What are we looking for from work? Well the main reason is obviously, to make money. But it’s not just that. Money is a means to an end, but many of us seek job satisfaction. From befriending colleagues to getting ahead in our careers, it gives us a sense of self-worth.
One thing that we’re increasingly realising though, is that this comes at a cost. Sure, it’s not even comparable to being unemployed, but if you’re wondering why your bank account is suddenly dwindling, it could be down to your job.
Not sure what we mean? The average UK worker spends £263 a month on work – that’s a sixth of their salary.
Recognising these costs will help you be aware of your spending, enabling you to take steps to reduce them.
Good news for both you and your bank balance!
Your salary uncovered
When we excitedly accept a job offer, we all know that the agreed salary isn’t what we’ll actually be walking away with by the end of the year.
The reason? Tax, national insurance, student loans, pension schemes…
The average UK salary is £26,500. However, the base rate for having to pay for the above schemes is much lower. Once you’ve taken these outgoings into account, you’ll soon realise that a significant proportion of your wages will be lost every month, before they have the chance to enter your bank account.
The best way to budget for this and see how much money you’ll be taking home at the end of each month is with this salary calculator. It will work out how much you owe in terms of tax, national insurance and student loan; and you can add in (optional) additional extras like your pension scheme and childcare vouchers. From there, you will be able to set yourself a budget and determine how much you have left to spend, and how much to save.
Unfortunately for workers across the country, these aren’t the only costs of your employment. There are other factors that soon bump up your spending, without you even knowing. Nevertheless, with a little time and planning, these can be reduced.
The cost of just getting to and from work can be very expensive – whether you use public transport or have a car.
When it comes to cars, it’s not just petrol you’ll have to pay. Alongside your insurance and MOT, if you work within a city boundary, you may well have to pay for your parking space too.
So public transport is much cheaper, right? Well, not so much. Catching the train into work is particularly costly, with rail fares increasing by 25% since 2010 – almost three times higher than the 9% increase in wages.
You’d think with such high costs, you’d have a relaxing ride to work, where you can clear your thoughts or maybe catch up on some sleep. Not the case. Most rush hour trains are overcrowded, with commuters forced to squeeze close together in the aisles. In fact, rush hour trains in Manchester regularly work at 86% above their capacity – should we really be paying so much for that kind of experience?
Reading to London Paddington is one of the most popular commuter routes. It’s also ridiculously expensive. A return ticket in rush hour will cost you £45.80. Five of those will set you back £229 – who has that kind of money to spend on public transport?
Whilst London prices are highly inflated, transport costs remain high across the rest of the country. A return ticket in rush hour from Wigan to Manchester is £18.60 a day – that’s £93 a week.
One way to cut down on those steep transport costs is to invest in a season ticket. The longer the season ticket is valid for, the less the costs are overall. A seven day season ticket for Reading to London Paddington costs £106.10. It’s still a crazy amount of money, but what’s even crazier is that you’d be spending £122.90 more if you bought your tickets individually.
If you have the money upfront to pay for a 12 month pass (which, at £4,228, not many of us do), the amount you’d save is even higher. With 52 weekly tickets totting up at £5,517.20, a 12 monthly pass will save you £1,289.20 over the year.
It’s a trend seen across the rest of the country. Purchase a seven day season pass from Wigan to Manchester for £27.90, and you save £65.10 a week. Savings are higher if you opt for the 12 month pass. At £1,116, it’s a lot to pay upfront, but that’s an extra £334.80 in your pocket over the year.
Whilst the cost of commuting by train is extremely high, there are ways to save. Plus, there are other modes of transport which are much cheaper; that perhaps you’ve never even thought of.
If you live close by to your colleagues, it may be worth enquiring about a carpool scheme. Essentially, a few of you would share the driving (and the costs!), making it much cheaper to get to and from work.
Alternatively, if you’d like to combine commuting with your exercising regime (and you don’t live too far away!) why not cycle or walk to work? The initial cost of the bike aside (which is probably a couple of hundred pounds), both of these methods are absolutely free, and will help you to stay fit and healthy - a perfect way to get fit for free!
You may find that your company is part of the Government’s Cycle to Work scheme. If this is the case, your company will pay for the cost of your bike upfront, and you’ll pay them back on a monthly basis. The benefit? You won’t have an upfront expense to pay in one go. Find out more about the cycle scheme here.
Your work wardrobe can leave a dent in your bank account, especially if you’re just starting a job. Whilst some companies allow their employees to wear whatever they like (within reason!), many have smart dress codes that need to be stuck to.
Research has shown that this affects women in particular, who will often spend a fifth of their salary on workwear each year.
Again, it’s another essential expense. Appearances count, as they make impressions, and you need to make a good impression at work. A survey of corporate hiring managers has gone as far to show that promotion and hiring decisions are affected by the way we look.
Whilst there’s a correlation between looking and dressing professionally, and exciting work opportunities, there’s a balance that can be struck without you being completely out of pocket.
Plan your work wardrobe accordingly. Be honest about how many clothes you really need for work, making sure you can mix and match your clothing. For instance:
- 3 x pairs of smart trousers
- 5 – 8 x shirts
- 2 x pairs of smart shoes
- 2 x pairs of smart trousers
- 2 – 3 x smart skirts
- 2 – 3 x dresses
- 8 – 10 x smart tops
- 2 x pairs of smart shoes
Mixing and matching your outfits will give you a varied wardrobe, and means you won’t go overboard on the spending.
We all get bored of our clothing every now and again, and there’s nothing wrong with investing in a few classic pieces. The key is to think about what you need, instead of grabbing half of the stock at Zara and heading straight for the till.
Set yourself a budget - £50 will more-or-less cover the cost of one new item a month. Make sure that your new purchase coordinates with the rest of your wardrobe. Lusting after a navy dress when your cardigans are all black? It’s probably best to get the grey version instead.
It’s important to remember that you can still look smart on a budget – you just need to plan your outfits.
If you’re desperate for a splurge, wait for the sales before grabbing those work bargains. Be wary of those discount temptations. Ask yourself if you would have bought the find were it full price? If not, leave it.
Feed your early morning coffee fix with a Starbucks every day? Find yourself rushing over to the nearest supermarket for a ready-made sandwich each lunch? Spending a couple of quid here and a couple of quid there may not sound like much, but it soon adds up.
Your cappuccino addiction could be costing you around £12 a week, and five days of shop-bought sandwiches soon add up to approximately £25. Packing your own lunches and making drinks in the office instead, will soon save you a small fortune.
There’s nothing wrong with a treat every now and again, and we certainly shouldn’t deny ourselves! It’s about balance.
Brands know the importance of loyalty, and like rewarding their customers, so take a look and see what deals or discounts they offer. For instance, Caffe Nero offer stamp cards where customers can get a free drink, and Costa cards allow you to save points in exchange for free food and drink. The savings may be small, but they soon add up… and there’s nothing like a free slice of cake to brighten your day!
If you work in a big office, it can seem like there’s always a birthday, last day or retirement taking place, and we all know what that means: a collection fund that will find its way to your desk, while the fundraiser expectantly watches you empty your wallet.
As a nation, we’re uncomfortable discussing money – 51% of people don’t like discussing their wages with colleagues. And who wants to explain they’re running short at the end of the month, and could do with that extra £10, instead of putting it in a colleague’s present fund?
Rather than rushing off to the toilet to avoid paying – and hoping no one cottons on! – or claiming you don’t have any cash on you (even if you only ever pay by card, you can’t help but think that no one believes you!), be firm.
If you work for a small company, you’ll inevitably get to know everyone and build relationships. But for larger businesses, it’s a different story – you may not even know half of your colleagues. Realistically if the collection is for someone you don’t know, then there’s no shame in not contributing. Other people will understand, and they would do the same.
If it’s for someone you do know and get on with, set a budget. If you’re working for a small company, it’s something you could raise with other employees, as they’re probably stressing about the same things.
You shouldn’t be embarrassed about putting a few pound coins in the latest collection when there are £20 notes in there. Everyone is on a different salary, some people will have more outgoings, and some will have more money to spend. No one will judge you.
Alternatively, why not offer to buy your colleague a drink after work instead? At least you’ll know they’ve enjoyed their present!
This leads on to the final cost of employment to consider: socialising.
A quick drink down the pub after work one night will only set you back a couple of pounds, but three or four drinks soon add up – especially if it becomes a weekly ritual.
If you’re torn between going out, and needing to save your money, you have some decisions to make. If you don’t want to miss out, order a glass of house wine instead of the expensive stuff; or switch it for a soft drink instead.
If colleagues are going out on a weekly basis, it’s unlikely everyone will be going out every week. It’s natural that people have other commitments, so don’t feel like you need to be at every gathering. Going for a couple of drinks every fortnight, or once a month means you can still have a good time while cutting back on your spending.
Ultimately, if you enjoy spending time with your colleagues, then money spent socialising is well spent. Don’t turn down every opportunity to save a few quid when you’ll be stuck at home wishing you’d stayed out. Making friends and enjoying relationships is a sure sign you’re on your way to job satisfaction, and that’s definitely worth more than an extra £5 saved!
We all know that most things in this day and age aren’t free. Once you’ve identified your high spending areas, with a little time, effort and planning, you can cut down the costs. Be clever with your money and enjoy your life, both in and out of work.
Remember, do not buy what you can’t afford, and think carefully before taking out a loan for any non-essential purchases.
All information was correct at the time of writing.