Perceptions of true income
Hello fellow Protagonists,
So, now you have seen the title and decided to give this post a read, which option would you rather take?
Make a decision before reading on. I wonder which one you are going for?
£12.50 is just about enough a week to buy my Friday night chippy tea for two... As long as nobody wants fish. When you really think about it £12.50 does not go far in the UK today.
So does this mean that the £1000 salary increase is the better deal? It must be.
A brutal moment in my life gave me the answer to this question.
I vividly remember a young 21-year-old Warrick stomping upstairs to the HR department of my first job. The financial year was at an end and we had all been informed that we were moving up to our next pay brackets (as long as you were not already at the top of your pay-bracket, which I certainly wasn't).
I was so excited at the time. It was my first ever "pay-rise" and I couldn't wait to see my next payslip.
The march to HR was to complain that my pay-rise had not been received. I was new into the role and I thought that they had just forgotten about me. It happens.
It was far worse than that adventurers.
I was politely informed by the HR manager that I had indeed received my pay-rise. At first I explained that this could not be the case.
It was the case friends. It was just so small that I didn't notice it.
I had missed the few beans that had moved across on the abacus.
On the walk back to my office I remember feeling pretty knocked back and thought about how this pay rise wasn't going to change my lifestyle much at all. Maybe I could eat out once more a month - from the set menu - with no drinks.
This situation completely depends on each individual but I quickly learned that after the taxman, student finance and company pension contributions got their sausage fingers in my pocket, I was not left with much more at all after a bump up a pay-bracket.
From experience I was starting to learn that after a £1000 pay-rise I would receive roughly around... Wait for it... £50 extra a month. Or around £12.50 a week.
Some people may pay more or less into pension pots, not have student loans, or be in different tax brackets. This will change these numbers slightly but the premise is still the same. Also, I am not saying that paying into a pension pot is necessarily a bad thing and is technically still your money, kind of, maybe, perhaps.
Pay increments in the thousands feel like a lot at the time but what we are not taking into account is what this means monthly for our True Income, which is basically what we have left in our pockets.
This can sound disheartening at first but we can also flip this statement around. If I receive £12.50 a week from a £1000 pay-rise, then if I can find a way to get an extra £12.50 cash into my pocket each week, this is like receiving a £1000 pay-rise.
Obviously if we earn enough money on a side hustle or second job we probably still have to pay taxes on it but think about this for a moment.
A relative gives you £15 as a gift, that is your £1000 pay-rise for that week. Show some gratitude
You sell something you never use online for £25, that's two weeks right there
You trip over and find £10 under a park bench (you never know)
Your friend bets you £15 that you can't gargle the alphabet with a mouth full of vinegar. Cheers for the pay-rise bud
You get the point.
The same applies for buying things that are £12.50. A £12.50 t-shirt is not the most expensive out there but it does equate to spending your £1000 pay-rise for the week.
This also means that if you find out that your colleague earns £1000 more than you, by all means have the chat with your boss if you can prove you are worth it as well, though your colleague's life is pretty much exactly the same as yours still.
Cash in our hand is king and can be worth more than we realise.
I don't know about you but I will be taking 2021 £12.50 at a time.
GLHF (Good Luck Have Fun)
Warrick
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