By: Ben McEachen
Get a higher paying job, money issues all sorted out.
Sounds simple, logical and beneficial.
Not so fast.
As accountant Pete Burrows explains in the first episode of Season Four of Money: Faith and Finance, you actually might be worse off with more money coming in.
While a higher salary often is a big help, it’s not the magical cure-all for financial woes.
More money, more problems
Pete and his co-host Ben McEachen discussed this money matter in response to a question from regular listener Sherrin.
She described her household situation in Sydney, including two incomes, children, mortgage, bills and saving for holidays.
While you might only share some similarities with Sherrin, you also would have considered being paid more as a tantalising solution to financial strain.
Pete pointed out that an increase in pay, though, can often come with added costs.
“I’ve noticed with my clients, a pay rise in your job generally has tax taken out of it, so you don’t get to keep all of the pay rise.” Pete explained.
“Also, if you’re busier at work and you get a pay rise, you often have to exchange some hours for that. You have to work a bit harder, you might have to work a bit longer, and that might mean your days are longer.”
Alongside tax, time or stress costs can be increased expenses such as paying for more childcare or take-away because you are at home less.
Get more, spend more
When we earn more, we can tend to spend more.
Rather than save or invest the extra income, we increase our budget to get a better cut of meat, fancier bottled water or premium fuel.
Any potential benefit to your financial struggles can be lost in pricier or impulse purchases.
Pete suggested we should aim to increase income at a faster rate than our expenses.
Try to keep spending at the same level it was before the bump in pay, so you are able to put the additional amount into important things which previously were unattainable (such as regular international flights for Sherrin and her family to return to India from Australia).
Any increase in pay is a golden opportunity to re-assess our financial priorities. Rather than spend more, could we be spending less?
You don’t need money to save
There are other ways to help your bottom line than getting a higher paid role.
Pete recommended connecting with community resources and the networks we are part of.
Everything from a local church to council services, family or friends may be an option for offering the sort of support that can cost big bucks.
Without seeking to exploit or manipulate, there could be many forms of assistance already available to you.
Article supplied with thanks to Hope Media.
Feature image: Photo by Emil Kalibradov on Unsplash