5 things no one tells you straight but you wished someone did (#3)

3. What you’re paid is not what you can spend

By (CC) Tracy O from Flickr

Its always a thrill to get money. That’s life and a very enjoyable part of it. However some folks miss the gap between getting money and actually getting money. Let me explain.

You sign your new employment contract and are very happy with the large number, say $120,000. Careful now. That number is the total for 12 months from now but your mind is only thinking about the weekend coming up. Knowing that you make $120,000 a year doesn’t mean you should go out and sign a $10,000 down payment agreement on that 3-pointed star.

A not-so-insignificant amount of your salary goes to paying not-so-insignificant costs of living. Here’s a general list;

• Rent / mortgage (10-33%)
• Internet / Utilities (5-10%)
• Transport (5-10%)
• Taxes (10-20%)

The percentages will vary depending on where and how you live, but overall you’ve got to account for these expenses. Even with the lower numbers, you’re looking at about a 30% gap between the number on your paycheck and number that’ll show up on your bank balance at the end of the month. And all this is without insurance and any other deductions from your company!

So there really is a difference between your salary and exactly how much of it you can actually spend.

After I got my first paycheck, I bought a fancy briefcase which I initially figured to be about 3% of my pay. Now as I look back, taking in to account the list above, that briefcase cost me 10% of my money after expenses. That bag is now in a storage box!

Lesson: Be sure you know how much exactly you’re getting in your hand before splurging.

Another lesson: No briefcase is worth 10% of your pay!

5 things no one tells you straight but you wished someone did (#4)

By (CC) Darren Hester from Flickr

4. What’s cool today is NOT tomorrow!

Remember the time in your 2nd year when you thought that guy on the 2nd floor of your hostel had a ‘cool’ tattoo of a mermaid around an anchor on his forearm? Forget it if you do.

Tattoos aren’t cool, especially when you’re 36 and sitting in your interview for that vice president position. For that matter few things are cool over time – be they tattoos or haircuts or bikes or phones or whatever else.

The world is always changing and together, people’s preferences are changing as well.

A friend once paid a lot of money to get 5-button suit (yes, you read right, 5 buttons on the jacket!) after seeing a few basketball players on TV. He wore it to another friend’s wedding reception a few months later and was shocked to find found out that jackets weren’t in season! That high-priced jacket now serves as a high-priced space occupier in his wardrobe.