5 Ways Your Salary Is Far Less Than You Think

While I was out of town recently, I started thinking about the true value of the money I earn. Although most of us know our annual salary, how much of that salary is wasted by simple expenses that occur as a result of working that job?

Everything we do in life seems to have a cost implication. By not knowing our daily, monthly and yearly expenses that arise from working, how can we truly be sure of our actual annual salary?

Let’s take a look at the costs that arise from our daily job and look to find ways to reduce them in order to boost up the money in hand we have each month and in turn year.

For the sake of discussion, let’s assume we are talking about a salary of $40,000 + super. Taxes on this salary amount to $5,550 – meaning we have $34,450 as a starting salary.

 

Daily expenses that dramatically reduce your salary

Each day I buy a coffee and toast at work. That is $5 so I can simply get away from my desk in honesty and costs me over $25 per week ($1200 annually on a 48 week work schedule).

Our salary is now $33,250

On top of this, I tend to spend at least $10 per day on food – once again due to laziness of not making at home and wanting to get away from my desk.
That is $50 per week and $2400 per year.

Our salary is now $30,850

Each day I also catch the bus to work (or train depending on how late I am). This costs me around $8 per day, $40 per week and sadly $1920 per year.

Our salary is now $28,930

Each week the average Australian spends a further $30 on alcohol or even more when attending drinks with friends and work.

On this basis we are spending around $1560 on alcohol a year.

Our salary is now $27,370

Assuming we spend a little money on entertainment each week, say a budgeted $50 which is still quite conservative, our salary reduces even further.

$50 a week means $2600 annually.

Our salary is now $24,770

Do you still feel comfortable about your salary?

After doing these calculations for myself, I sure didn’t. Every time I purchased something I would tell myself that is only a fraction of my earnings. In truth, it was much more than a fraction. I was spending far more money than I realised in just simply existing in my daily grind.

Getting a pay rise isn’t so hard now

Do the calculations for yourself, using both the above and other costs you likely have. If you can find a way to reduce just a few of those items, it means thousands more dollars in your hand per year.

A nice and easy way to give yourself a pay rise. As we say at Savings Guide, ‘it isn’t about how much you earn, it’s how smart you are with your money’.