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 outfit.” 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 the details.
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. ? If 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. ? Consider 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. ? Evaluate
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. ? Take 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. ? Let 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. ? Sweat 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 calories)? Make the effort to evaluate
everything you do. You’ll be amazed by the amount of money you
can save.