‘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.
Bonnie McCaleb says
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.
Terry says
A new expression for me, but so true. Thanks for a beautifully written article.
Sue says
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.
Becky says
Sue, I find myself in a similar lifestyle situation. My husband passed away after a brief illness in 2020. I sold our home and moved to a smaller home with a big “shed”. My husband was a saver – if something still had value to him, he saved it. He grew up on a farm, so I think that was the lifestyle he was accustomed to. I was a saver too, but a sentimental one. I ended up getting a 30-yard dumpster and finally got rid of 2/3 of what we had accumulated over the years. I still have a big shed full of things that might have some value, but because they remind me of him, it’s mostly sentimental value. This past year has gone by in a blur and it will probably be a while before I can let go of these items that I no longer need or use. Best of luck to you. Enjoy your grandkids!
Maria Pinto says
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.
BEL says
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.
Beth says
I loved your comments/thoughts and needed to be reminded of gratitude today!
Stevie says
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!
Krys says
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.
Jeff says
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
Rhonda says
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.
Laura says
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.