The Paycheck Hamster Wheel

When we think of sources for our money, so often, the first thought is our job. And for the vast majority of us, our job provides our primary income. As each year moves along though, the reality is few of us will get the proverbial “gold watch” from any employer. In fact, for most of us here in 2018, we will work for a number of employers over the years, and many of us will have several “careers” over our working life.

 

Have you ever had your boss tell you “this isn’t personal, it’s all business” and then start to rip you apart? You may have heard something like this at some point, and if you haven’t, you probably will down the road. Working for others is rarely ever smooth sailing for 40 years on the road to retirement. At some point, most people will encounter situations that lead to a need to change jobs and employers. This has serious implications for how we think about personal finances – and it’s something we should plan for.

 

As you think about your finances, think about ways that you can improve your outlook for the future, and where possible, think about opportunities where you can become less reliant on a paycheck from an employer. When you work for someone else – you are giving them a level of control over your life. Find ways to keep as much control in your hands as possible.

 

Keys to keeping more control on personal finances and ceding less to an employment situation:

  • Build a rainy-day fund with at least three months of your income – and keep those funds in an FDIC insured bank account so your money will stay safe. Get a higher yielding account. And, once you have three months’ worth of income saved, keep right on going – six months, nine months, even a year! If you are starting with nothing in your rainy-day fund, don’t worry, we all started there! They key is to just get started.
  • Find ways to diversify how you earn $ - start a side hustle, start investing, sell some of the things in your house that you never use and don’t need anymore.
  • Build a budget that truly works – spend less than you bring in. And save/invest that excess.
  • Pay down your debt – debt simply keeps you stuck in place until it is paid off.
  • If you feel like a job situation is becoming untenable, find ways to fix it – and if all else fails, find a better situation. It is not worth being miserable at work - find a new gig.

Trevi Tip: Find ways to lessen your dependence on a paycheck from an employer. Start by creating a budget; build a rainy-day fund with at least three months’ worth of your salary saved up; diversify how you make money by starting a side hustle and investing; and pay down your debt.

 

Life is too short – taking control of your personal finances is a journey worth embarking on. Over the longer term, good personal financial management will give you freedom from oppressive employers and allow you to find some level of control.

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