We are entirely separate from our jobs!
“Of course we are,” you might say. “We need to have a balance in life. We must prioritize family, friends and a life outside of work.” This is all true, but what I am talking about goes way beyond general life rules.
We all have a powerful need for our lives to feel consistent. We go to work, we pay our bills and we move forward. We take great comfort in routine and the sense of sameness each day brings us, even if we are not particularly fond of our jobs.
We build our entire lives around our feelings of job consistency and the financial security steady employment provides us. We routinely plan the future with no thought of ever becoming jobless.
What if our view of job consistency is only an illusion?
Our jobs actually change in small ways daily, and we adjust to keep our need for consistency intact. This gives us comfort as we make life plans. But if a sudden and dramatic shift occurs, it totally shatters our illusions about job and life stability.
We understand intellectually that we could lose our jobs, but it rarely sinks in at an emotional level. A great example is when people say, “Only three more years, and I can retire.” They fully expect to be employed and paid for three more years. This shows how deeply we are invested in our jobs remaining relatively stable, which is not guaranteed.
Another great example of how we are blind to the obvious is our accumulated debt. Many people would go under financially if they or their partner suffered sudden job loss. Without one (or both jobs), they would no longer be able to make their debt payments. Going under financially due to job loss was common during our last recession, yet most people forget that lesson today. Even though we know this danger exists, there is not a lot of thought given to sudden job loss when debt is created. Due to our need for consistency, we avoid thinking about it.
A recent study reports:
More than half of Americans (51%) say they would run out of money within one month if they lost their income. About 29% say they'd run out of money in one week or less.
More than half of Americans surveyed (55%) say they’d lose everything if there was a recession.
No one wants to wake up every day of their lives worrying about job loss; that would be extremely depressing. However, improving your financial awareness just requires a slightly different way of thinking.
Your New Mindset:
Consider yourself/your household an independent business!
Did you know that when all is said and done, households are essentially businesses? At our house, we call it Faulkner, Incorporated. We all have the same profit requirement that controls a business: you cannot go deeper and deeper into debt in your weekly, monthly, and quarterly financial reports and remain solvent. If you are operating in the red as an individual, you must quickly make changes to become profitable. The idea is to use a more logical and business-like approach to analyze your expenses, income, and budget. A big advantage to this technique is that it provides the emotional distance required to calm budget anxieties and the separation of financial stability from jobs we ultimately do not control.
Just like a business, your goal is to increase both your net worth and profit annually.
Every business strives to increase its profitability over time, and that will be your goal as well. You will have to analyze income and expense statements on a monthly, quarterly, and annual basis.
Companies that break even or go slightly into the red are not considered profitable. Make your household business a powerhouse of strength. This perspective can empower you to keep working through the budgeting process.
Ask yourself the following:
Do I make a profit each month (savings)?
What changes can I make to become more profitable (more savings)?
What is my largest expense category, and how can I reduce it?
What can I do temporarily to increase my short-term profitability?
How can I eliminate some less-important expenses to increase profit?
How can I use my monthly profit to create even more profit (investing)?
How can I increase my annual income?
Another requirement in business is to annually increase market share in particular business sectors. Businesses spend a great deal of time and money in the area of research, development, and marketing to accomplish this goal. In the household business analogy, households need to do the same through personal development. Both you and your partner (if applicable) need to increase your skills to make yourselves more profitable and marketable should you face a sudden job loss. Adding new skills can also make you more valuable in your current roles and perhaps lead to promotions and, ultimately, an increase in annual income.
What Do You Deserve?
You don’t own your job! It is owned by the company that employs you. Right or wrong, your job could be gone tomorrow at the whim of that entity. Even if you are 100% loyal to your job’s mission, you could still be cast aside tomorrow in the name of budgetary progress. Given this absolute truth, what do you deserve for all your work, effort, and dedication? What do you need/want from the experience?
Almost 50% of workers have lost a job due to layoffs, job elimination or even being unexpectedly fired. You are more than what you do for a living, so it is in your best interest to create as much financial independence from your job as you can manage by increasing your household’s net worth. The more financial stability you build, the better off you/your family will be.
~ Larry & Lisa Faulkner
Comentarios