Is Your Life Costing You Your Career?

In the final weeks of my 9-week Career Mastermind, several participants brought up the fact that they would love to change jobs, but worried about making enough money in their new career. This is about as common a concern as you can get, yet when I asked if they knew how much they really needed to make, no one was sure. This is true of most of us, really. We know what we currently make, but we don't know what we spend. This makes transitioning to anything else a guessing game, where great fields of interest can be dismissed out of hand simply because we assume it won't pay enough to cover our bills. But what if you don't actually know how much your life costs? How can you make an educated decision?

One of the homework assignments in the group was to take a look back at a full month of their lives (minimum) to see what it cost. Not just the bills-- the whole shebang. Drinks, dinners out, the babysitter, the gift you got your sister, supplements... You know, all the stuff we don't necessarily plan for, but spend regularly. It's important to include your partner's expenses if you share a home and bills. And it's important to include the cavity you had filled or the glasses you got, even though that seems like a once a year or rare thing. Believe me, every month there's a rare thing.

An easier way to do this than looking at every credit card and bank statement in a month is to use an app like Mint.com. It takes awhile to link all of your accounts, but once they're there, you can easily look and see what was spent in any given time period (excluding cash payments).

The funny thing is, we all know this. We all know about the importance of tracking our spending. But so few actually do it. Why? Because so many of us are afraid that we'll find out something bad and have to change. The bliss of ignorance really comes into play here, as a few participants noted. Why take a closer look when I've been doing more or less fine all these years? Especially if I'm saving money each month?

It's a fair point, until you are faced with the possibility of changing your income. Maybe it's because you're considering another degree or a new career. It's simply too easy to stay in a job you hate, say no to much better options, and yes to terrible ones (because they pay “well”), due to ignorance of what your life costs.
One of the best things about actually spending a few minutes tallying up a given month is that you may find out that your life costs less than you think. Really. It happens.

The other thing to keep in mind is that once you know the truth, you don't have to make any changes. You don't have to forego lattes and only shop at second hand stores. You can do exactly what you did before, but with the knowledge of what you really need to make to keep up that lifestyle. How empowering!

I'll be honest, when I did the math on my life I was surprised. It was higher than I thought it would be. What was helpful for me was seeing how much of those expenses will go away in time, and knowing that I can save that money after the expense is gone. For example, I won't have a car payment anymore next year. That monthly payment can be saved or invested until I need a new car. That's great news!

If the idea of taking a close look at your spending freaks you out, you're not alone. But you ARE the only one who can find out what you need to make to feel safe. And once you know, every other decision becomes clearer.
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Did you bite the bullet and add up the cost of your life? I'd love to hear what you learned. 

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