How much do you spend each month? And how much of what you buy is completely optional? Unfortunately, it’s natural for people to take the job that offers the highest salary. What people too often don’t factor in when choosing a job is how their quality of life will differ between the different salaries and roles presented to them, as well as where they want to end up long-term.
Don’t live paycheck to paycheck seeking as high a salary as possible. Instead, focus on doing what you love and attaining your long-term goal. After college, I had a variety of options. I knew I wanted to work for a company like Microsoft, but did not get replies when I submitted my resume. Instead of taking a job in consulting or at a random company I wasn’t interested in, I found a job at a startup that would give me the experience I wanted to gain. The catch was the measly salary, but only 8 months later I was offered a job at Microsoft. My salary tripled between when I arrived in New York City and when I left. I was making too little when I arrived, but it showed me just how little I can live on. My quality of life improved with my salary, but it did not triple.
Since leaving Microsoft, I have lived extremely well on 50% of my previous salary. It means I don’t go out to eat quite as much, and overall I need to watch my spending more. But at the same time I’m happier because I wake up each day and do what I love. When I do go out to eat, I appreciate it so much more.
Parkinson’s Law says that ‘work expands so as to fill the time available for its completion’. A variation of this law is that spending expands so as to fill the available budget. Think about it: the more money you make, the more you spend each month. When I lived in New York, every significant raise went towards moving to a slightly nicer apartment. People wait for their raise, and then eat up the additional cash immediately with changes to their lifestyle.
The lesson here is that when you realize you don’t need your high salary, there are many more options in life. I was recently talking to a friend at Microsoft who wanted a change but didn’t know if he was ready to go cold turkey and start his own business. He felt trapped. He considered new jobs, but figured they would not change how he felt, so he stayed put. It turns out there are many more options than he realized, including:
- Request a 20-hour week at Microsoft, or find a ‘job share’ (not sure if other companies have these).
- Find a consulting position at Microsoft or elsewhere 20 hours a week – you will probably make more than 50% of your salary.
- Find a job you are excited about and forget about salary – try it for a year.
- Work for 12 more months, but cut your expenses 50% anyways. After 12 months, you’ll have saved enough to live for a whole year. Plenty of time to figure out what you really want to be doing.
Another lesson is to watch your spending. Obviously it’s easier to increase your spending than to reduce it. Less bills and payments mean more freedom.