals. This amount of money can help protect you from job loss for a period of time, cover insurance deductibles, and pay for unexpected expenses like car and appliance repairs. 

You don’t need the 3-6 months right away. Start with 1 month of expenses and grow from there. 

We use Ally for our Emergency savings. It has a unique buckets feature that allows you to separate your savings into different categories. Since you can learn what your Emergencies are over time – we’ve created buckets like new appliances, car deductibles and we even had an FU Money fund that allowed my wife to quit her job when it became too stressful. 

Eliminate the Debt

With a solid emergency fund in place, it’s time to crush your debt! When you have less of your hard-earned money going toward debt payments, you’ll get closer to a part-time work future. 

Starting with high interest debt is best. Eliminating credit card debt from your life permanently will allow you to be more in control of your money. 

You don’t have to stop using credit cards, but you need to commit to paying them off in full every month. If you can’t do that, then you should really only use a debit card or cash. 

Once your high-interest debt is eliminated, start working on the other debt in your life. 

As a couple, we eliminated nearly $50,000 of car debt and student debt in 12 months after creating our budget and really focusing our efforts. 

Invest for Coast FIRE

If you don’t have a pension waiting for you in retirement, then investing is crucial so you can enjoy your 60s and beyond in peace. 

There’s a point in your retirement investing journey called Coast FIRE. This is when you’ve built up so much in your retirement investment vehicles like the 401k, 403b, 457, IRA and HSA that you can coast to retirement without any further contributions.

After saving and investing $500,000 by 40 years old, my wife and I hit this Coast FIRE milestone. It allowed us to drastically slow down our retirement contributions because, with time and compound interest, our retirement balance has the ability to grow to nearly $3,000,000 by the time we hit 65. 

That’ll be plenty for us to live on. 

Without that financial worry, we have been able to use our money for other financial goals. 

Pay Off the Mortgage Early

When you’re not worried about retirement investing anymore, you have money to eliminate your mortgage!

Can you imagine the largest line item in your budget being completely eliminated?

That’s what we did! We paid off our $500,000 house in less than 5 years

Now we own it outright and make no payments to the bank. Yes, we still have to pay property taxes and house insurance, but our overall expenses dropped by over $15,000 per year. 

When life is less expensive, you can more easily go part-time. 

Transition One Spouse to Part-Time

Part Time Work at 40 - Relax

By this time, the gap between your income and expenses may be quite large. For us it was, there were periods of time when we were saving over 50% of our income!

At this point, you can double down and grow your wealth even more … or you can slow down, work less and go part-time. 

If you’re nervous about you and your spouse doing this at the same time, try one spouse first. 

That way, you’re dipping your toes in the water of part-time work. This could be something you negotiate at work or perhaps a sabbatical is a possibility.

Get Used to Living on Less

At this point, you’ll have less income coming in. But with your higher savings rate, you’ll just have to save less. 

For super savers like me, this was a tough decision. At first, going from 50% to 10% savings felt like I was doing something wrong. But over time, I saw that I had more time freedom working part-time and that meant more options to pursue my passions and be with my family. 

Without debt, a mortgage, and creating our pension through Coast FIRE, our family can comfortably live on between $50,000 – $70,000 per year. 

So if we’re both able to make $3,000 per month after taxes, part-time work can be our reality for the remainder of our lives.

Have Your Other Spouse Join You Part-Time

Over time, you can get used to living on less. It becomes a part of your lifestyle to live frugally and embrace the free and inexpensive things in life. 

At this point, it’s time to bring your spouse along with you on your part-time work at 40 journey. 

You both have the choice of the part-time work you do at this point. 

  • Are you able to work part-time at your current employer?
  • Do you want to pursue a small business?
  • Is going back to school an option so you can work in another industry? 

This is a part of the dreaming process you and your spouse can do together. Before you fully transition, make sure you practice living on the lower amount of monthly income. Your ability to live on less will give you the freedom to say “yes” to part-time work at 40 (or earlier!). 

Spend More Time Relaxing and Enjoying Life

Once you’ve transitioned from full-time to part-time work, you’re going to have a lot more time available. 

If you go from 40 hours to 20 hours of work, you’ll have 1,000 more hours available to you each year. And if you keep this up for the next 20 years of your life, you’ll have 20,000 more hours or over 2 FULL YEARS of time!

You are quite literally buying time by doing this. 

This is 20,000 more hours to relax, make memories with your family and pursue work that matters to you. 

Final Thoughts on Part-Time Work at 40 Years Old

I’m passionate about building generational wealth for my family. While working more hours might bring more money to our family tree, I believe more time is actually more important. 

Time to goof around with my kids, time to go on a walk with my wife during the week, and time to spend with my parents as they get older. 

Time is our most precious resource. And as families, if we can all get to a place of financial security PLUS part-time work, I believe that’s how we can own our time. 

At least, that’s what our family is trying. 

Do you think it's possible for you to only do part-time work at 40?  Are you considering this for your family life?

Please let us know in the comments below.

Andy Hill

Andy Hill, AFC® is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and relaxing on his hammock.

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