What Does it Cost You to Do Your Job?
When comparing two job offers, or a job offer and an existing role, don’t just focus on the salaries - look at the opportunity costs you have to pay to do the work. For example, one of my clients pays less than some of their competitors, but the company offers free food, drinks, a work uniform, free parking, dental & health cover. Maybe these don’t seem like a big deal - but added together they are worth about £3-4k per year for most people - after tax - so you can add another 20 - 30% on top of this in terms of the salary needed to pay for these benefits. Look at the different commuting costs - I now walk to work and, apart from being fitter, only need to run 1 car for the family - saving around £7k per year in terms of car ownership and petrol costs.
You also need to look at non-monetary costs, such as commute time and realistic working hours. As an example comparing two identical jobs where one pays £45k PA for 45 hours a week against another paying £50k for 60 hours - once you’ve removed the tax, what would be your hourly rate for the extra £5k or so you’d get in your pocket? Of course it’s never as straightforward as this, but it’s worth thinking this through as part of the consideration process.
With commute time and working hours - you may want to consider the opportunity cost of these extra hours - in terms of time spent with your family & friends, playing sport, doing hobbies, relaxing with a book etc, or, if you want to look at things from a financial perspective, time you could alternatively spend developing a side project or second income stream, or being more efficient at re-negotiating existing home-budget costs?
The point is, you might find that a job that pays less may actually be as good for you as one that on the surface pays substantially more.