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The Real Cost of WorkAssessing Your Cost to Work by Glynnis Whitwer
Before you start, gather pertinent information like pay stubs and receipts of expenses if you have them. Sometimes your check register can work just as well if you record debits/ATM transactions as well as checks. There are some great calculators on-line that will walk you through this process, but an old-fashioned pencil and paper work great too. Crown Financial Ministries’ website www.crown.org offers an easy to understand cost-to-work calculator. Check under “Tools” on their home page. As we list expenses, create a worksheet for yourself. It should look something like this: Annual Salary $20,000 (monthly $1,650)
Net spendable income $1,058
Real Bring Home Pay $213 Step One – Determine Your Net Spendable Income The first step involves identifying your net spendable income. I think it’s easier to work on a monthly basis, so start by finding your gross monthly income. Your gross income is how much you make before taxes or any other withdrawals, such as insurance or retirement investments. Then you’ll need to subtract some non-negotiables. There are four main expenses: federal tax, state tax, social security tax and our tithe back to God. The first three should be found on your paycheck stub. When you have subtracted taxes and tithe, you will come up with your net spendable monthly income. This is what you have left to spend on the expenses of life. Step Two – Identify Work-Related Expenses As you work your way towards your net income, the next step is to identify your work-related expenses. These are expenses you would not have if you were at home, such as childcare and commuting. Childcare Include any money spent to a daycare, after-school care, extra babysitting at night for work related functions, etc. Transportation Not only do you spend money on gas, but there’s extra wear and tear on the car, tires, extra oil changes, and possibly increased insurance depending on the length of your commute. Meals and snacks during work Include coffee breaks, vending machine purchases, lunch out, dinner or after-work gatherings with friends. Clothing Try and estimate how much you spend annually on clothing, uniforms, shoes, pantyhose and jewelry that you wouldn’t normally buy for everyday wear. Then divide that number by 12 to get your monthly clothing expense. Dry Cleaning Include dry cleaning and laundry services. Personal Grooming/Services Consider the cost of personal supplies and services such as professional manicures, acrylic nails, pedicures, make up, and perfume or cologne. Is your job so stressful that you need a massage or chiropractic adjustments? Include that too. Business Gifts Ah, the office gift for the boss! Or the Christmas gift exchange, baby shower, wedding shower, and birthdays. The list goes on. Step Three – Estimate Expenses That Could be Avoided by Being Home Some expenses are hard to nail down as directly related to work. You might not be able to list these out when you put together your cost assessment. But if you can, then by all means, include them in your list. Home Maintenance Do you pay for the help of a housecleaner, gardener, handyman or painter. Consider what tasks you might be able to assume if you had more time at home. Meals Out You can probably figure out the times when you might have eaten home if you had more time or energy. Then, estimate how much you might spend in a month. Another work-related expense is having your kids buy their breakfast and/or lunches at school or day care. Guilt Gifts to Children These guilt gifts might take the form of actual gifts, such as a “little something” picked up on a business trip, or extra-large or multiple gifts at birthdays or Christmas. More money can be spent on special outings that you otherwise might not take, just so you can spend time together without interruptions. Increased Health Care Costs It’s just the truth that children exposed to sick children get sick. And, sick children sent to daycare or school, stay sick longer. Sometimes, the stress of balancing home and career are too much for adults, and their immune system is weakened, resulting in increased health problems. This category is difficult to assign a dollar amount, but it’s worth considering as you count the cost of working outside the home. Miscellaneous List professional dues, extra education, or workshops you need to attend. Consider if you have to purchase books, special electronic equipment or maintain your own cell phone or beeper. There are all kinds of little expenses that pop up throughout the year. The Final Step When you’ve got a list of all your monthly work-related expenses, add them up and subtract that number from your net spendable income. This is what you really bring home from your job. When you look at that number, you have to decide how you are going to make it up once you are home. You might discover that you can save that amount by shopping smarter or reducing expenses by moving to a smaller house or apartment. You may be able to eliminate some debt before you quit, and realize that you don’t need to make it up at all. Another option is to make money from home. ----------------------------------------
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Whether you are married or single, the first place to start in making the transition home is uncovering the real cost of work. When you take a detailed look at work-related expenses, you’ll discover if you can afford to live on one income, or you’ll learn what you need to make from home to replace your net income.