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Can You Afford to Work? |
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By
Janet Farley
Spring 2006 Print |
Your salary looks impressive,
but after paying for child care, transportation, and other
work-related expenses, how much of it is left?
Work. You do it because you
have to, because you want to, or for reasons that lie between the
two. One thing is certain: It’s not always about the money. A recent
RAND study confirms that military spouses are motivated to work for
reasons other than a paycheck. But paycheck or not, can you really
afford to work? It should be a matter of simple math. Theoretically,
if you earn more than you spend on work-related expenses, work is
affordable; if you don’t, then you might want to consider whether
work is working for you.
First, compare your income to your expenses. How much do you earn
after chunks of cash are chipped away for necessary expenses? Below
are some potential salary-eaters to watch out for.
Child care. Even if your offspring are old enough to attend
school, you still will need some type of after-school, summer, or
vacation care. Contact your installation’s child development
center’s central registration office to get a better idea about the
exact cost, which will vary depending on your income and your
spouse’s salary and any special pay, BAS, or BAH received. Most
likely, you’ll be classified as Category V or VI, which represent
the highest payment rates ($432 to $490 a month per child for
full-time care). Depending on where you're stationed, there could be
off-post or off-base options to consider as well.
Transportation. This expense includes not only the
ever-in--creasing cost of fuel to get you from home to work, but
also the insurance necessary to cover you en route (assuming you
have your own vehicle). Other costs for vehicle owners include
maintenance and wear and tear. There’s also the cost of using toll
roads or mass transportation such as the bus, train, or subway.
Food. This expense can balloon faster than your waistline if
you’re not careful. You might go out to lunch with coworkers or
friends or go out to dinner with your family at night when you’re
too tired to cook. Snack-attacks also could mean a mad dash to the
vending machine, which conveniently takes bills in $1, $5, and
sometimes $10 denominations.
Chaching.
Clothing. The cost of a professional wardrobe, dry-cleaning,
panty hose, and general maintenance can be a big expense.
Professional associations. If these expenses aren’t covered
by your employer, subscriptions, organizational fees, and
memberships should also be calculated in figuring your bottom line.
Taxes. Aside from federal and state taxes, the marriage "tax
penalty" can take away from your household’s second paycheck. Or
your salary could propel you into a higher tax bracket.
Coworker costs. Working with others involves social spending.
Whether it’s charitable giving, the monthly coffee fund, or a
birthday party, expect to be hit up for cash at some point.
If it’s actually costing you money to work, but you don’t want to
quit your job, try minimizing your expenses:
- Take advantage of company
benefits. Expenses such as child care can be offset by flexible
spending accounts (FSAs), which offer pretax salary deductions.
If you know how much you’ll be spending on child care in the
coming year, put that money aside before being taxed on it.
- Shop around for quality
child care. Don’t rule out alternative options such as
babysitting co-ops or in-home nanny care. They might be more
affordable than you think.
- Find a job closer to home
or use a more efficient means of getting to work, such as
carpooling. You also could consider buying a more
fuel-efficient vehicle.
- Pack a snack or a lunch to
limit your expensive dining-out days. Prepare workday
dinners ahead of time so you can just pop something in the oven
when you get home.
- Shop sales for your work
wardrobe and accessories. But don’t fudge on quality — a
more expensive ensemble might last longer than the one you found
on sale.
- Belong only to the
professional organizations that benefit you the most. Take
advantage of the local library’s subscription service rather
than buying your own.
- Consult with a tax expert
to see whether you’re doing everything you can to minimize your
liability. And take advantage of your membership perks. MOAA
members receive a 20-percent discount when they consult a
financial advisor from the Garrett Planning Network. (Go to
www.moaa.org/financialcenter for
more information.)
Whether you live to work or work to live, make sure the whole
concept works for you.
Janet Farley is author of
Jobs and the Military Spouse (Impact Publications, 2004) and The
Military-to-Civilian Career Transition Guide (Jist, 2004). She also
writes a career advice column for the Stars and Stripes
newspapers.
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