What you do with money can affect your perception of an ideal salary

It happened again this week. Another person trying to be kind and sympathetic told me that it was a crime how little money teachers make.

It went something like this. Tom is a lawyer who makes a high salary. In casual conversation, it came up that I am a teacher and, as is so often the case, he responded with: “That’s a tough job! I could not handle working with kids and the low salary they pay you is criminal. You are the real heroes.”

I appreciate his sentiment, even if I do not agree with him. I have been teaching for more than 15 years in five different countries, including my home country of the US.

While it was financially difficult to teach in the US, what with taxes, rent, insurance and union dues, it is a different matter overseas. I do not need to get into my salary, but I do not feel underpaid at all. However, I can understand why teachers who make the same amount as me might feel like they are underpaid, and a lot of it comes down to choices.

Let us take my example versus a friend of mine who makes the same salary but has a very different perception about being paid adequately or not. I live a simple life. I do not have children or pets. I try to keep my expensive habits to a minimum and not live a very consumerist lifestyle.

Consequently, I routinely save about 60 per cent to 80 per cent of my salary each month. When you save that much money, it is hard to argue that you are not being paid enough because you certainly have enough to meet your wants and needs, as long as you are not depriving yourself too much.

Saving is a key part of this. If you are saving a large amount, you probably are not stressed about money. You feel abundant because you are literally receiving more than you need to spend. I never have to worry about a surprise bill derailing my life or losing my apartment.

Now, let us look at my friend, Jennifer. To be fair, I have picked a friend who also does not have children because that can be a very different conversation. However, Jennifer does have pets – a dog and a cat. It seems like these animals visit the vet at least every other month and each time, the bill comes to more than Dh1,000. On top of this is the cost of their food, toys and pet-sitting.

Jennifer also loves her spa days and frequently has massages, hair treatments, manicures and other services. This adds another Dh2,000 to Dh3,000 per month to her expenses. Jennifer likes to party more than I do and a normal night out for her can easily run into Dh500 to Dh1,000. She also took out huge student loans to pay for a pricey private university education in the US and now pays a nightmare loan instalment every month.

Even on the same salary, Jennifer is constantly stressed about money, putting things on credit cards, even though she knows the compound yearly interest rate is about 45 per cent for a UAE credit card. If Tom had said the same thing to Jennifer, she would have agreed wholeheartedly. She does not feel as if she makes enough money because for her lifestyle; she does not. This is why the same wage can be both overpaid and underpaid, depending on who receives the salary.

If I can save at least a fifth of my salary and not feel deprived, then I am not being underpaid. Twenty per cent is a good amount of money that I can build enough of a cushion to buy assets, fund a strong emergency account and not feel stressed about finances.

There are other factors involved. If you are constantly stressed and must work more hours than you want, you may definitely need a higher salary to compensate for those circumstances.

When I was much younger, I worked at a fast-food restaurant and earned a minimum wage. It was tough and I was probably underpaid there, even though I did not bring any special skills that made me especially valuable to the job.

I have also worked at terrible schools where they could have doubled my salary and I would not have liked the job any better.

If you are feeling underpaid, try to cut your expenses. Once you build up enough money, you might realise it is not the lack of salary that is making you hate your job, but it is the job itself. At that point, you will have enough money saved up that you can afford to quit the job and take the time to find a better one.