The obvious connection between career choice and money is that some jobs pay better than others. Why then, you might wonder, wouldn’t the title of this post be, “Choose a High-Paying Career?”
While true that a high-paying job can be a good thing, it isn’t the most important factor in whether or not you’ll have a healthy relationship with money. In fact, sometimes making lots of money at work can negatively impact your relationship with money.
What is most important for a healthy relationship with your money is to find a way to consistently accumulate more money than you spend, no matter how much you earn, and that you find overall satisfaction with how things are going in your life.
So ask yourself this question:
What do you want to be when you grow up?
When I was a kid and someone asked me this, I’d reply, “I am going to be a baseball player, and a rockstar, and I’m going to be rich! I’ll have 5 houses, and I’ll own a bunch of cars and boats, and I’ll travel the world, and……” Maybe you have a version of the answer that is similar, maybe you don’t.
What you probably aren’t thinking is, “I am going to be a ___(insert your practical choice here) but more importantly, I plan on saving way more money than I spend no matter how much I make at work. I’m far less worried about how much money I make and how much stuff I have than how much satisfaction and happiness I get from the work I choose to pursue and the lifestyle I choose to lead.”
If you are thinking this exact thought already? Huzzah! you can probably stop reading. If you haven’t quite arrived at this perspective yet it’s OK too. Not many (that I know of) think like this as a teenager, but maybe by the time you’re done reading this post you’ll start to see how being satisfied at work is more important than the amount of money you make at work.
Accumulating more money than you spend (Saving!)
How much you earn at work is one input in the equation (here’s the math I promised) for the amount of money you save on annual basis. You might also hear this referred to as Cash Flow:
P + A – I – D = Cash Flow
Where:
- P is money you make at work (your “Paycheck”)
- A is the Added money you Accumulate investing the money you already have
- I is the basic expenses that are Imperative (e.g, rent/mortgage, groceries, utilities, etc)
- D is Discretionary expenses (e.g., cable TV, cell phones, vacations, etc)
We won’t dig into the details of the cash flow equation for now, but what is important to note is that you always want your annual cash flow to be positive, and the bigger the positive amount it is, the better. While it’s obvious that how much money you make at work (P) impacts cash flow positively, there are several other factors (A, I, D) that also have an impact on cash flow too.
How Engaging Work Can Positively Impact Cash Flow
Finding a healthy balance (positive cash flow) across each of the incomes and expenses in the cash flow equation is what gives you the best chance of having a healthy relationship with money.
One of the best things you can do to find that balance is to choose a career path that excites/motivates you first, and then consider the pay associated with the work and how it impacts your overall finances. I say this because there is a strong connection between how satisfied you are at work and how effectively you manage money, no matter how much of it you have.
The connection goes something like this:
If you’re excited/motivated by what you do for a living, you’re more likely to be satisfied with the job and focused on being good at it
First, let me qualify that “having a job” does not necessarily mean you must work for a big company, or someone else at all. Being your own boss might be the best path to finding work that you are personally motivated by. Don’t limit your vision for how you make money to working for somebody else. Find your own way…
Next, let me further qualify the “find a motivating career” statement with an important corollary: Having a well-paying, stable job that you may not love is almost certainly better than no job at all. If your dream career ain’t available, make it a goal to get there, but get yourself some gainful employment in the mean time. We need to be practical, people!
Now, let’s get back to Shangri-La….
Choosing work that inspires/motivates you is key for job satisfaction, because you are probably going to spend a lot of time at work. 50% to 70% of your waking hours that could be spent working, are probably spent working, especially as you begin your career. If you aren’t motivated by what you are doing with all that time, you’ll find it difficult to stay engaged and keep a positive attitude with the ups and downs that will inevitably come. Even when you enjoy the work you do, there will be times when it is really challenging and not so much fun.
When you see greater purpose in it than just collecting a paycheck, you’ll find it so much easier to put in the long hours and considerable effort required to be good at what you do, and you’ll probably find a level of satisfaction in that work that sets you up for fulfillment in other parts of your life as well.
If you are satisfied with your job, you are less likely to seek satisfaction in “stuff”
Depending on what published statistics one references, somewhere between 30% and 50% of all Americans consider their job as just something to “get them by,” or a stepping stone to something else. What’s more, only about half of Americans are “very satisfied” with their jobs. Now, you might think, “That’s not bad. Half of the people really like their jobs.” But stop and think about it. 1 in every 2 adults don’t really like how they spend 50% or more of their waking hours every day. I don’t know about you, but to me, that sounds kinda awful.
…And guess what many of the people who aren’t really happy with work end up doing in an effort to find the satisfaction that eludes them at work? That’s right, they seek it elsewhere, and for many of them that means buying “Stuff.” All kinds of Stuff. The newest smart phone, the fastest laptop, expensive clothes, fancy cars, big houses…you get the picture.
Stuff is a disguise for a gnarly Pit of Pain.
For a while, having the coolest, newest whatever is exciting, and you do feel good about it. Stuff might even completely mask your dissatisfaction with work for a while. Inevitably Stuff loses its novelty and the satisfaction it provided fades. To fill this void, you then have to make the next purchase and then the next, and so on. It’s a never-ending, nearly bottomless Pit of Pain, that can be really hard to recover from.
I’m not suggesting you should forego all nice things. There is certainly nothing wrong with having nice things and memorable experiences that provide genuine satisfaction and serve a purpose. What I am saying is that looking for personal satisfaction and happiness in Stuff won’t work in the long run. What it will do is reduce your savings by increasing your “discretionary expenses” (the D in the cash flow equation) and it can even have a sneaky, negative impact on “imperative expenses” (the I in the cash flow equation).
For example, you may need a car to get around when you venture out to live on your own, but do you really need a brand new sedan with all the bell n’ whistles, or could you make do with a used but reliable ride that saves you $200 or $300 / month in payments? If work sucks, you might just convince yourself that new car is required. You might justify it by saying the nicer car is a “reward” for putting up with work. That’s a sneaky increase on the “I” in the cash flow equation drain, and it directly reduces your savings if you don’t pay attention.
On the other hand, if you are satisfied at work, you are far less likely to fall into the trap of making bad decisions about how you spend the money you’ve earned. When you do buy things or experiences, it will probably be for the right reasons, and you’ll have considered the purchase thoroughly. When you choose not to buy Stuff, it will also probably because you’ll realize you don’t need it to be happy or fulfilled. The “D,” and maybe even the “I” in your personal cash flow equation will be smaller. In the long Money Marathon, that will get you where you ultimately want to be – financial independence – faster!
If you are satisfied with your job, you’ll also have more energy in reserve for your pursuits outside of work
If you are fortunate enough to choose a career that excites you and pays very well, then you are in a really good place. You’ll not only be satisfied with your work, you’ll also be able to save oodles of money for things and/or experiences that really matter to you and to hit that financial independence goal sooner. Yippee!
But what if you choose a career path you love that doesn’t pay so well?
This presents some challenges, but the good news is, you can still have a great relationship with your money. Yes, you’ll have to be a bit smarter and picky-choosy about how you spend your money (I and D). You’ll also need to pay closer attention to how you invest the accumulated savings you’ve set aside – the “A” in the cash flow equation – because the money you earn from investment will matter a bit more to you in the long run. You may even want to have something called a “side hustle” (more to come on side hustles later) to bring in extra cash (adding to “P” ) and test ideas for future financial independence.
All this extra effort certainly requires a surplus of energy, and who has that after a long day at work? You do! Since you enjoy what you do for a living, you won’t be completely exhausted at the end of every work day. Sure, sometimes you’ll just want to sit down after working and veg-out to Netflix, but most days you’ll have gas in the tank to focus on these other things that are important parts of having a healthy relationship with your money. You’ll have the energy to make good choices about how you spend and invest your money.
I trust you can see that finding work that you are inspired by has far-reaching positive impacts on your relationship with money? It also has some other benefits…
Being Generally Happy Overall
Here’s where the soul-nourishing gobbledygook comes in….Don’t worry, I’ll get right to the point in this area. You know I can’t stay here too long before I weird myself out.
Recall that I wrote near the beginning of this post that the best indicators you’ll have a healthy relationship with money are that you find ways to have a positive cash flow (you’re a saver), and that you are generally satisfied with your life. Now this isn’t specifically a blog about finding overall happiness, but the good news is that finding stimulating work will not only contributes directly to your financial health, it also helps aids your overall happiness. It’s a double-whammy! You’ll not only have the added energy to manage your money properly, you also have enough of it in reserve for other productive activities like exercise, choosing a healthy diet, pursuing hobbies and/or volunteering for a cause you find worthy. These activities directly improve your happiness. Hate your job, regardless of how well it pays, and it’s likely to have a negative impact on your overall happiness -and probably your savings account too.
Thus, pick what you do for a living for the right reasons, and just about everything in your life will be better.
Namaste!
The Money Marathon 