One thing that I was looking forward to after being a student for (17!) years was to finally start earning and saving some money. This was doubly the case because I had read quite a bit about budgeting, but never could really get into it because the key part of it — the earnings — were always zero. Since this was about to change, I was ready to finally start saving some money 💰.
When I first excitedly said this to my dad, he immediately cooled me down with: “Well, you have to remember that once you start a job, everything becomes more expensive.” I didn’t really understand it at that time, and thought that it must be a bit BS, but now I see that it is indeed the case. The lifestyle change of going from student (or unemployed) to working full time really raises the costs of a myriad of everyday things.
Firstly, there are a lot of smaller things that get more expensive because you lose students discounts. This was more noticeable than I thought, even despite my historical lifestyle of minimising subscriptions, which are often cheaper for students. I quickly found out, especially when doing stuff with my still-student friends, that going bouldering, taking public transport, or even eating out are often heavily student-discounted, and I was now on the opposite side, paying more. Well, this is market segmentation, and you should prepare yourself for the fact that a lot more of consumer surplus will be attempted to be squeezed out of you!
Secondly, there are a lot of expenses that come with being an adult, which is the new level you’ve just started. If you’re not living with your parents, it likely means you’ve moved out of uni accommodation and get to experience the housing market first hand, which, apart from gaining a new empathy for characters of sitcoms like Friends or New Girl, means that you’ll be throwing away a huge chunk of your salary on rent. Coupled with the fact that you will suddenly develop a deeply embarrassing feeling when asking your parents for money, rent, taxes, bills and similar all result in quite a lot of your own money spent on things that you wish you could avoid.
Lastly, and most importantly, the biggest contributing factor is that you have less time, and you trade off time for money. You’ll be working for a considerable chunk of your waking time, and be quite tired the other part of it, so in many cases, you’ll opt to pay more to save you time. Whereas previously you would spend hours trying to find the best™ bulk deal on toilet paper on the Internet, now you just grab the one you see first on your rushed grocery run on your way home from work. Where you used to watch hours of YouTube videos on how to fix X that broke, now you just buy a new X.
In fact, this time-optimisation influences pretty much all your decision making, so you either get worse quality stuff for same money, or pay even more money for slightly better stuff. You just don’t have the time to research best products or find deals, so you knowingly go for suboptimal alternatives. Experiencing this myself surfaced a lot of memories from my teen years where I would get so frustrated with my mum (an executive at that time) doing decisions super quickly, where I would spend days researching and finding out the best option. Now I get her.
In essence, I think the goal is to strike a balance between how much you trade your time for money, while still trying to keep your expenses low, developing some good money habits like budgeting, saving, and investing, while still having a fair bit of fun (which can often be surprisingly cheap!) 🙌.