The Almighty Golden Handcuffs: They are Still Handcuffs, Only Prettier

Summary

The article discusses the concept of "golden handcuffs," where high-paying jobs lead to increased expenses, making career changes or extended breaks difficult, and emphasizes the importance of budgeting, saving, investing in oneself, and avoiding comparisons to others to maintain financial independence and flexibility.

Abstract

The author of the article warns against the trap of golden handcuffs, a situation where high income is matched by high expenses, making it challenging to leave a job for personal growth, family, or leisure. The article advises living within a budget to avoid the accumulation of debt, which is prevalent in society, as indicated by the rising debt levels among Millennials. It suggests setting aside savings to create a financial cushion that allows for job transitions without desperation. The article also encourages continuous self-improvement through skill development, which can be achieved through cost-effective online platforms. Furthermore, it cautions against the influence of social media and marketing that can lead to unnecessary spending and lifestyle inflation, advocating for personal financial management over societal comparisons.

Opinions

High-paying jobs can become traps if they lead to a lifestyle that requires continuous high income, making it difficult to pursue other life goals.
It is crucial to spend within one's means and avoid debt to maintain financial autonomy and reduce the pressure to work constantly.
Having a solid savings buffer of 3–6 months of expenses is essential for a sense of security and the ability to be selective when choosing new employment opportunities.
Investing in personal skill development is seen as a way to increase employability and confidence in one's ability to find new work if necessary.
The author criticizes the societal pressure to spend and upgrade lifestyles, often fueled by social media and marketing, which can lead to financial bondage.
The article promotes the idea of focusing on personal financial health rather than trying to keep up with the perceived success of others.

The Almighty Golden Handcuffs: They are Still Handcuffs, Only Prettier

Seeking higher wages is a natural progression in the career ladder. When higher income leads to higher expenses, you put yourself in a bad spot. Quitting work for a new career change, personal growth, raising children or taking that extended vacation becomes more and more difficult. Golden handcuffs are when a job makes leaving virtually impossible. It can be the company or the industry, such as medicine or law, that creates this unique circumstance. Sure, you might be making more, but the expenses have also grown. Avoid the situation altogether if possible.

Spend Within a Budget

Living within your means is not a very sexy idea. Spending money only if you have it may seem like a novel concept in a society where credit cards are in virtually every wallet. The average 25–39 Millennial in the US, as of 2019, has about $78,396 of debt, reports CBNC. This is up from the average of $49,722 for the same demographic group in 2015. The more debt a person has, the more they are beholden to the idea of constant work. As soon as you can, get rid of the debt. The psychological release of not having a debtor looming over your head is reason enough.

Get started on a budget BEFORE the month starts. Successful businesses have budgets to guide their financial health goals; adapt them for your personal finances. Start with the necessary expenses such as housing, food, utilities, and transportation and work on every bill that you anticipate coming across during the month. Be sure to budget for food in the home and food outside of the house. Review your budget every month to make sure you are staying within your financial means. If you find there is more month than money, that is a good sign that you should make an adjustment.

Set Aside Savings for the Exit

One of the reasons why leaving a job can be scary is that most people need to constantly make money to survive. Having a solid 3–6 months of expenses can make the difference of feeling the need to take any job instead of being selective of the next employer. Saving that amount of money is a whole lot easier if you don’t have tons of debt, just saying.

The simplest way to put aside money in savings is to do it before you even see it. Ask your company if they will split your check into 2 different accounts. If you can’t do that, see if your bank supports automatic transfers you can set up to occur on your payday. Take the thinking out of the equation and pay yourself first.

Invest in Yourself

You are your best asset. When working for an employer, they are really only using you for a particular set of skills. Acquire more skills if you want to attract a wider net. My personal skill set has changed from being a cook, waiter, writer, nurse, entrepreneur, and web developer. I am super confident that if I were to be fired today, I would have another job lined up tomorrow. It is liberating. Just take the time to hone one more skill in the next few months.

Learning a new skill does not equate to spending tons of money in a traditional school. Services such as Skillshare or YouTube are a low-cost option to learn various skills for professional or personal use. There is a plethora of information out there. There is no reason you cannot discover your hidden talent in this modern digital age.

Stop Comparing Yourself to Others

There are times when I think the entire purpose of social media is to compare ourselves to others. Whether it is intentional or not, money is still being spent. It is the job of marketing teams to get you to purchase their product. The best way to get someone to buy something is to touch a pain point. The “us vs. them” is a significant pain point. The thought of, “They have a new car, why can’t I” starts to creep in. Online profiles are not the only place this occurs. Getting that new promotion may come with the expectation of upgrading the lifestyle to match your colleagues. They might have already accepted their corporate bonds, but that does not mean that you have to.

Moral of the story: Don’t try to keep up with the insta-models, maintain a budget, and don’t accept a shackle designed to keep you held hostage.