When a Paycut to $600k Per Year Seems Impossible

I read an interesting article in The NY Times that mentions someone who makes $1.2 million per year and is absolutely miserable. He finds his professional life unfulfilling and stressful, and wants to move onto a job that pays “only” $600k per year. But he can’t.

Why? Because his life and lifestyle depends upon the $1.2 million in income. He can’t take a paycut like that.

In fact, his wife apparently laughed at the offer.

Your first reaction might be a sarcastic “oh, poor guy!!!! Only $600k per year! If I made that much money I’d be set!” Or maybe you’re angry at rich people problems. Perhaps you want to play him the worlds smallest violin.

Let’s go beyond that initial reaction, though.

I’ve seen plenty of people stuck in this same trap over my life. The trap of needing to work in a job they hate, that they find meaningless, with people they don’t like, doing things that bore them, for the money. And not for “survival” level money.

I’m talking more about professionals who make a good living, but have little to show for it in their bank accounts. Their lives and lifestyles have risen to consume their paychecks. And by the time they want to make a change – to downshift, to retire, to start a business, or what have you – it’s too late.

They feel stuck.

Today I’ll reflect a bit on finding meaning in your work. And we’ll take a look at the problem of lifestyle inflation and the importance of living below your means at any income.

Lifestyle Inflation, The Insidious Beast

We all know the feeling. Somehow, even if we just got a raise, our spending rises up to meet it. Sometimes it’s regular old inflation-the cost of gas, groceries, electricity, etc. goes up. But often, there’s lifestyle inflation.

You get a bit more income each month, and then have one more meal out. Or you buy more books, go skiing, take some vacations, etc. – and all of a sudden it’s gone.

You don’t really feel as if your lifestyle has gone up that much. But indeed it has, its risen to meet your paycheck. And then you’re stuck in the same paycheck to paycheck cycle you always were. Until the next raise, where the cycle starts all over again.

The most difficult lifestyle inflation problem, that truly locks you in, is usually not variable expenses like eating out, clothing, vacations, or buying more consumer goods. It’s increasing your fixed expenses where cutting lifestyle becomes seemingly impossible.\

The expensive home, in an expensive neighborhood, which comes with expensive expectations as to furnishing and decoration. It’s the costly car that has even more costly maintenance and repairs. The vacation home or timeshare, boat (with docking fees, insurance and maintenance), or monthly/annual fees.

The key to breaking the chains of lifestyle inflation is, quite simply, to not inflate your lifestyle. In fact, you can look to deflate it, cutting expenses and debts out of your life. Only by focusing on this can you grow the gap between income and expenses, to save and invest for the future.

Why You Need To Break Your Chains

Simply put, being chained into your job is no good for you, no good for your family, and no good for your employer.

We spend most of our life at work. You’re there eight, ten, twelve or more hours of the day. If you’re working in a job that makes you miserable, feels meaningless, keeps you from your family, all in exchange for more consumer items-what kind of a life is that?

There’s more to life than the relentless pursuit of consumerism.

It’s no good for you because stress and unhappiness take their toll on you. It’s difficult to stay healthy, to be relaxed, get a good nights sleep, eat well, and so on if you’re stressed out 10+ hours of the day. How can you give your best to your family, and your life, if you’re miserable?

Your family wants you to be there with them. They want to spend time with you, and to have you be in a good place when you’re there. They don’t want you working all the time and miserable when you’re at home. Especially your kids.

Your employer doesn’t want miserable employees, either. We all find meaning in our work in different ways. Some of us find meaning in work that others aren’t fulfilled by. Unhappy employees miss work, aren’t as productive as they otherwise would be, and basically aren’t the best employees.

Finding Meaning In What You Do

I’ve talked before about the importance of finding meaning in your work. Is it OK just to work for a paycheck sometimes? Sure! Sometimes we do what we need to do to survive.

But you should seek to find some kind of meaning to your day, and if you can’t, I’d suggest moving into a position where you can.

I’m reminded of the parable of three men who were laying bricks:

A traveler came upon three men working. He asked the first man what he was doing and he said he was laying bricks. He then asked the second man the same, and he responded that he was putting up a wall. The same question to the third man resulted in a reply of a joyous “I’m building a cathedral!”

Three people. All doing the same job. But one found meaning in his work that the other two did not see.

I’ve seen this play out in my own workplace. I work in insurance, which many people consider boring. Some consider it meaningless. But I see the deeper meaning in what we do.

Everyone in the company is doing something to help people at some of the worst parts of their lives. Insurance is there to protect people from losses that would otherwise be financially devastating.

Even when I’m managing a very technical project, and especially when I get mired in day to day fires, I focus on those people we’re all working to help and support. It’s what gives deeper meaning to my work, and what keeps me going when the day to day gets hard.

And you know what? I’ve found that focusing on the deeper meaning of work also motivates others. Sometimes folks will get so wrapped up in internal minutia they need a reminder of why we do what we do.

So if you’re miserable, try reflecting on the real mission of your work. Who benefits in the end from what you do? How is what you’re doing benefiting them?

Even if your role seems internal, or insignificant, I can assure you it isn’t. Everyone in a company plays a part in the end mission of what you do.

Lets say you can’t find meaning in your job. Perhaps instead you can find meaning in what you do with your paycheck. It keeps food on your table, clothes on your back, and a roof over your head. It may allow you to financially support causes you care for.

You spend most of your life at work. If you’re miserable, and unable to find a passion for the deeper meaning of your work (or at least your paycheck), you next need to seek out a situation where you can find that.

This is where your lifestyle is key. If you’re stuck in your job you hate because you’re dependent upon the money, you don’t have that option.

Your Options

If you’re feeling stuck, you’re really not. You have options. You may not like those options. They may be difficult. But they’re there, and you can decide to exercise them or not.

What kinds of options am I talking about? Well, if you’re unhappy with your work, you can:

Go back to school in a different field

In fact, after one of my husbands operations (a total abdominal wall reconstruction, a very complex surgery) I met a nurse who used to work in insurance like I did. When she reached retirement age, she decided to go back to school and become a nurse.

Change careers

I know a former co-worker who used his day job as a safety net as he totally changed careers from project management, to becoming a professor. It took some time, but today he teaches in a field that he used to work in.

Start a business

There’s another former co-worker (I’ve worked a long time now) that left her high-paying job shortly after her son was born to start a bookstore.

Change teams – or employers

Sometimes things at your company just aren’t working out. Or occasionally your company is fine, but your team just isn’t working out for you. You can switch both those things, although it isn’t necessarily easy and may take some time.

Live a different kind of life

Some people are looking not for a small change, but for a different type of life. Maybe one where they work part of the year, and travel the rest of the year. One where one parent can stay at home and the family lives on a single income. Or it could be one where you move to a totally different town, live in an RV, or something else unconventional.

Money gives you the freedom to choose these options.

If you don’t have the money to leave work and go back to school, to take a paycut to a less stressful role, to fund starting a business and living for a while before it’s profitable, or to take the risk of changing teams/employers, you’re stuck.

And if you earn a good living, you’re likely stuck because your lifestyle has risen to meet your income.

So what do you do about lifestyle inflation?

Prevention Is The Best Cure

Once your lifestyle is already inflated, change is difficult-and may seem impossible. This is where prevention is the best cure.

If you already own the expensive home in the costly neighborhood, downsizing feels like moving backwards in life. Plus you have to go through the hassle of selling your home, buying another home, moving, changing schools…the list goes on.

If you already own the costly SUV, with expensive maintenance and gas, you again need to sell and buy a new vehicle. If you’re all used to a roomy SUV with all the fancy upgrades, you and your family are going to be somewhat unhappy downsizing to an older car. Possibly very unhappy.

Getting rid of a boat might be one of the happiest dates of boat ownership, but it’s still a hassle. Cutting down on eating out feels restrictive, and time consuming to now cook more at home. Buying less clothing (or second hand clothes if you’re me) feels like deprivation. Not taking that fancy international vacation is depressing. And so on.

It’s so much easier on you and your family if you don’t inflate your lifestyle to start with.

When you get a raise, or a big bonus, don’t use it (or at least, please don’t use all of it) to up your lifestyle. Use it to set yourself free. Invest it. Save it. Little by little, over the years, those additional savings will add up.

But what if it’s too late for that?

What If You Need A Cure?

“Ok Liz,” you’re thinking, “prevention would have been nice 5, 10, 15 years ago, but it’s too late. I’m already living at or above my means. My paycheck is gone as soon as it hits, I’m behind on retirement, I’m staring down a barrel of kids college, and I’m in debt. I’m miserable and I want a different life, but I’m stuck. What do I do?”

If you find yourself here, I would first recommend a cold hard look at your life and money. Find where you want to go. Then you can use your money to get you there.

Money is a tool. It can help you achieve a life and lifestyle that fulfills you. Or it can keep you trapped in a life you hate.

You can give it the power to transform your life.

You need to set your life on a solid financial foundation to give yourself the freedom to make changes. It really boils down to first figuring out where you are and where you want to go, then doing the work to get there.

You can check out more in my financial freedom section on the steps I recommend to find freedom in your financial life.

The Power Of Financial Freedom

To me, financial freedom isn’t necessarily about retiring from your job.
It’s about the freedom to do what you want, when you want.

It’s the ability to lead a different kind of life, if you want to. Or to live the same kind of life but with more freedom than you might have today.

The freedom to fight for what you think is best at your work, without needing to worry about politics or losing your job.

The ability to pursue a role or job at a company that might not pay as much, but brings you fulfillment, joy, and meaning in a way your work now does not.

You can be free to head back to school, to start the business you’ve always dreamed of, to head into a different employer

It can be the simple freedom you find from not needing to go for the big promotion, raise, or bonus. And instead you focus your time and energy in places that fulfill you.

Finding happiness in what you already have, and needing/wanting less overall can set you free.