Your job – how’s it going? Is it just pretty good, but not great? It pays the bills, but you wish you could make some changes at work. Maybe you disagree with some policies, think your boss isn’t making the right calls, or feel frustrated that you can’t accomplish what you want. But you’re down in the hierarchy at work, and you have limited ability to make significant changes. So why are you still there? Well, it’s comfortable, pays well, and change is hard. Besides, you need to pay those bills, right?
Raises come and raises go – hooray, another extra three percent in the paycheck. It seems like they always just get absorbed into your life, and you’re no better off after the raise than you were before.
Lets not forget about bonuses, and tax refunds. The first time you got a bonus, or a big refund, you felt amazing! The possibilities were endless. If only you could get a bigger bonus or other windfall, you’d really be able to get ahead. But now you’ve come to expect your bonuses, rely on them even, and if the company has a poor year you’ll be one of those at the water cooler grumbling. You need that bonus, after all. How else will you be able to pay off your debts, or go on a vacation? Your kitchen and bathrooms could use some remodeling too.
It seems like no matter how much that raise or bonus is, it’s just never enough.
But what if it was?
What if it was enough – and more – to buy you freedom?
Putting Windfalls to Work
This year, instead of letting that raise just get absorbed into your daily spending, pretend you didn’t get one. That’s right, no raise this year, sorry about that. After all, if your company was in trouble and didn’t give you a raise, you’d find a way to get by-right? So figure out your dreams and put this money to work. Maybe you’ll invest in yourself, your family, your dreams, or your freedom. Don’t put this money to work getting more stuff, upgraded stuff, or other things that will just tie you closer to your job.
Take that bonus, tax refund, or other windfall and make it disappear. That’s right, you didn’t get one – after all, if you didn’t get one, you’d manage-right? It’s more important to keep your job. So as soon as it hits your account, go ahead and transfer it right out again. Even if you don’t know what you want to do with it yet, just keep it aside so it doesn’t get spent in drips and drabs here or there.
When you use your raise to upgrade your lifestyle, or your bonuses on stuff or fancy vacations, you’re just letting those golden handcuffs get tighter around your wrists. When you’re on the earn and spend treadmill, you need to keep earning in order to keep spending. You’re running as fast as you can just to stay in place, like the Red Queen said to Alice in Wonderland.
A Different Path
When you’re on the earn and spend treadmill, you’re dependent on your income to sustain your lifestyle. You have almost no control over your job. Even if you’re the CEO, you’re beholden to your shareholders and the board of directors. The larger economy, regulation, or missteps at the top can bring your company down and into bankruptcy, even if you’re stellar at your job. Your entire livelihood is tied to the company. If that company has a bad year but you did a great job – you had a bad year and no raise/bonus for you. If your company makes some bad bets and folds, you’re out of a job. If your department, boss, or the business changes-you and your skills might no longer be needed.
Financial independence gives you a different path. You can do good work for its own sake, whistling while you work. When you hit the “crossover point” as they call it in Your Money or Your Life, you’re “bulletproof”. You disagree with the boss? You can let them know without fear for your job. Your skills aren’t needed anymore? *shrug* OK, time to move onto somewhere that they are needed. Company folds? Just pack your stuff, head on home, and go for a hike-or watch a movie. You can go start your own business, take some time off and work on your hobbies, or travel the U.S.-or the world-and then pop back into paid work when and if you want to.
So don’t let your bonuses and raises just pass by, slipping through your fingers, keeping you on the Red Queens treadmill. Break free of the golden handcuffs by striving toward financial independence a little bit more every day. You’ll find a few of those links breaking every year, the handcuffs getting looser, and that gold chipping off. After some years, you’ll look down and see that under that gold, the handcuffs were made of rust all along. The only thing keeping you cuffed was yourself and your fear of change. You’ll finally tear them apart and you’ll be free to live life on your own terms.
What are you doing with your raise or bonus this year? How will you use it to further your way to financial freedom? Let me know in the comments!
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P.S. I did a guest post today over on the Notorious D.E.B.T – if you have a chance, be sure to swing by and check it out! As of this writing (7 AM EST) it’s not up yet but should be soon.