Golden Handcuffs and Lawyers: The struggle is real
What are "Golden Handcuffs" in the Law?
The struggle is real when it comes to golden handcuffs and lawyers. If you haven’t heard the term “golden handcuffs” or aren’t totally sure what it means, the Unbillable Life has a plain language description of what the term means and how it applies to lawyers. She writes:
“… golden handcuffs is the term used when those making large (e.g., Biglaw or investment banking) salaries get sucked into the world of “keeping up with the Joneses,” always needing to buy more and more to keep up with an inflated lifestyle they have created for themselves.
They become trapped in this lifestyle by a pair of invisible “golden handcuffs” wrapped around their wrists. In order to maintain this lifestyle of high-spending, they must continue to make the same, or greater, salary for the foreseeable future.”
You should check out the Unbillable Life’s post: Golden Handcuffs: A Cautionary Financial Tale.
I saved a 7-month Emergency Fund, so I thought I'd be immune from Golden Handcuffs
Or so I thought. Turns out, I was wrong.
In 2019, one of my financial goals was to save 6 months worth of expenses into an Emergency Fund. This financial goal included maxing out my Emergency Fund as fast as I could.
My monthly expenses, on average, were around $4,000 so x 6 months = $24,000. But, because I love round numbers and didn’t really like $24,000 as a number (it just looked ugly), I thought what the heck, I’ll make it a solid $30,000.
This emergency fund was my first ever emergency fund or large pool of money that I had ever saved for “just in case”. Because when I had student loan and car loan debt (of $98,500) and was working on paying that off for 3.5 years, I chose to pay off all my debt and invest in my RRSP (retirement savings account) but NOT have an Emergency Fund. That decision kept me up at night sometimes, but in the end it all worked out because here I am with $30,000 in my Emergency Fund.
Tip: If you’re struggling with deciding whether to pay off your debt, invest or save for a rainy day or a combination of the above, I suggest doing what makes YOU the most comfortable.
The "why" behind my Emergency Fund
So at the beginning of 2019, one of my financial goals was that I start and build an Emergency Fund. I planned to save 6 months worth of living expenses, so I didn’t have the pressure of having to earn a salary for at least 6 months, if that’s what I wanted or if that’s what happened. I saw my Emergency Fund giving me the flexibility and freedom to choose what I would do with my time. Whether that was explore my passions or get another job, in the law or out of the law.
I thought I was set when I’d finally saved $30,000 in my Emergency Fund. Because I thought that my Emergency Fund was going to solve all my problems and give me an immediate way out, if I wanted it or if something happened that I was ready to say “I’m over it and I’m out”.
E.g. me getting so stressed and overwhelmed by the practice of law that for my own well-being I needed to leave, or just take a mental health break.
I thought it was going to give me the power to do what I wanted whenever I wanted.
The Struggle is Real: I can't walk away from my 6-figure salary.
My Emergency Fund made me feel immune and more powerful than the golden handcuffs experienced by lawyers. I thought I could take them off anytime I wanted. Before experiencing a really uncomfortable moment in December, I thought this was true.
I ended up having a super stressful couple of weeks at work where I was constantly putting out fires and always finding myself behind on deadlines. And, that’s just not how I work, so I found myself living in survival mode.
Anyway, in the midst of all that, after a visit to a senior lawyer’s office on how I had missed the mark on something, I went back to my office and just started crying uncontrollably.
I was debating in my head whether this was it, this was the moment that I was going to walk away and if I had had enough. Or, if this was just a momentary culmination of bad days and that “this too shall pass”. After those thoughts and not really having an answer to any of them, my first thought was I can’t walk away from my salary. And, my second thought was shit, the golden handcuffs got me.
This surprised me because I had thought with the Emergency Fund that it would’ve been so easy to walk away from how much money I was making, but the opposite was true. It was the reason why I COULDN’T walk away, whether to find my passions or get a lower paying job. At this moment, I realized how powerful the golden handcuffs were, no matter how committed I am to the why of my Emergency Fund and our path to financial independence.
Lessons Learned about Golden Handcuffs & Lawyers
I was disappointed in myself. I was disappointed that money was the deal breaker and not my mental health or well being.
Golden handcuffs are real. The thought of walking away from my current salary and future earning potential was something I was not prepared to do, even with 7 months worth of expenses saved up.
Lessons Learned:
- An Emergency Fund isn’t the only thing you’re going to need to be stronger than the power of golden handcuffs. I’m no longer relying just on my Emergency Fund to be my “out”. I’ve pivoted instead to living an intentional life and creating the life I want to live on my terms (or at least as many of my terms as I can). Money can solve a lot of problems, but money alone can’t solve them all.
- Find out and explore your WHY OF LIFE. If you want to learn more about yourself and discover your why of life, I highly highly recommend these 2 podcast episodes:
- For me (and hopefully not for you), it’s going to take something more serious than uncontrollably crying in my office or panic attacks (which I’ve had 2 before) for me to choose my health over money. I know this isn’t good, but the first step is awareness and at least I’ve got that.
- Constantly evaluate how you can live your life more intentionally and incorporate your passions into your every day, so you’re living for more than the pay cheques. As of 2020, I’m evaluating my life daily, weekly and monthly. I’m making myself accountable and honouring my calendar and commitments to myself. This has made such a difference just in January. I’ve already noticed differences.
Want to read our other personal finance content? Check out our other money posts:
- 20 Frugal Money Tips I've Used to Build Up My Savings: You Can Start These Tips Today!
- How We Are Now Starting to Avoid Lifestyle Inflation - After Buying 2 luxury vehicles after our law degrees
- How to Get Your Finances Back on Track - 9 Steps to Organize Your Finances
- Close to Paying Off Your Debt?! Celebrate With a Countdown Calendar - it's easy to make, FUN and best of all, FREE!
- 19 Ways I Used to Pay Off $98K in Student and Car Loan Debt
- Are you a Canadian? Learn here about the TFSA and RRSP as investing vehicles!
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One thought on “Golden Handcuffs and Lawyers: The struggle is real”
Great post, Ms. OYP! Golden handcuffs are so powerful because you don’t have to be spending a lot or trying to keep up with others to feel trapped by them. When I was in Biglaw, I wasn’t spending a ton of money, but I was totally trapped by the golden handcuffs because every time I got that paycheck, or the year-end bonus was just a few more months of work away, I would question why I would ever quit when I was getting paid so well. Once I realized there were other things out there that were way better than money (my time and freedom), it was so much easier for me to give up the salary. It sounds like you are making some great changes for your health and well-being and I hope your year is off to a great start!