You’d think taking a high-paying job would mean I would be able to save more money, right?
Well, that wasn’t the case for me. In fact, it was quite the opposite.
This is the story of how my highest-paying job cost me more money than it was worth. And how you can recognize the following four red flags in your own work life.
1. You spend money to combat negative emotions
Negative emotions can easily lead to spending, depending on your money personality.
How often do you grab a lunch out even though you packed, just to get away from your desk? Or go out for drinks with coworkers after work to vent?
My highest paying job gave me constant stress and anxiety. Teammates and I would often go out for coffee just to get out of the negative atmosphere. And I found myself perusing the local boutiques a little too frequently when I was having a really bad day.
Whether your job is causing you stress or a general sense of unfulfillment, you might find yourself spending more money for a pick-me-up.
Spending, after all, is an easy way to get instant gratification – gratification you might not be getting at work. But, done too often, it can seriously harm your budget.
By the time I walked away from that job, I realized that I didn’t save anywhere near as much as I wanted to. So I was miserable and I didn’t take advantage of the pay to reach my financial goals. Lose/lose.
2. You spend money just to get to work
Even if you love your job, there’s a good chance you’re spending money to get there.
For those who drive, there’s your car payment, insurance, gas, and possibly even parking to worry about. And for those who don’t, there’s the cost and time spent dealing with public transportation.
Working parents also face a really significant cost: childcare. According to a survey from CareerBuilder last year, 32 percent of participants paid $250-$499 per month on daycare. And, 26 percent paid $500 to less than $1000 per month.
I’m not yet a parent, but that seems like a huge chunk of money to lose on a monthly basis.
3. You spend money just to walk in the door
Once you consider the cost of being able to get to work, then there are the costs of being able to walk in the door.
While startups and remote companies with their lax wardrobe requirements are growing, there are still a lot of workplaces and professions that require (at the very least) business casual attire.
If you’re a man, that could mean stocking up on work pants and shirts, as well as dress shoes or even suits. Or if you’re a woman, the same goes but with the additional cost of hair, nails, and makeup. Then there’s the cost of dry cleaning these nicer clothes and buying enough to keep your wardrobe varied.
“When asked how much they spend on clothing, shoes and accessories for work in a given year, nearly half (47 percent) spend $250 or more,” according to that same CareerBuilder survey. “[And] nearly 1 in 4 (24 percent) spend $500 or more.”
I’ve been lucky in this area. I threw away my black pants when I left my Wall Street job years ago and now I have the luxury of working from home. But I still succumb to the makeup budget for all those video meetings – which can get costly.
4. You spend money just to do your job
Have you made it this far without accruing high costs? Great! The next step is to understand if you spend money just to do your work.
At that high-paying job I had, I noticed that my laptop mouse was causing carpal tunnel-like pain. I know how it feels because my mom has it, but I hadn’t gone to the doctor for an official diagnosis.
I found a mouse online that was made to help people with carpal tunnel, but that company wouldn’t buy it for me unless I had a doctor’s note.
The mouse was $90. In order to get a note, I would have had to see my general practitioner and then a specialist. That’s two copays of $30 each, for a total of $60.
Then I’d have to take at least two half days or one full day off from work thanks to lengthy subway rides and waits at the doctor’s office.
In the end, I bought the mouse with my own money. My pain went away, but so did $90.
This is hopefully a less common experience for others, as many companies diligently provide proper equipment.
But what about your favorite planners or pens or notebooks? Are those reimbursed? And what if you work for a company doesn’t have the budget to reimburse you?
Teachers have it really rough in this area. Even though teaching pays moderately low incomes compared to other careers (the average teacher in America took home approximately $57,000-$60,000 in 2015, based on the grade level), they also frequently buy supplies for their classrooms.
According to the Education Market Association, as reported in Time, “on average, most spent nearly $500 last year, and one in ten spent $1,000 or more.”
Can you afford to lose $500-$1,000 out of your paycheck just to be able to do your work?
How to stop your job costing you money
Solving this problem doesn’t happen overnight – and it’s not always as simple as tightening your budget. To understand how to rein in the spending, pinpoint which cost is plaguing you the most.
In my case, the spending was almost entirely due to unhappiness at work. While this is a problem that’s growing in America and costing both employees and employers money, I held on to the hope that I could find something better.
So I searched until I did – finding a job that didn’t pay as much but had a culture I could thrive in, both professionally and emotionally. No surprise, I got better at saving money at the same time since I no longer needed to fill a hole created by deep anxiety.
However, if your spending revolves more around the logistics of your job (transportation, daycare, etc.) then your actions might not need to be so drastic. You could ask your boss about working from home once a week, or look into carpooling and shared daycare with trusted coworkers.
The more you talk about your issues with those in your shoes at work, the more creative solutions you might find.
At the end of the day, we all have to spend some money to do our jobs. But it shouldn’t be so much that the pay isn’t worth it anymore. Keep tabs on your spending and the why behind it and you’ll know what you need to do to reach savings goals in the long-run.
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective Sep 1, 2020 and may increase after consummation.