I am close to quite a few people who live a “paycheck to paycheck” lifestyle. They drive nice cars and trucks, have tons of expensive toys, and are paying down hefty mortgages. A few of them have student loans and other expenses on top of that.
One of these friends in particular works for the state, and he goes into panic mode any time there’s even a hint about any sort of possible job loss. He goes through these phases of intense stress and worry several times a year. Even between these phases, there’s a certain amount of constant stress in his life due to his job.
Because of all of this stress, he loathes his job. His way of “escaping” from that job is to spend his paycheck on fun things. He has a very nice motorcycle, two different ATVs, a snowmobile, several 50+” televisions, a beautiful new truck, a set of golf clubs where each club costs more than my entire set, and on and on and on. He’s always eating out or going on weekend trips for golfing or for ATV conventions or to Vegas or something.
Looking at his lifestyle, I can’t see how he doesn’t just blow $15,000 per year on completely non-essential stuff. The total is almost assuredly a lot higher than that.
Now, let’s take that $15,000 a year and invest it over the ten years he’s been working at that job. Let’s give it a 7% annual return. He would now have almost $300,000 in hand. That would be enough to cover his living expenses until he was well past retirement age.
That’s not even the biggest value here for my friend. The biggest value for him would be that within just a year or so of saving at that rate, his job stress would drastically decrease and, within a year or two after that, it would vanish.
So what if he got fired? He would have months – even years – before he had to find another job. He could even start down a completely new career path if he so chose. After all, he’d have the money on hand to do it.
All the time, I see people talking about spending their whole paycheck as though spending money rampantly is some great example of personal freedom. They’ll say things like “you only live once” as they go sign up for another debt or plunk down another fistful of cash on something that’s fun in the moment.
Yet those same people wake up on Monday morning and trudge off to work at a job that they hate, one where the mere hint of losing their job or having their hours cut back fills their heart with fear.
To me, having money in the bank so that you’re not in fear of your boss is a much better expression of the “you only live once” maxim. I have no interest in ever again being in a position where my boss has that kind of power over the day-to-day aspects of my life.
Every single working person out there has the power to put themselves in a position where they don’t have to take heat from an abusive boss and they don’t have to be constantly in fear of having their hours cut back and they don’t have to bootlick or play office politics.
They just have to make the conscious choice to stop spending their entire paycheck.
Most of the time, significant portions of that paycheck are used as salve on the psychological wounds of the workplace (and, often, other aspects of life), and walking away from that salve is often the hardest part. I’m not going to kid you – cutting back on short-term pleasures is never an easy thing to do.
The reward on the other side, though, is incredible. You don’t have to worry about the office politics – just be pleasant to others and get the job done. You don’t have to fear your boss or loathe your job, either – if your job is miserable, start hunting for another one and realize that a pay cut isn’t the end of the world at all. If you want a new career, you can just go for it.
What I’ve found is that when you’re in a position where your paycheck isn’t hanging over your neck like a guillotine, a lot of the little workplace stresses kind of melt away. They just don’t matter that much any more.
If you hate your job, the most powerful response you have to that situation is to start spending less money and building up some savings. If you give yourself the power to be able to change employment without stress, life becomes much easier. If you keep going and give yourself the power to completely reboot your career if you so choose, life becomes easier still.
Buying things might be a nice short term salve, but you still have to go into work and suffer through a stressful environment every single work day. Cut back on buying things for a while and build up some money in the bank and you’ve found yourself a permanent salve.