Having More Money In Your Career Can Be Problematic

Jobs are a necessity to how we are able to live our lives. We get paid for the different services we perform. Although we all have different types of careers, the end game is similar for all of them. We hope to move up in whatever company we are in to make more money and potentially have a better title. However, is this really the best thing for us? Is more money exactly what we need? What would you even do with the extra money you would get from having the new job?

Misconception

One of the common misconceptions of making more money through a job is the belief that it will actually allow you to have extra funds every month. In reality Parkinson’s Law almost always sets in. Now, we have talked about this law before, but for reminders sake, we can do a refresher. Parkinson’s Law is more of an adage which relates the work expands to fill the time available for completion. The same is true with your money and your monthly spending. Although your intentions are good to try and save that extra money every month, inevitably we all tend to expand our savings to meet our current income.

The Truth

So, if you are making $50K a year and then suddenly get a promotion to $60K a year, you are not likely to capture the savings of that $10K extra a year for very long (these are nominal values). Sure, you might be able to enjoy having that extra bit of money every month to save or do fun things for awhile, but eventually it will be consumed by your spending. This is happened more times to people I have worked with that I want to count. It has even happened to the Mrs. and I. The good news is, there are ways to help avoid this if you can see the money coming your way.

The Fix

The first thing you can do is create a list of the big things on your wish list that you think you want to get with this massive amount of wealth you are about to get (Yes, I know you have made a list already, we all do). Next, figure out the total cost and list them in priority. I am not saying you shouldn’t get these things, but rather think about this in a smart way. Figure out how much net new money per paycheck you are bringing in every month (net would be after taxes). Next, figure out how many paychecks you are going to have to get with this “extra” money before you can buy these things. Voila! You have a plan for how to safely get the things you want without breaking the bank. Again, I know you are going to try and buy these things you want. At least this way should hopefully help you think about it!