The following article is from Melanie, our staff writer. Melanie is in the beginning phase of her journey to Financial Freedom and she’ll bring a refreshing point of view for us.
Earlier this week, I read an article that really gave me a lot to think about. The piece, Your Lifestyle Has Already Been Designed hit on so many points that I’ve been feeling, but could never quite put my finger on. The post discusses a long-term traveler’s return to the working world, in the typical 40-hour workweek. He starts to notice that his spending increases, quite significantly, and that he was actually happier and had more money while traveling the world. The general thesis of the post is that the 40-hour workweek is designed with the economy in mind. The author states:
“We’ve been led into a culture that has been engineered to leave us tired, hungry for indulgence, willing to pay a lot for convenience and entertainment, and most importantly, vaguely dissatisfied with our lives so that we continue wanting things we don’t have. We buy so much because it always seems like something is still missing.”
I read this quote again and again. I didn’t want to admit that it has become true in my own life. Having a job is certainly something to be grateful for, but even so, the article got me thinking: How much is your job costing you?
Your Actual Wage
It’s not enough to look at your gross wage, or at your salary package that your employer offers you. It’s important to look at your net income and see what you are really bringing home after all taxes and deductions are taken out.
The first time I did this, I got really depressed. I already work in the nonprofit sector, so I am not well endowed with a high salary. My income seemed fairly good, given the low cost of living. However, when I found out my actual wage after all deductions my hourly wage was several dollars less!
For budgeting purposes, you need to base numbers on what is actually coming in, so knowing your actual salary is helpful.
What are the physical costs of working at your job? Do you sit at a desk all day, which has been proven to be unhealthy and unnatural? Do you do physical labor everyday and come home exhausted? Is your safety at risk when performing your job?
I bike to work as my mode of transportation. Although I love biking, and it saves me some money, I find myself exhausted when I get to work and when I come home. The hour a day of biking, and 8-hours of sitting can really get to me. Although I intended to save money on transportation by biking, I’ve seen a spike in my food spending because I’m hungrier after my bike commute. Think about the physical costs of working at your job. How much is your job taking a toll on your physical health?
Each job has a mental cost as well. As an employee, you are trading time for money. This means if you work hard or slack off, you will still get paid the same. If you run out of work to do, you must complete the full 8-hour day. As noted in the article, the average worker completes only 3 hours of real work per day. While it might seem cool at first to get paid to “look busy” or “do nothing but sit at a desk,” it can take a mental toll on you too.
Perhaps you have a hostile workplace, catty co-workers, or a micromanaging boss. There are a number of ways that your job can have a cost on your mental health, from increasing your anxiety, to lowering your self-esteem, or making you utterly bored and stifled.
There are many additional financial costs to working 40 hours a week; factors we often overlook and deem completely normal. The cost of gas, your vehicle, bus pass, etc, should all be considered if you need to rely on them to get to work.
Are you required to have a special wardrobe for work? That is extra money too. You essentially have your “day clothes” and “work clothes.”
Are you so busy working that you are constantly going out to eat? Attending happy hours or expensive vacations simply to avoid the fact that you have no life outside of work? Are you paying an exorbitant amount for childcare because you have to work? Think about all the ways that your job is directly and indirectly costing you money.
What Are the Alternatives?
I am not trying to paint a terrible picture of all work places and I understand that some people can handle the 40-hour workweek (and dare I say like it) better than others. However, the article really got me thinking. Traditional jobs cost you money — a lot more money than you’d think if you don’t consider the factors above.
I think this is the reason I find self-employment and passive income attractive. If you are going to spend 8 hours a day doing something, don’t you want to have some ownership of what that is? Doesn’t making money in your sleep sound lovely? I am new to the freelance game, and I know it is harder than being an employee. It takes more time and effort — but I like the fact that you can see the results of those efforts, good or bad, right in front of you. I am not savvy on how to make passive income, but I know I could learn a lot from Joe.
As we spend each day living our lives, it’s important to think of the big picture and how each aspect affects the other. If one aspect is affecting another negatively, it might be time to try something new.
Tell me — how much is your job costing you? Do you like it, or are you interested in self-employment and passive income?
Photo Credit: Flickr Kugel