‘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.
Debbie says
So very true, thank you for this excellent read.
Dividend Power says
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.
Naomi says
Nice. A simple truth. Thank you.
Bette says
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!
Renee says
You just described my exact situation too. I feel trapped in my situation because my family needs my health insurance, and retirement account. (Spouse doesn’t have one). I live below my means and in a small place, drive an inexpensive car. But, without my current salary, even that wouldn’t be possible due to high cost of living, etc. I too would love to see a follow up article!
J says
Joy
Celia says
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.
Steph says
That is definitely my situation. Bound by free healthcare on top of decent wages and working from home. Everyone tells me to be thankful, which I am, but I’m missing the most important years of my young children’s lives. I’m miserable and my husband doesn’t support me quitting.
LC says
I can relate to that feeling. Have you looked at the financial independence movement to see if you can eventually go part time or leave altogether with a solid financial plan? This is what finally got me to be okay with having the kids in childcare while at work.
Heath says
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.
Mary Jarratt says
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!
Steveark says
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.
Amber says
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!
Anne M. says
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.
Jean B. says
Best of luck to you, Anne!
David says
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!