Do you find yourself earning a good wage but still struggling to get ahead? If so, it is time to consider whether your job is getting in your way.
This may sound counter-intuitive, given that most people assume that the more money we make, the more we can afford to save and the more wealth we can accumulate.
However, quite often this is not the case, with many high income earners still managing to accumulate significant amounts of debt, often attributed to a case of ‘lifestyle inflation’. In fact, the Australian Bureau of Statistics recently found that high income households were more likely to be overindebted than those on lower incomes.
In other words, when we start earning more, we treat ourselves to nicer things, in the hope that this will make us happy.
There is just one problem with this approach : research has found that earning more money doesn’t necessarily increase our sense of happiness and wellbeing (even if you’re a millionaire!).
Research aside, from personal experience, I know all too well the impact a job we don’t enjoy can have on our emotional state (and with that, on our finances).
Confessions of a shopaholic…
When I was in my late 20s, I worked in a corporate role that paid well but one that I didn’t find fulfilling. While I waited for things to improve, I indulged in some pretty serious retail therapy, which I justified as necessary. My husband and I planned overseas holidays (we work hard, so we deserve a break, right?), I bought designer clothes (I need to look professional), a nice new car (I need a way to get to and from work) – you name it. I bought all this to reward myself for my years of hard work in a job I hated.
It wasn’t until I got so sick that I had to take an extended period of unpaid leave, that it dawned on me. I was spending money in an effort to find fulfillment.
Living the dream…
Living in an age of social media and consumerism there is no shortage of advertising that feeds us the idea that spending money will make us feel happy or fulfilled. Your dream car, dream home, that dream holiday – the marketers are very good at what they do. But there is never any mention of saving for your dreams. Instead, the focus is on enjoying yourself now and worrying about the money later!
And the ‘dream life’ is exaggerated through social media, or the highlight reel, as I like to call it. Other people’s dream cars, homes and holidays constantly clutter our newsfeed, adding further pressure for us to keep up. But no one posts the size of their credit card debt or that they’re living pay cheque to pay cheque with little to no buffer in between!
This type of spending can easily turn into a habit, in part because we easily adjust to our new lifestyle. This means that the excitement and novelty of that fancy house or car will quickly wear off, leaving us to spend more money in pursuit of our next quick fix.
From debt to wealth…
So, if you find yourself struggling to save, pay off debt or build wealth, I strongly encourage you to take a moment to do a stock check of your bank account and of your emotions.
- Do I feel unhappy or unfulfilled in my job?
- Do I dread going to work most days?
- Do I feel the need to ‘buy stuff’ to make me feel excited about going to work or to justify my working so hard?
- Have I taken on more debt since I have started this job?
- Do I make purchases based on keeping up with my colleagues or impressing my boss?
- Do I regularly drink alcohol or indulge in junk food as a way of unwinding after a long day?
- Do I book holidays just so I can escape my daily routine?
- Do I regularly spend money on takeaway because I feel too tired to cook (or lack the time to meal plan)?
If the answer to one or more of these questions is ‘yes’, it is time to start taking corrective measures. This doesn’t necessarily mean quitting your job the first thing tomorrow or throwing your entire career in the bin.
What it means is taking the time to identify what specifically it is you enjoy doing and finding out how you can incorporate more of that into your life.
Consider doing things like volunteering, pursuing a hobby or lifelong passion, cutting back the hours that you work, spending more time with friends and family (and less time on social media and watching TV).
Once you find ways to feel a greater sense of fulfillment, you will find the need to spend money slowly but surely start to dissipate, and in turn, your bank balance start to grow.
Natasha Janssens is a Certified Money Coach (CMC)® and founder of Women with Cents. She is an award winning finance expert with a passion for supporting women to transform their relationship with money. If you don't know what you don't know when it comes to money and financial matters, her book Wonder Woman's Guide to Money is for you. If you would like to work with Natasha, take the Money Type Quiz and book a quick get-to-know you call.