The term Golden Handcuffs is often used to describe a financial incentive that keeps an employee from leaving a company. The employee is locked into such a sweet high paying position that they simply can’t afford to leave.
However, this term can be applied to your position in life as well.
When most people get high paying jobs and start earning a lot of money, the first thing that they will do is increase their standard of living to match their new wage. The new flat screen television, the recent model car, the larger house, and the expensive hobbies all start rolling in.
With an increase in salary comes a brand new lifestyle. After all, no matter how much money you are earning, it is the easiest thing in the world to spend it all.
However, what happens when you are sitting on your brand new leather couch, sipping wine from your designer stemware, and you realize that you don’t actually like your job? In fact, you hate it and you wish you could be doing anything else.
You wish you could be able to start your own business, go travelling, or follow your passion to a more rewarding career.
Trapped in a Lifestyle
Unfortunately, if you are spending everything that you are earning (and even going into debt) you are literally trapped in your high paying position. You would love to quit and try something different, but you know that other options out there will not be as high paying as your current position.
With your high mortgage payments, car lease, utility costs, and paying off that new TV you would be bankrupt within a week if you dared to give the job the slip. Any major job change would require stripping your lavish life down and getting rid of all of the luxuries you and your family have become accustomed to.
Avoid the Trap
So how do you avoid this nightmarish scenario? Don’t let yourself get trapped by the Golden Handcuffs in the first place. The trick is to avoid inflating your living expenses to match your income, and always living well within your means. To put it simply: Always spend less than you earn.
It seems simple, but so many people in modern society have been handcuffed. Don’t let yourself become trapped!
If you had taken the high paying job, but stayed in your smaller home with your old car (which works just fine) as well as held off on buying items you could not afford, you would be able to easily make a career switch later on without having any impact on your lifestyle.
In fact, you would probably have money in savings that you could use to travel, start up a business, or pursue your dreams.
Isn’t freedom sweet?