Editor's Note: What are your
"spend priorities"? Are your expenses made up more
of what you want than what you need? People often spend far
more money than they have, racking up credit card bills and the
truth is that most people spend far more money because they don't
differentiate between the things they need to buy and the things
they want to buy.
If spending money is something that
is out of control for you, or if you are only interested in learning
spending self-control, Craig Nathanson gives a great basis for
helping you cut back, reduce your debt load, and cut your
The Difference Between
“Need” and “Want”
Let’s face it: Most people spend
way too much money on things they don’t really need. The more
money we make, the more we tend to spend. This endless cycle of
materialism has led many people to confuse the word “need” with
the word “want.” As in, “we need a big-screen TV for our new
home theater.” Or, “I need a new pair of shoes to go with my new
If you want to achieve your
vocational passion, where every day you jump out of bed and can’t
wait to go to work, then you need to re-order your priorities. Stay
away from the purely material.
The pursuit of material success
often is the root cause of burnout at midlife. In fact, a recent
study at the University of California at Berkeley found that people
primarily motivated by the love of their work grow dissatisfied as
they begin to make more money.
The first step to breaking free
from the materialism trap is to understand the difference between
“need” and “want.”
We need food, clothing, shelter,
reliable transportation, education, enrichment, and the technology
necessary to do our work. Also, we need the occasional small
indulgence to treat our children and ourselves.
We do not need 500 cable TV
channels, brand new luxury cars, 5,000-square-foot homes in
exclusive neighborhoods, lavish ski vacations, and smart phones that
do everything but think for us.
There is nothing wrong with wanting
these things. But understand that these things do not make us happy,
in and of themselves. And, they are often links in the chains that
bind us to jobs we despise.
Often, those who make a leap to
vocational passion end up making more money over the long term. But
in the short term, income usually declines. It may even go away for
a period of time. Typically, the first two years of a career change
– in particular, one motivated purely by vocational passion –
are financially difficult. Major lifestyle and attitude adjustments
are critical to making the money last while you pursue your dream.
The amazing thing is that once you
learn to live on less, it becomes a habit. The peace of mind that
comes from relying less on materialism to define success usually
leads to a greater and deeper happiness.
Getting Real About Money
So. Now we understand that pursuing
vocational passion requires a major adjustment in our attitude
toward money and material comfort. The next step is getting down to
What does it take to transform
yourself and your family from a unit that consumes as much as it
earns to one that respects money and makes it last?
The trick is to look at all
expenses, both big and small. Leave no stone unturned. No savings is
too small, and no category of spending should be free from scrutiny.
Those looking to leave a job to
pursue a vocational passion face two core issues: raising enough
money to fund a career change, and changing spending patterns to
make the money last. Raising the money can be a tremendous
challenge, depending on your financial resources. Savings, bonds,
securities, IRAs, home equity, jewelry, valuables, and family
resources are all avenues for raising capital to sustain your family
during this transition.
Consider these options to cut down
your burn rate. Some will seem dramatic. But if you have decided
that your only chance at happiness is to pursue a vocational dream,
small measures won’t cut it.
you live in a “McMansion,” consider selling it. You could
use the proceeds to buy a smaller house in a less expensive
neighborhood. That would leave you with no mortgage or a much
smaller “nut” to make each month. Whatever the size of your
home, you can go a step further and use 100% of the proceeds of
a home sale as working cash for the transition, then rent a
house instead. Seeking the advice of a tax attorney or a
financial planner may be wise, particularly when you are selling
your home or using it as security on a loan. But, do not let
these advisers sway you from your core decisions. They are there
only to give you advice on the smartest way to pursue the path
you have chosen.
part-time or project-based work in the field you are moving out
of to supplement your income during the transition. Also, look
generally to part-time work as a way to slow your burn rate. Ask
each eligible member of your family to contribute toward
supporting the household.
your home, car, and health insurance costs. Are you
over-insured? Can you raise your deductibles? This often can
reduce premiums significantly. Also, health insurance rates for
small businesses, even those with one or two employees, are
often more favorable than individual policies.
a look at what you drive. Is it a “badge” brand imported
car? Is it a “suburban assault vehicle?” There are many
presentable, economical cars with good long-term reliability
that can be purchased used. Sell your status symbol and buy one
of these other cars instead. You will save on car payments, gas
and insurance. You will be better off the minute you stop trying
to impress people with what you drive.
your children fund a little more of their own college education.
Student loans are not a lifelong burden, and in fact many
successful people have paid for their education this way. So can
your children. They will still love you.
the small stuff. Look at every element of your daily spending
and ask whether it is necessary. Do you have features on your
phone service that you never use? How many videos do you rent
every week? (They are free at the local library, by the way.)
How important are those premium cable channels? How many pizzas
did you order last month? How much do you spend every day on
designer coffee, soft drinks, and fast food? How much do you
spend on dinners at nice restaurants?
Take a look at what’s in your grocery cart. How much of it is
snack food or impulse buys that are both bad for you and a waste
of money? If you still need a reason to quit smoking, the
$5-plus per pack you are spending ought to finally get you to
give up that habit.
Is your home well insulated, or does money in the form of energy
fly out the window? Do you turn out the lights when you leave a
room? How much do you waste each year on late fees for credit
cards or overdue videos? How necessary is each short trip you
take in the car? Can you combine trips, or make small, local
errands on foot or on your bike, (which saves money and burns
the effort to evaluate everything you do. You’ll be amazed by the
amount of money you can save.
About The Author
Nathanson, The Vocational Coach, is the author of “P Is For
Perfect: Your Perfect Vocational Day,” by Book Coach Press. He
publishes the free monthly e-zine, “Vocational Passion in
Mid-life.” Craig believes the world works a little better when we
do the work we love. He helps those in mid-life carry this out.
Visit his online community at http://www.thevocationalcoach.com where
you can sign up for his next Tele-class coming up January, 26th.