COMMENT
Working 50 Hours A Week And Still Broke?

By Cliff D'Arcy
November 25, 2004

My time as a Foolish writer (almost two years, to date) has been interesting and entertaining.

As well as writing articles for our website, I've written free handbooks on buying mortgages, life insurance, ISAs, getting out of debt, etc. (some of which are still available from our site). I also write our monthly Money Report, which has proved very popular.

In addition, I carry out media work, promoting the Fool and Foolishness on radio, TV and the Press. This may involve, say, an early-morning radio interview on mortgages or a TV appearance to discuss pensions. Most amusingly, I remember standing in a callbox doing a radio interview about buy-to-let investing one Bank Holiday Monday, while a noisy crowd staggered out of an adjacent pub at closing time. That was a challenge!

So my work here is varied, interesting – and often hectic. However, I'm not someone who believes that working long hours is the route to riches. In fact, I'm late for work almost every day and rarely stay late at the end of the day (sorry, Editor!). That's because I learned a valuable lesson in a previous job, which convinced me that long hours and blind loyalty weren't the way to build a secure future.

Some years ago, I had a work colleague who always put in far more hours than I did. She would usually be in the office before me and never left before I did. On average, I reckon that she worked eight hours a week more than I did, which adds up to roughly four hundred extra hours of unpaid overtime per year.

At our annual appraisal, we both received pay rises. I believe that I got 5% and she got 7%. In other words, those extra unpaid hours – amounting to ten more working weeks per year – earned her an extra 2%. This came to about £800 a year more, or around £1.20 an hour extra take-home pay. Yikes!

Rather than earn the equivalent of £1.20 an hour, I continued to go home at my usual time and spent a little time each week putting my finances in order. Here are five things that I did:

• I switched my mortgage to a lower rate, cutting my interest bill by over £1,250 a year;
• I borrowed large sums on 0% credit cards and put this money into a market-beating savings account, gaining an extra £750 a year;
• I shopped around for cheaper home and motor insurance, saving about £300 a year;
• I switched to an online stockbroker, slashing my dealing costs by about £250 a year; and
• I moved my savings to a tax-free cash mini-ISA, boosting my interest by an extra £200 a year.

These gains total £2,750, which is £2,270 more than my colleague's extra pay rise (which came to roughly £480 a year after tax). And, what's more, these tasks probably took a maximum of twenty hours' work. And which makes more sense: putting aside twenty hours a year to get £2,750 more, or working 400 extra hours at £1.20 per hour?

So, please take some time (even thirty minutes each week will do) to knock your finances into shape. It could be the most financially rewarding work that you ever do!

More: Find better mortgages, credit cards, insurance, savings accounts, cash mini-ISAs and stockbrokers.