Mr. A and I have had this side job that involves quite a bit of driving for the past three years. We used to do it every single week, 146 miles round trip. But then that part of the route decreased to every three weeks. We were still having to drive places one day a week to do pickups. It was a lot simpler when Mr. A and I worked together in town four days a week and could go by and do the pickups on the way home. But we also only had four pickups back then. It has since increased to nine pickups, scattered all over the month. None of the pickups are less than 16 miles away from home, with more of them being 25 to 66 miles away.
Last week, the person we work for asked if we could take a 20% cut in our pay. I told her honestly to be truthful we were getting kind of sick of it, and maybe it was time for us to let go of the route.
I'm a little bit freaked out by losing this money a month, but Mr. A can make this amount in less than two days time (one day if the work is through his more lucrative yet slower business). He has been having to schedule one day each week to do this route, instead of scheduling for his customers.
It has to be okay. I am sure it will be in the long run, but in the meantime it is frustrating to lose this money, which was dependable money. Mr. A's business is doing good, but it's still a toss up to whether he'll have work steadily or not.
One thing that will be very good for me is that I will no longer have to spend any brain power on this route. It was just one more thing to have to schedule in and remember each week. Now I won't have to worry about that. We'll spend less money on gasoline, and less wear and tear on our vehicles.
Mrs. Accountability
the way I figure it, the absolute most you are making is $31/hour, even if each trip is only 16 miles, and you only spend an hour… a 20% reduction in pay would take you to under $25/hour, and, after taxes, etc., you would be making about $160/month… so, in real value, I would expect that you will see less than a $200/month dip in actual income, especially if you spent more time and drove further…
I bet you make it up very quickly!
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Mrs. Accountability Reply:
June 3rd, 2009 at 5:54 am
That’s what I should have done first! Sat down and figured out exactly how much we’d be losing. The thing is, when it comes to the income tax liability, the dang mileage was where we were making out. I estimated last year’s gross to be $5000 but after mileage we were liable for tax on only $2000 of it. With self-employment income one can expect to pay 30-40% of that. So the tax liability would have been $600 or $800. Anyway, I love your rationale and if I also add in the bookkeeping part of it, and we also had to drive it into the big city to drop it off, that all takes more time. I think I will make a point to analyze it a bit further. Thanks, David!! And thanks for visiting and commenting!
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