Doing my taxes this year was an interesting experience. In 2008, my income was down substantially as compared to 2007 – no real surprise, considering I quit my full time job in March 2008. What was really surprising for me, though, is that our family’s spending dropped almost as precipitously.
Across the board, expenses were down. Way down. We spent less on food. We spent less on gas. We spent less on entertainment expenses. We spent less on child care. We spent less on travel. We spent less on clothes.
In short, our spending dropped enough in 2008 to almost make up for the drop in income.
For a while, I puzzled over why this happened. Were we simply getting better at frugality? Or was quitting my job really contributing that much to our spending changes?
When I started to break it down into smaller pieces, though, it became clear: my previous job was loaded with extra expenses – and yours may be, too. Not only were there financial costs, there were significant time costs as well, which would keep me from being able to do things like prepare a home cooked dinner.
Potential Hidden Costs of Your Job
1. The commute
It took me about twenty minutes to drive to work, then twenty more minutes to drive home, even without any extra stops or interruptions. Not only that, each round trip put about 30 miles on my pickup – two gallons of gas and that much closer to oil changes and other maintenance. The day-in and day-out grind of this was pretty intense – I’d lose about four hours of time each week on the road, plus $20 in gas and the cost of vehicle maintenance on top of that.
2. Decompressing and escapism
After arriving home, I usually needed half an hour or so to decompress. I’d watch something mindless on television or do something else that just ate time until my wife and kids would arrive home. Without that decompression, I’d usually be rather grumpy for a while early in the evening. Not only that, I often spent money on escapism – golfing, trips, and so forth. My daily commute would often take me right by a bookstore, where I would stop and spend money two or three times a week, as well.
Although my day-to-day wardrobe for work was pretty casual, I did need to invest in reasonably nice clothes, particularly for the regular presentations and business trips I was called on to do. Not only did these clothes have a cost, I also had to invest the time in shopping for them.
Many days, I would eat breakfast and/or lunch out with coworkers, probably twice a week for each meal. Also, because so much of my time was eaten up by other tasks, we would go out to eat for dinner much more often than necessary – two or three times a week. Now? I eat all my meals at home save perhaps one meal a week – and, surprisingly, the time evens out, since I’ll often just run downstairs and have a plate of leftovers for lunch.
5. Social events
With my previous job, there were fairly regular social events in the evenings and on weekends that were practically required. These usually involved a couple hours at a pop (at least) and often involved an expensive meal as well.
In the year since I left my previous job, I’ve lost almost fifty pounds. Why? I’ve been eating better, I suppose, but a big part of the equation is simply a big reduction in stress. I would get ill every month or two with a stomach bug or a cold, whereas I’ve only really had one or two illnesses since I left that job. Again, I put the blame on stress.
My previous job involved multiple trips each year. These trips were usually all business, all the time, which meant time away from my family and the things that mattered to me most. Even worse, these trips were often loaded with little expenses – though some of them could be deducted as an expense, many others were simply out of pocket.
8. Missed moments
On one trip, in January 2007, I found myself in a San Diego hotel room, listening over the phone as my wife told me about my son taking his first steps. On another trip, in February 2008, I missed out on my daughter’s first tooth sprouting through and my son’s first successful potty training day, something he was incredibly proud of. I often felt as though I was missing big parts of my children’s life.
These are real costs of many jobs – the kind of costs that aren’t really considered when people think about their careers. Quite often, that nice salary – when the extra costs are removed and all of the extra hours are rolled in – isn’t all that nice, and you find yourself wondering if there isn’t something better you can do with your time.
Spend a few minutes figuring up the time and money costs in each of these areas for your job. When you subtract that money (and the taxes) from your take-home and add on the extra hours, does it really feel as though your job pays you well?
One way you can make your job pay better is to seek ways to reduce each of these costs. Here are some tactics for each category.
Tactics to Trim the Costs
1. The commute
Carpool! Find someone who lives near you that you can share a commute with. If that doesn’t work, see whether or not you can take advantage of public transit. In either case, you can then use the commute for decompression or for getting a start on your work day.
2. Decompressing and escapism
Focus on the things that make you feel good without spending money – or, even better, are actually productive in and of themselves. For me, cooking is often cathartic, as is reading.
There are lots of little tricks to maximize your personal appearance dollars. The best technique is to invest in a high-quality “mix and match” wardrobe – a small number of very high quality items that can be mixed and rearranged in a lot of ways, creating an impression of having a diverse wardrobe without the cost.
Take leftovers every day. If you’re in a situation where you have to eat with coworkers, eat minimally with a salad or something like that, then eat your leftovers later on in the day if you’re still hungry.
5. Social events
For the cost of such events, just eat minimally and cover your own bill – a salad and that’s it. You can eat more later. For the time you’re there, maximize it by getting to know as many people as you can – don’t just fade into the woodwork or the time really is wasted.
Eat healthy items as much as you can – lots of green, leafy vegetables and plenty of water, for starters. Try getting some exercise, starting with a simple at-home routine that at least gets your body moving and your breathing a bit heavy (in fact, this can be a good “decompression” activity).
When traveling, maximize every moment. Talk to and get to know as many people as you possibly can on that trip. Make it your goal to eat a meal with as many different people as possible. The more strong contacts you can build in your industry, the stronger you make your career. As with social events, it only really becomes a loss if you fade into the woodwork.
If you can reduce costs and time investments – and increase the value of the time you do invest – you increase the overall value of your job and you put more money in your pocket.