‘Golden handcuffs,’ defined, refers to special benefits offered to an employee as an inducement to continue service.
The meaning can be both positive and negative.
In a positive spin, companies invest significant resources in the hiring and training of employees. ‘Golden handcuffs’ (such as benefits) are intended to help employers hold onto employees that they’ve invested in and ensure that their best employees do not leave.
In a negative sense, the phrase is often associated with individuals staying at a job they are not happy in, but not willing to leave because the financial loss would be significant.
(The negative connotation is the most common use of the phrase in the English language).
Here’s the thing about golden handcuffs, and why the negative connotation is the most common use, most people wearing them don’t realize they’re wearing them. That’s why it works.
I have a friend in the Pacific Northwest who coaches unhappy, but otherwise successful businessmen and businesswomen. When she explained her work to me, she put it this way, “The thing is that most of these men and women can’t even imagine another way. They’ve become so accustomed to their salary and benefit package, they can’t see there is another way to live. They are not happy, but feel trapped in their own lifestyle. But there is always a way out.”
I have begun to move beyond the employer-employee relationship when using the phrase: golden handcuffs.
I see golden handcuffs as the proper term for anybody who has begun to embrace a higher standard of living that they see no escape from.
Lifestyle inflation has become the norm and stepping back from it is difficult—regardless of where you started or where you end. When comforts and luxuries become needs, lowering the floor of a lifestyle becomes increasingly difficult. We become bound to the lifestyle we begin living—even if we’re unhappy in it.
This lifestyle inflation may occur because of income or credit, but once a level of lifestyle has become realized, it is virtually impossible to willingly step away from it:
- It’s hard to imagine a 1,400 square ft home is sufficient, once you live in 2,000.
- It’s hard to imagine a vacation down the road can be just as enjoyable as a holiday in Europe.
- It’s hard to imagine a 2005 Honda Accord can get you the same place as a 2020 Lexus.
- And it’s hard to image a $20 purse can function as well as a $200 designer bag.
As our lifestyle inflates, so does our expectation. Walking away from it, in any and every sense, becomes unthinkable. Golden handcuffs.
Of course, it is also important to point out that the term “golden” misrepresents the deceptive nature of riches and lifestyle.
Whenever we throw around phrases like “rich,” “successful,” or “golden,” we immediately excuse ourselves from the label.
“I’m not rich.” “I’m not wealthy.” “I’m not part of the 1%.” Those phrases always define the other guy—the one with more money than me.
When we do, we immediately excuse ourselves from the conversation. And the deceptive nature of the golden handcuff lifestyle goes unrecognized.
- My life isn’t golden… it’s just middle of the road.
- My house isn’t too big… it’s just the size we need.
- My car isn’t too expensive… it’s what I deserve.
- I don’t buy things I don’t need… I need everything I own.
- I can’t be wearing golden handcuffs… I’m barely paying my bills.
When we fall into the trap of thinking lifestyle inflation has only affected “the other guy,” we fall into the exact trap the phrase golden handcuffs was meant to define. We’ve become so accustomed to our current lifestyle or standard of living, that we can see no other way to live.
And suddenly, we are trapped.
Golden handcuffs don’t have to be golden, sometimes they are silver.
And more of us are wearing them than we realize.
But there is always a way out.
About Joshua Becker
Golden handcuffs are the ultimate trap for financial independence. You earn more and then spend more and then get caught the cycle. Much better to use raises to pay down debt and invest.
Nice. A simple truth. Thank you.
I, too, am bound by golden handcuffs, which in my case means working at a job I despise, in an industry not aligned with my values, to obtain a pension that my family is counting on. I’ve been counting down the years to retirement for what seems like a lifetime. So, thank you for a thought-provoking article. I’d love to see a follow-on piece called Part II — Breaking the Golden Handcuffs. Or, maybe that is what your entire blog is!
Joy
A very thought-provoking article, except for health insurance. With a husband recently diagnosed with a chronic illness and a child with some mental and emotional disabilities, health insurance becomes the greatest consideration of “compensation.” Sometimes the handcuffs aren’t a failure of imagination so much as adult responsibilities. The main these, though, is still very interesting. I’d say that for many, it starts in college, because freshmen don’t expect their standard of living to temporarily decline while in school.
Fascinating post. I have never heard this term before. My wife and I moved away from “home” two years ago to teach in a foreign country, and we are nearing the end of it all. Soon we will be moving back and into our first family home – old but restored, simple but paid for completely. We talk often about how we have the chance to reset our lifestyle and budget and more. We get to be deliberate about what we bring into the home from Day 1. It is exciting to think about starting fresh and building in margin for time, money, energy, etc.
I subscribe to a number of informative and inspiring lifestyle features, and I am very happy that I stumbled upon Becoming
Minimilist recently. It’s not just about getting rid of stuff, it’s about changing your focus. The articles have already inspired me to get rid of some items I thought I would never part with, and I am looking forward to a simpler life with more time for what and who I love. Thanks Heath!
I was a corporate officer at a Fortune 500 corporation and our handcuffs were in stock rights worth several hundred thousand dollars. But that didn’t mean we had an inflated lifestyle. I just liked my job and couldn’t see retiring and leaving that much money on the table. So I stayed an extra year and got a bundle. We lived on less than 25% of what I got paid that year. High pay doesn’t cause life style inflation, bad choices do.
I love this article!! It’s so true and I was just thinking about it the other day. I’m trying to find my way out of the golden handcuffs. Please continue posting on how to get free! Thank you!
This blog was inspiring and reassuring. I am four weeks away from leaving a six-figure salary and the accompanying golden handcuffs and stepping out in faith that I will be able to provide for myself doing consulting work and other “gig-style” jobs. It has taken about two years for me to finally get the courage to take this step. 2020 really brought home the realization that the golden handcuffs also kept me bound to an ideology I didn’t fully subscribe to. It’s more important to me that I live and work in alignment with my core values, even if it means I may earn less. I am challenging myself to focus on the abundance I will gain in other areas of my life. I’m excited to have less stress, more connection with others, learn how to do more with less, and grow as a person.
Best of luck to you, Anne!
I went through similar experience.I gave up my previous job of 18years because it was getting too stressful and unbearable to cope.Got another job that pays less.No regrets!
One of the happier times in our lives was when we had bought a few acres in the country, built a little house one weekend at a time and did without a well for a while after we could move to it. We had electricity but couldn’t afford much else. We had an old washing machine which I filled with rainwater caught in a drum and I hung clothes on the line. We ate from our garden for the most part. We drove an old pickup and hauled free manure from friends barn for fertilizer. Because of that experience, we have always lived a simple life. We save and buy a used car when we need one and our house is paid off which was the only debt other than a few medical bills here and there. At 78, life is good.
My BIL and his wife are wealthy and tied to their jobs to keep their wealth. They feel sorry for us but we are the ones who are blessed. There is peace and joy in a simple life. You can’t take a U Haul to Heaven.
Amen to that 🇺🇸
Johann Wolfgang Von Goethe — ‘None are more hopelessly enslaved than those who falsely believe they are free’
That applies to many aspects of life these days. I was never in the realm of big house or $200 purse, but suffer because of my own inertia to break free.
What traps us is lifestyle orpossessions we enjoy. That fondness becomes a weak point that binds us. It’s having the fortitude to break free of invisible barriers. Seems we must do without to make changes, face insecurities. There is life beyond it. Never too late to seek a creation beyond our current handcuffs.
Do you think that most people assume that contentment is inherent in some people and not in others, like the color of our eyes? I don’t. I think it’s a learned behavior. And it’s hard. If it was easy, everyone would be content. I also think that the world has muddled contentment and complacency so that we feel guilty being content.
Good pint Jovanna. I struggle with contentment vs complacency. I often feel quite content but then this little voice in my head creeps and telling me I’m not doing enough or I don’t have enough and I start to doubt whether I’m truly happy.
I am feeling that way today!
I agree Jovanna. We are living in a twisted world right now. But, that should not affect out contentment. You are right, contentment is an active choice on behalf of gratitude and thankfulness.
Do you think there has always been a struggle with contentment/ complacency, or is it because of social media that we have this struggle. My parents and all my aunts and uncles are gone now, but I often wonder if they felt the same way. They basically all lived simple lives, but did they feel they weren’t doing enough? Might be a good topic to bring up the next time the cousins get together.
Great post. It makes me think of these home shows where the families all seem to “need” walk in closets and huge bathrooms. They make fun of bathrooms the size we have… which is more than adequate. But when I was in the peace corps my bathroom was a concrete outdoor shower and a hole in the ground. I’m sad by the inflated thoughts people have of what they need and how that’s tying them in a bind… with their gold or silver handcuffs. And it’sa good reminder to me too… I loved that outdoor shower. Thank you for this connection!
I walked away from a 6 figure income in 2018 at 56y/o.
The toll of the stress, drama and unreasonable expectations of the workplace was especially noticeable to me once I was out of the proverbial rat race.
The shift from 12- 14 hour work days to volunteering, starting a small business and becoming involved in politics has been a huge relief. We have focused on our lifestyle which includes our health! We are both very healthy and I can honestly say, I am truly the happiest I have been in my life. The universe gives us what we need. This article was what I needed to read today as a reminder of why I made the shift!
Today we continue our journey, have stopped a lot of unnecessary spending and continue to evaluate what we need to spend vs. what we “want” to spend.
My story is very similar to Mark’s. I worked in large Insurance organisations for many years. Toxic culture but decent salary and benefits that locked you in – for example they gave you shares each year but they aren’t truly yours for 4 years and if you leave you lose them all….. so very hard to walk away and leave all ‘your money’ behind. I spotted a clause in my contract which said that I would lose my shares if I went to a competitor but could keep my shares if I retired. So I retired …… have not regretted it for a single moment. Have moved to a smaller house in a small town, am working a few days a week for a small startup for less than 20% of my previous pay check but am so much happier – being happy with just enough money is so much better than being miserable with too much money….
Interesting article. Sometimes, I think I am in Golden Handcuffs, however it is not for a lifestyle inflation as I live a pretty minimalist lifestyle and forever searching for ways to simplify more. I do it because I have two children who never got much from us in life because of our minimalist ideals. I think they are better people for it. However, we felt the greatest gift we could give was an education and planned so accordingly. Packed away all of the money gifts given since that positive test, so really has always been their own money. Also, because I was given the gift of the mindset for service to others but am in an industry where that takes an big emotional toll, so maybe it is my frame of mind and perspective. Always a work in progress.
During my 30 plus year career in the oil patch I watched many of my co-workers succumb to the handcuffs. The oil industry has so many boom and bust cycles that I never trusted the big pay check would continue. Blessed to be able to retire 7 years ago at 56 in part because my husband and I are savers. Favorite car is a 1999. Now working on breaking the bond of saving stuff “just in case”.
Fantastic article. So sadly true for so many people. And in turn teaching the next generation the same thing.
Thank you, Joshua. This is a brilliant article and it really jolted me out of my complacency. I would never imagined I was one of those in golden cuffs, and I can see numerous areas of my life where those cuffs weigh heavy. Time to get them off.
This really hit home. The simple explanation really has me thinking, as I have recently had feelings similar to being bound in a life not authentic to myself. Thank you for sharing this.
Right on the money! My husband retired when he was 50. He is now 80 and we have 3 times what we had when he retired. Down sizing everything. We gave away “things” and didn’t buy more “things”, only what we needed. There were things we did that we didn’t have to do. We put off doing things until we retired and shouldn’t have and now because of health we can’t do them. Small regrets, but we are happy with what we have. We both were frugal most of our life, so it wasn’t hard to cut back to retire.
No important regrets. We give to our church, children and grandchildren. We shouldn’t give to our children and grandchildren, but it makes us happy to help with their education and their needs. I don’t think we have helped them to be frugal, but they have learned so things from us.
A new expression for me, but so true. Thanks for a beautifully written article.
This post hit home! Yes, I did move from a 2,000 & some square ft. home to one that is 1,400 after my husband passed away. My daughter & her husband asked me to move across the state to take care of their new baby while they work. Yes, I did get rid of lots of things to fit into my new home. Yes, I do drive a 12 year old car that I plan to keep until it starts to give me problems. Thank goodness I had been following Joshua Becker & was adopting his train of thought while my husband was still alive. Thankfully my husband was a good financial planner! If you find yourself parring down before you are fully ready, my advice is to get rid of things slowly. I got rid of SO much so quickly that, for a while, I felt like I was erasing some of my identity. I have a large shed on my property where I have things that mean a lot to me, but are never used, still stored. Maybe I will get rid of them someday, but it will be a slow process.
This is a fascinating article. I have never heard this term before, but it makes a lot of sense, that one can get caught in this trap with no idea of a way out.
There are a lot of ways to embrace comfortable frugality that can help you to hold on to your money better. One little trick I got from the Penny Hoarder. Every time you get change & have a $5.00 or $1.00 dollar bill, put it in a can/jar & forget about it. Then maybe check the amount save at the end of the year & you will be surprised how quickly it builds up. The other thing I have done all of my adult life is to shop second hand, & I have received a comment from one family member saying she could have saved a lot of money over the years if she had done this sooner.
Gratitude is the key for me, as well as stepping away from comparison with others. I am grateful for my aging car and am willing to maintain it regularly so that it lasts for many years more. I need to practice gratitude for it when I show up at the parking lot and it looks smaller and duller than all the shiny new cars around it…this old car has released me from a car payment and high auto insurance. Grateful for homemade pancakes which entice my college aged kids to get out of bed and have a scruffy breakfast together. We don’t need restaurants to have a genuinely good time. Grateful for boots, jeans, jackets that age with me and look better with time, as I hope I do. A long walk or a day trip to the country is as good as a vacation for me. My dog brings daily waggy joy. My simple life is abundant as it is, and I am deeply grateful for it. Thanks for an inspiring essay.
I loved your comments/thoughts and needed to be reminded of gratitude today!
I remember hearing this expression years ago when working in the film business. I thought it fitting. And I’ve never forgotten it. Thanks for a great article!
So many people I know have “golden handcuffs”. I have a different spin on this. Though my lifestyle is not very extravagant “by North American standards” I have a serious illness for which there is no cure. My workplace benefits are actually more valuable than my salary! I have some tough decisions to make on this front, but having embraced a minimalist lifestyle I don’t have a lot of “fancy” things to consider in the equation.
Exactly. Everything you said here can apply to retired folks like me as well. We can get so comfortable in our retirement lifestyles that sometimes we can’t see how we could live better. A kind of paralysis sets in, even though we might be unhappy with the current situation. Thanks for the post.
Jeff
It’s amazing when you lower your lifestyle expectations, what you can achieve when you look at things as cheap material and stitches on a sewing machine. I think Covid has taught people a lot but I also know that it will most likely go back to normal, just like after the crash of 2008.
I am living on benefits, which would seem a fairly low income way to live, but I looked at what I was receiving in the way of money about 4 years ago. I am now getting significantly more. And yet I don’t seem to have any more money lurking around. I know that the price of things has gone up, but I think I have relaxed into having more money and am not trying to be as frugal now. This post made me think as to whether I would do myself more favours by stepping back a little.