By Antony Ngatia
Most people struggle hard to get a job — with the money to be paid as a salary being the prize.
How much we get paid is probably the most important thing to most people. But what people fail to realise is that a job, like any other business venture, has its costs.
In businesses, it is called ‘operation cost’ and it comprises costs of transport, employees and other support services utilised to realise profit. Usually, a business man deducts all the costs of every operations from the gross income realised from sales so as to obtain the net profit.
In employment too, personal finance experts say that one should deduct the costs of all expenses associated with their job such as transport from their income to ascertain how much they really make from their business.
“If we sat down and calculated how much we earn and how much we spend most of us would literally ‘shut ourselves down’ for realising how bankrupt we are,” says Fred Omondi, a financial adviser.
Ordinarily, most businesses are shut down when their expenses exceed income, since they are deemed unprofitable. No one wants to stick to a sinking venture in the name of being in business.
“There is a misconception that a person in job is not in a business. But this is not the case, since even they are in business and so they must balance their math like any other business person,” says Omondi.
Doing the math
So, what are these costs?
First of all, we have the commute cost. “Wherever you live and where you work most often is a distance and thus you have to part with some money to and from work daily,” he says.
With costs of everything being sky high, it is likely for one to spend anything from a few hundreds of shillings to a few thousands only on transport daily, depending on whether they use private vehicles or public means.
“Secondly, there is the cost of wardrobe. Having a job, especially the formal ones, means one spends more on nice clothes. Even though some workplaces might have official uniforms, no any self-respecting staffer would wish to be seen clad in one faded garment year-in year-out,” says Omondi.
“Some organisations, like banks, even enforce stricter and expensive dressing codes, which in turn forces one to spend more of their money on clothing,” he adds.
Match standards
Assuming you work at a bank or in a marketing organsation where you have to appear in a suit and a necktie for a whole month, one has to have in excess of ten or more pairs of suits or dresses so as to match with the standards set by your employer.
And even though some items of clothing would not ordinarily have to be bought new every month, it nonetheless adds up to a tidy sum, running into tens of thousands of shillings every year for an average person.
Then there is the cost of lunch.
“If you work in Nairobi or any other big urban centre around the country, you know the cost of a plate of food in a typical average restaurant is nothing less than Sh100,” says Omondi.
“When you add up even the cost of tea or coffees, the lunch bill only totals about Sh3,000 each month. In a year, this can balloon to Sh36,000,” he says.
“If your work takes much of your time, then there is a possibility that you will have to outsource some little jobs that you could do yourself. Thus you are forced to cough a few cents to have someone run an errand on your behalf or have something fixed in your home.”
“The money you have to pay at a day care or a house help to take care of your baby should be counted as the cost of your job, since you could have done it were it not for the job,” he says. Not only that, there is also the “time spent away from home.” According to Omondi, most jobs start at eight in the morning and end around five in the evening. Given the fact that most employees have to commute to and from work, most employee leave their house at dawn and return after dusk owing also to the traffic jams.
Opportunity cost
“If one added up the man-hours spent on account of the job each day, it would add up to around 12 hours. The cost here comes in terms of the opportunity cost; that is that other better use one could put the time into,” he says.
But the most important reason why you need to figure out the cost of your job is because that information can lead to a better life. No one wants to work themselves up only to end up in a poorhouse. Figuring out the cost of a job should help one adjust their lifestyles so that expenditure gets below the income.
Personal finance experts advise that the money saved is no less equivalent to a pay rise; hence it should be saved or redirected to other development projects.
