How would you spend your days if money was no longer a concern? Let’s say you became an overnight millionaire in the recent GameStop stock surge, would you still be in the job you are today? The rise of meme stock, like GameStop, has put financial literacy back in the headlines recently with many people wishing they had been clever enough to earn a quick buck in the controversial GameStop or AMC sagas. But you don’t have to mastermind a day-trading raid to achieve financial independence. You will, however, need to be financially literate.
In fact, as an Executive Recruiter, I try to stress the significance of financial literacy to my candidates as often as possible. I’ve heard it all when it comes to job search “wish lists,” but most often, a candidate’s ‘must-have’ comes down to salary—the higher the better. While I would never discourage anyone from seeking competitive compensation for their work, there’s a lot more to job satisfaction than money. And too often, people conflate wealth with how high their salary is. When the truth is, you can earn a large salary (or cash out on a stock boom for that matter) and without financial literacy, still be struggling to make ends meet. To put it simply: If you don’t know how to manage your money, that big salary might not be worth the hard work you’ll invariably have to put into do the job.
When working with candidates, I try to offer a few pieces of advice to help them avoid those all-too-common “golden handcuffs.” Of course, there are many facets to financial literacy. For the sake of this blog, we’re going to focus on personal finances, such as saving, budgeting and borrowing.
Approach your job search with a financially literate mindset
It bears repeating that I’m a firm believer money should be a factor in your job search. I believe you should be compensated competitively for the work you do. But people who are truly happy give more thought to their overall financial health—those key elements of personal finance that I’ve mentioned above—rather than solely considering whether a new role offers more or less money than their last role.
I’ve spoken to many candidates that are over-leveraged and under satisfied in their current roles. Maybe they took a high-paying job that required a sort of “keeping up with the Joneses” lifestyle. Or maybe they thought more about their take-home pay than their work-life balance. Either way, they’re burnt out and ready to move on, and they usually regret not thinking more holistically about their finances.
Whether you’re working with a recruiter or searching on your own, make informed choices on the frontend of your search. You’ve got to love the job you’re about to sign up for, not just the paycheck. Even in the very early stages of your job search, be thinking about what you need—not just the salary you’re hoping to pull down.
Consider everything from extra paid maternity and paternity leave, childcare options, paid time off (PTO), stock options and 401k matching as well as profit sharing, and decide where you want to assign value or weight. People look at things like PTO or childcare reimbursement as fringe benefits, but when it comes down to it, those things can make a big difference in your life. And they should certainly be factored in when you evaluate your total compensation package.
Equally important is to ask: How will your loved ones feel about the total compensation offering, including salary and the other benefits being offered? Involve your spouse, your partner, even your friends and make sure they’re aligned on the total benefits package.
Financial literacy isn’t just about numbers—money in, money out. It’s about balance and sometimes tradeoffs. If you get an extra $5k on your base salary, would you trade that for a week off on PTO? What if the role offers tuition reimbursement? If a perspective employer is willing to pay to train you, a lower salary might be worth the long-term gains you’d realize once you had that training. Regardless of the variables, you need to be clear on the big-picture impact of a role to your life and your family to better understand your bottom line when negotiating and accepting a role.
Remember that you’re in the driver’s seat
Financial literacy is absolutely key to feel content and financially secure, which will unlock more job satisfaction than a giant salary ever could. But to get there, you have to remember that you’re in control of your money.
Everything’s about balance. Just like with health. With every paycheck, work out how much you’d like to put away. Know when you want to retire and how much you hope to have on hand. Don’t rely on a 401k alone if it’s not going to get you where you want to go. And remember that outgoings are just as important as the incoming. College savings, daycare, vacation savings—your money is a balancing act you have to keep up with.
In the same way that you carve out time to keep your house clean or investing in relationships with your loved ones, you need to allocate time each month to manage your money. There are lots of ways to make managing your finances interesting and even enjoyable.
In the long run, your employer influences your financial success a lot less than you might think. You’re the one calling the shots on where your money goes. And when you manage your money, you give yourself options, and ultimately, you have more control. People take a big paycheck thinking it’s going to change their lives. But if you don’t manage it well, you’ll never feel comfortable with your income or your financial situation. No matter how big the paycheck is.
So, before you start the search for your next play, brush up on your financial know-how and think long and hard about what you really value. No one should have to take a job just because of the size of the paycheck. With some education and discipline, you can clear the path for a job—not just a paycheck—that you love.