| 1067 words

Something that's been new for me over the past year is having money. Well there were a lot of new things; I moved to a new city, adjusted to the schedule of working full time, rented and furnished my own apartment for the first time. However all of those momentous events were not as psychologically impactful as having money.

Much like how having kids forces you to think about and plan for the future, money has a similar effect. Perhaps not so long term as that, but I find that you can't have any semblance of a savings account without also having some vague image of what you may be saving for. In my prior experience, when you essentially have just enough to cover the foreseeable future with no idea about future earnings (like as a student or part time employee) the vibe is entirely different. You basically buy the stuff you need, sprinkle in a little bit of stuff you want, and don't think about it too much. Who knows what your next job will be, if you'll have one at all! That all changes when you get a job.

Suddenly, you need to start asking yourself a lot of hard questions. How much money am I making? How much should I be making? How high should I aim for? And, the hardest question of all, what do I need money for?

I guess since I know alot of other people who graduated recently, it's been pretty interesting to see how different philosophies towards money and earning have developed. I think the standard one, by far the most common, is pretty straightforward. It's just to get more money. The goal isn't any specific dollar value, it's always to be making more than they were previously. A lot of career planning goes to essentially support this idea, constantly finding the next move to increase the number at the bottom of that paycheck.

To clarify, I don't think there's anything wrong with this. There are a lot of situations where every extra dollar helps. If you have a family or are raising kids or are have expensive hobbies then it can make sense to orient your life to keep adding to that salary, and a lot of what I say won't apply. Luckily, the job market is essentially structured with that assumption in mind; companies understand people want more money when switching jobs, and from what I've seen in this industry it's generally possible to keep switching and keep making more, as long as you know you want it. The hard part is, what if you actually know that you don't?

If, instead, you know that making more money isn't the biggest career priority for you then you're forced to answer a whole other set of questions. What is the stopping point? Am I already there? Do I need to worry about salary growth? Should I even consider reducing what I'm paid for other concessions? A lot of it is very counterintuitive because it's not the kind of stuff you're prepared to think about.

I was talking to someone who was laying out their plans for the next couple of years, considering the likely amounts of money they'd have, and I asked them what they'd do with it all. No immediate answer came to mind; they said a house (which in Canada is a disproportionately huge investment due to our housing crisis) which actually would be expensive enough to suck up that big bank account. But they said it would be a house mainly for investment purposes, which only kicks the problem down the road. Once you've gotten that and have even more money rolling in - then what?

Like I said above, the pursuit of more money just to have more money can be a fun and challenging goal, and certainly has its upsides. But it's not the only fun and challenging goal, and I might even say that it's one of the less interesting ones. I realized that if I suddenly managed to make 25% more than I do now, very little would change for me. A bigger number on a website somewhere, that's it really. And if I made 25% less, very little would change too honestly. I'm naturally frugal, and aside from pushing myself to make some big purchases and gifts for the sake of spending most of it doesn't go to much.

There's a concept called lifestyle creep, where as you get more money you naturally spend on nicer cars and bigger houses so that it doesn't actually feel like you have much more. It's how pople can be making $300k in a city like New York and feel like they're living paycheck to paycheck. There's also kind of an inverse concept from the retire early community - people who intentionally limit their expenses to save enough money to live off before retirement age. They said you should build the life you want, and then save for it. Identify what you want to spend money on, which luxuries matter to you, and then save everything more then that to keep that lifestyle going.

Ultimately I think it's a useful framework to have when thinking about money. The brain is a funny thing, and big numbers can short circuit it. Monkey brain wants to see number go up, whether its your score in candy crush or the total in your bank account. It feels good, but without an endpoint in mind it can feel like treading water; always hungry, never satisfied. I'd suspect having a carefree attitude towards your career and earnings might be healthier, in terms of reducing stress and anxiety.

It's a very counterintuitive thing to consider taking a voluntary paycut, especially when so many poor souls are in the opposite position. Plus more money can do a lot of good if you're open with gifts and donations. But I always wonder how much is too much, and when I'll hit that point. If I've hit that point. Making less money could buy me so much time, and who knows what I'd be able to do with it. Probably more of these, for a start.