News: What's the real cost of going to office for work? Find out-14-04-2020
Updated On: Apr 14, 2020
When you consider a new job which appears to give you a higher paycheck, identify the hidden costs that could derail your dreams of saving for your new house. Here’s what you should look at.
By Devashish Chakravarty
To earn your salary, you put in hard hours at work and compromise your peace of mind. But have you ever considered that going to work is also a financial drain, The current lockdown would have reduced your expenses which will help you figure out what it costs you to hold down your current job. which appears to give you a higher paycheck, identify the hidden costs that could derail your dreams of saving for your new house. Here’s what you should look at.
1. Away from home
Do you have a job in a city or country away from family and home? You are running two households while spending money to join your family often. Renting an apartment, paying a deposit, acquiring furniture and appliances, an additional personal vehicle and regular household expenses may take away 30-50% of your pre-tax salary.Add to that inter-city/ country travel costs including airport commute and peak ticket prices when you book at short notice. Suddenly you have no money left at the end of the month. Reconsider the costs and benefits of working and staying in the same location.
2. Commute
What is the real cost of your commute? You may spend money on the metro, bus or a cab and that is simple to calculate. However, if you have your own car, calculate the total cost of ownership. Did you have to buy a more expensive vehicle commensurate with your status? To your monthly EMI, add fuel costs, car wash, insurance, taxes, maintenance, repairs and the driver’s salary. The bill could go up to 10% of your income. To bring down costs, revalue job opportunities closer to home, consider moving closer to work, explore working from home for a few days a month, use flexi-time to commute in off-peak hours, opt for a bus/ metro, try carpooling and consider a fuel efficient car.
3. Fashion
Fashion is the last of the direct costs of a job. You need good clothes to go to work. Check out your wardrobe. Do you use most of your work clothes for personal wear? Now add the cost of work shoes, accessories and your expensive cell phone. Add the cost of drycleaning, stitching/ re-fitting and costs of personal care, including salon visits.
4. Food
Lifestyle changes comprise a big chunk of the indirect costs of going to work. Food is the largest expense here as your choices change in professional and personal spaces. At office, you may have a tendency of ordering food and coffee or heading out for a meal with or without colleagues. While this is easier to track and control, also consider the number of times you have ordered food at home or purchased a frozen or pre-cooked meal because you were too tired to cook.you are more likely to buy groceries from a store that’s convenient than one that’s cheaper. Take home-cooked meals to work, shop and pre-cook on weekends to reduce costs.
5. Dependants
Your choice of work impacts children, elders and pets at home thus shrinking your budget. With two working parents, childcare become a major cost via play-school, at home maid, unnecessary tuitions or after school programs to keep them safe and busy, and a summer camp to occupy them away from home. Elders may require paid caregivers or a driver and car. Similarly, pets may require care or meals in your absence or when you are traveling. Thus, a lesser paying job that has remote working or flexitiming may offer surprising cost benefits.
6. Wellness
Responsibilities and deadlines at work are possibly the biggest contributors to your daily stress. It means you will spend more on consuming discretionary de-stressing or entertainment activities like going out, shopping, sports, hobbies, travel or meeting people.Also, your health is impacted when you commute in a polluted city, work long hours or in an unhealthy environment. Your lifespan, life quality and wellness reduce, thereby increasing your health costs. Healthy eating, regular exercise and meditation are your best bets here.
7. Upskilling
You found your first job because you possessed the required graduation certificate. While past education is a sunk cost that contributes to kick-starting your career, your subsequent jobs are linked to your experience and skills. In your industry or function, you may find opportunities to study and acquire skills that will help you progress at work. Thus, upskilling is a cost you bear especially if you need a certificate. To defray this cost, negotiate training and upskilling with your current employer or when you are changing jobs.
8. Taxes
To paraphrase Benjamin Franklin—nothing is certain but death and taxes. Though you are aware of taxes and its impact on your take home salary, your choices make a huge difference. Firstly, restructure your salary with your employer to minimise tax outflow, keep track of changing tax slabs and surcharges and plan out your annual investments and expenses in advance.Secondly, consider working in a contract role where you can expense some costs. Finally, consider job opportunities in low or zero-tax countries where your savings can be substantial if you can budget for a low cost of living.
