From Financial Panic to Financial Peace

162: The Single Paycheck Trap: Why Smart Women Stay Financially Stuck

• Sharon Singh Sidhu • Episode 162

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Have a 6-figure salary but still feel financially insecure? You're not alone. In this episode, I share why I quit my high-paying job without a backup plan and what it taught me about the hidden dangers of depending on a single paycheck.

You'll discover why salary increases don't fix financial anxiety, how 'stable' jobs aren't actually stable, and the mindset shifts that keep professional women trapped in financial dependence. Plus, I'll share exactly how I turned my corporate skills into $20K in side income over a couple of years.

If you're tired of feeling powerless about your financial future despite your professional success, this episode is for you.

IN THIS EPISODE, YOU'LL LEARN:

  • Why your 6-figure salary doesn't make you feel financially secure
  • The hidden cost of depending on one income source
  • What happened when I left my "stable" job (spoiler: it wasn't stable)
  • Signs you're trapped in single paycheck thinking
  • How to start building income security this weekend

KEY TAKEAWAYS:
The 'cost of privilege': When everything was provided for you growing up, you never learn to trust yourself with money.

High salaries = golden handcuffs: They consume all your time and energy, preventing you from building multiple income streams.

Financial security starts from the inside out: Your beliefs about yourself matter more than the actions you take.

You don't have to choose: You can be both an employee AND build side income simultaneously.

MENTIONED IN THIS EPISODE:

  • How I turned leadership training skills into $20K extra income
  • LinkedIn networking strategy: From 100 to 3K followers
  • The lunch break and weekend morning side hustle approach

CONNECT WITH ME:
Ready to break free from the single paycheck trap? Let's connect:

Love the show? Leave a review and share it with a professional woman who needs to hear this message!

SPEAKER_00:

Hi there and welcome back to another episode of the podcast. Today I wanted to talk about the single paycheck trap that keeps many smart women financially stuck. So I, you know, I have a pretty good salary, like six-figure salary, but still used to feel financially insecure. And it's kind of a paradox, right? Because we have like many, many smart, successful women who have good incomes, are making good incomes, and yet they're still feeling broke. And so I wanted to take some time today to talk about this, beginning with my own personal story. So, you know, I, over a decade to go now, decided to quit a very well-paying job, I'm talking about a six-figure salary job, and quit without a backup plan. And this situation really taught me a thing or two about the idea of the single pay check trap. So you might be wondering, well, you know, what made you decide to do that? It seems so irrational, right? But actually, this is the thing that a lot of people may not maybe don't talk about, don't realize, are not conscious about it. I definitely grew up in a very privileged background, upbringing. My parents provided for everything. You know, I was on my own father's scholarship and went to study overseas, which was back in the day, you know, no small feat, you know, for my dad, who was the single Brit winner for the family, for myself and my brother and my mom. So, you know, he sent both of us abroad to do our university degree and at the same time mind you so it was like I still wonder how he managed to do it and they told me that my parents told me that they actually didn't really spend a lot of money and you know they also worked around a budget and so I'm very grateful for that but the thing is now as a parent my husband and I also want to provide the every you know like the best that we can for our family but sometimes when we do like we overdo this what happens is that we never learn to trust ourselves with money like I never really had to make my own money when I was growing up. And so all I needed to do was focus on the traditional model of go to school, focus on your grades, do well in school, get into good schools, get a good job. And so while that worked out very well for me, and I continued to grow and progress up the corporate ladder. So I mean, financially, I was successful because as you move up the ladder, of course, you get better, bigger paychecks, right? But emotionally, I it did still feel like a scared little girl that needed somebody to, someone else to take care of me. So that coupled with the very traditional upbringing I saw all around me where the man would go and make the money, right? Be the person, the breadwinner who brings the bacon home and then the woman would stay, the wife stays home to take care of the family and the domestic affairs. So I grew up in that kind of environment. But what happens is that, you know, I never had the opportunity to go create my own money and therefore I never built the confidence that I was able to. So this is really the cost of privilege. So if you're a parent and maybe you are also in a position where you can give your kids a very good life, I think all parents want to do that. But we just need to balance it and give them opportunities to go see for themselves that they actually are capable to make the money that they want. But I think like the inner story and the belief system that developed over time because of this is that therefore my inner story was that I wasn't good enough, or at least I didn't know that I was good enough to be able to make it on my own. So even though this not good enough feeling drives a lot of successful high achieving women, because there's this perfectionist in us, right? We always want to be learning, improving, striving to be better. And that helps us definitely accomplish things in life, in our career and be successful. But the flip side it is that you can constantly feel like you're never enough. You're never capable enough. And when it comes to money, for me, it felt like I needed someone else to take care of me or something else to take care of me, like a job or a husband to provide for me. And the thing is, that's the illusion, right? The job security, it is all just an illusion because your job can literally disappear overnight. We see this more and more now with corporate layoffs. And I think that when you're in a high paying job, it's even worse. The illusion is even greater because we think that by being in a higher paying job, we are more financially secure, right? And that's why, that's what drives a lot of people to want to make more and more and climb the corporate ladder because you think, I mean, first of all, you think that with more money, your life is better. Another false illusion. Up to a point, up to a point, okay? And then the other illusion is that the higher you go, the more you earn, the more financially secure you are. But actually, I feel like it's even worse because when you do lose the job you actually have more to lose right you have a bigger paycheck to lose and and this can happen overnight so in a way it's kind of like golden handcuffs right higher salaries can keep you very dependent you know because the more you earn the more comfortable you get the more of a certain lifestyle you get used to the harder you fall if you lose it and so you you just stay trapped and also the the thing is the bigger the job up, the greater the scope and the responsibility, they tend to take up more of your time and energy and that all your extra time and energy is spent kind of like doing that bigger job. And that prevents you from having any time or energy left to do anything else, right? I mean, if you have a family apart from your work, if your family, you're depleted by the end of the day and the end of the week, and then you just live for that, you know, vacation a few days, a couple of weeks a year. And you just have no more time and energy left in you to go brainstorm, get creative and generate multiple income streams. And so you see how this like perpetuating cycle now. So that's why we call it the golden in handcuffs, right? So, you know, for me, that really happened to me as well. I think over 10 years ago, I realized that my salary wasn't safety. It didn't provide the kind of financial security I thought it would despite spending a lot of effort and putting in a lot of time, energy, you know, and to do my best. It didn't really provide the kind of safety and security I thought it would because over 10 years ago, I had a personal tough, a a tough personal situation right and the the work was making it a lot worse for me and you know I felt like I had to I had to quit my job in order to take care of my own emotional and mental health and protect my marriage because it was putting a lot of strain on my marriage right and so I did that and I resigned to protect my family, protect my own mental and emotional well-being, only to find myself stressed out about not having any income coming in, right? So I only had the regular bills and mortgage to pay and no regular income to pay it. And that's when, that was the moment, I would say, that was really the moment when I realized, the realization hit me and I decided to never depend on a single paycheck again. And that was when it really started my journey into, you know, side hustling and looking at side incomes, creating multiple income streams in a way where I didn't have to quit my job, which meant that it had to be done in a way that took little time, right? So I think that's why everyone is so obsessed with passive income, which personally, I feel that it's initially, at least it's not completely passive. In fact, it's very, very active. It's kind of like you have to make the investment of your time and energy upfront. And then later on, you can actually take take a little bit more of a hands-off approach. But in the beginning, definitely very active, right, on your part. Okay, so... That was the thing that I just wanted to, I guess, expose this illusion of security when actually, you know, the higher the salary you earn, the actually more of a risk you're exposed to if you just put all your eggs in the one basket, right? And so that's kind of the second thing I wanted to talk about, which is the hidden cost of depending on your one income source. What happens is that if you're only dependent on that single income source, you just have no negotiating power with your lawyers, you know, because you can't afford to lose that. You're totally dependent on your single paycheck. And if you have family, your entire family is totally dependent on that paycheck. And you can feel trapped, unable to walk away from a bad deal. And I'm saying all this, you know, not to make you feel bad, but just to share that this is exactly what I had gone through. And that what really convinced me and got me so committed to not putting myself and my family in that situation. So I know in the past, I used to not even dare to speak up at work because, especially when I have an opinion that's different from others, because I was afraid that if I really spoke my mind, I would get fired for it. And what I've discovered, actually what happened is because I started creating other income streams, I've got less afraid to speak up. And the irony is that when you stand up for what you believe in and you say in a professional, respectable, kind of respectful way, and so you still, you're assertive, but you're not rude about it, right? You actually command more respect. and you actually gain more credibility and people actually realize, oh, okay, yeah, she actually stands for something. That's the irony. But it's hard to get there when you feel like you have no negotiating power with your employers, right? Especially when everything, it's like all your eggs are in one basket and that puts you in a very vulnerable situation. Your retirement is completely dependent on the one source. Your day-to-day cash flow is totally dependent on the one source. And so it just compounds. And we all hear about diversifying our investments all the time, but we don't really think about diversifying our income, right? And if you think about it, if you're the person generating the income, it means that you also need to diversify your time and energy, right? To create diversified sources of income. But most people, what they do is they put all their eggs in one basket, a job. And so you only generate that one income stream, right? And so I just wanted to get you to think about that, right? You wouldn't never do that with your investments. So why would you be doing that with your income, right? So, you know, when I decided to leave my job, as I was saying earlier, because of the strain I was putting on my marriage. And, you know, at the time, I just felt like leaving the job was what I needed to do to take care of my family, to take care of my own mental and emotional health. But it was a real wake up. call moment for me because without another backup plan financially and at the time I was also the sole provider it really meant that you know it was such a rock and a hard place I was having to choose between taking care of myself so that I can continue to earn and then also jeopardizing my ability to provide and take care of my family's well-being it's like the worst place to be in you know and um I just realized that wasn't how I wanted to live anymore. And I also realized that the concept and the idea of stable jobs, you know, stable jobs, jobs aren't actually stable, right? I mean, at least not anymore. Maybe back in the old days, it was like that. But it's kind of a different world that we live in now, right? I used to think that if I had a good job, everything would be okay. But then with my own situation back then, when I... left without a backup plan, and with the layoffs that seem to be very common practice these days, stable jobs really aren't stable, and therefore putting your entire family's well-being in the hands of someone else besides yourself, I feel is the worst risk I could take on. I mean, just does not make financial sense to take on that kind of a risk, right? And so what I wish someone had told me before all of that happened was that to kind of like really tell me that I have what it takes to make the money I want. I think that root kind of like core belief was that I did not have what it takes to make the money I want. Therefore, I needed to depend on a job and depend on a husband and depend on somebody else. that I also wish that back at that time, I felt like I always had to choose between being an entrepreneur or an employee. But the fact is, you can be both at the same time. So up to today, 10 years later, I still work in a full-time job because I do value the collaboration. I like the interaction. I like going into the office, the routine of that. I am doing work that I excel in and that I really love doing. Plus, I really love the regular paycheck and the benefits, right? And so, you know, then I do the side business outside of that, like during lunch breaks and weekends, right? So, I mean, at that time, I was just kind of like, I don't know why I thought that I had to, I could only do one or the other. I could either be an entrepreneur or I could be an employee and I couldn't be both at the same time. For some reason, I thought I just wouldn't have the time. And I think the third thing I wish someone would have told me back like 10 something years ago was that financial security actually begins from the inside out. So when I started getting into the world of personal finance, everything I was looking at was all about all the outside-in approach, meaning to say, oh, you have got to cut your expenses, you've got to have a budget, you've got to save, and then you've got to take the extra money to go invest, and then they tell you to invest in index funds, and then you don't pay your credit card. I mean, you have to pay off all your credit card balances, and then there was the snowball effect, and all of that, right?

UNKNOWN:

Yeah.

SPEAKER_00:

And if you notice, lots of people talk about it from the very action point of view, investing strategies, you know, what you should do, do, do, do, do. But nobody tells you that it starts from the inside. It starts from the inside in terms of how you see yourself, your identity, your self-image of yourself. what beliefs and stories you tell yourself around money, around yourself, matter far more than those actions. Because if you take action from this fearful, insecure place where you feel like there's never enough, the actions you take are always going to be very desperate, needy and insufficient and fear-based, which I really sometimes get quite worked up about that the personal finance space uses fear instills fear in people to go save. It's always about how, well, if you don't have enough savings, you're going to be doomed when you grow old. And I just don't think that's a very empowering place to motivate people. So a lot of people then do it out of fear and fear only takes you so far. Whereas if you work on your insight first, your identity, your belief, yourself, your trust in yourself, the trust in the way you see the world, that there's more than enough and there's plenty and this is abundant, which is hard to do, I know, because sometimes our real physical reality does not reflect that. But that's exactly the work that needs to be done. Because when you take actions from this place of complete belief and trust in yourself, that you can make things work no matter what, this sort of 100% self-absolute confidence brings about a lot of calm and a lot of clarity. So you don't panic. You don't make impulsive decisions. You're very clear-headed and you're very objective and you can truly assess risk properly. Like, for example, the risk of depending on a single income. and not be stressed out and scared about it. So say even if you really are in that situation, there are actually things you can do already today that's going to help you. Okay, you don't have to live in fear and helplessness all the time. So if you do find yourself trapped in single paycheck thinking, you know, here are some telltale signs. I share mine because these are, I know them very well. And maybe you relate with some of them, right? Like you're worried all the time about job insecurity or job security. You're wondering if you're the next one to be laid off. You're feeling too afraid to say what you really think because you're worried what people will think. Will you get fired? Will your boss not like you anymore? Okay. You stay in a job that you hate because you need the money. You don't believe you can get a better job doing the work that you love to do. You think you're too old and you've been in the job too long to find something better. You think you're too young and you're too inexperienced to get a better paying job. You feel powerless about your financial future. Like me, I used to be so terrified of looking at my bank balance and every time my bank balance drops because I had to pay something, I panic. And then I was feeling so resentful to my husband and nagging him about doing better and making more money. I mean, that could have been very enjoyable. I probably was a very annoying person to be around with at that time. And so I'm just like feeling resentful about the small salary increment and bonus I was getting despite all my hard work, resentful for the company and resentful towards my bosses. And that really doesn't help. And I think the worst of all is like the mindsets that keep a lot of us women trapped, that somehow we just feel like we don't have the capabilities to make the money we want or to be an entrepreneur. We feel like we don't have the time to start a side business. We already have so much on our plate. We're so busy already. We don't have the money to invest in the stock market or put into a business. So this helpless, powerless victim mindset really is what keeps a lot of us stuck and trapped in that negative reinforcing cycle so we never break out of that cycle so how then you might be wondering okay okay fine this is all sounding very doom and gloom but what exactly can I do and the thing is I started really small I also started taking like the most obvious steps in front of me first thing is I actually just called the bank to understand my bank statement and credit card statements to understand exactly how much interest I was paying on the mortgage to understand when I needed to refinance and should I refinance was it worth it you know I just really just started calling customer service of my credit card and my bank and just spoke to the officer and asked really basic questions you know it was a little bit easier because I didn't have to see the person face to face I didn't have to feel embarrassed or ashamed and I just I just asked really really basic questions what's what's a late fee what's a finance charge what are these for you know and i found out a lot of things that you can do to like prevent like not have to pay these fees you know um But let's say you say to me and say, you know, I'm a full time working mom. I've got young kids. I have housework between housework and my job. I don't have any time. Well, you can start with just 30 minutes. I use my lunchtime and weekends. Now my kids are a bit bigger, but when they were younger, I woke up way earlier. I woke up at 4.30 to 5 to do like half an hour. Now they're a little bit older, so I can kind of leave them on their own on the weekends. They have their own things to do. And so I just take an hour every morning. on Saturdays and Sundays. So these are very practical weekend actions you can take. Well, first of all, look at Make an inventory of your skills and your experience. How else can you use it to generate incomes outside your job? Like for me, I'm a leadership trainer in my full time job. And so I started freelancing as a leadership trainer and I turned that into$20,000 in extra income over two years, which was very, very nice, right? Very lucrative. We're not talking about making a million bucks overnight, but these are definitely significant amounts of money that can really help, right? And then the other thing you could consider to do is maybe just try and experiment with one experiment to make extra money or make multiple income stream, right? Like just find another income stream. So maybe you could explore a side hustle idea. If you just Google that, there's going to be tons of all sorts of side hustle ideas. And I've tried so many of them actually. And it is through this process of trying that you figure out, okay, which one I like to do, which one I can do, which one fits my lifestyle and the season of life I'm in now, which one is worth me doing, which one isn't worth me doing, because your time is also very valuable, right? That one hour you spend you want to make it worth your while you don't want to just be making two dollars for that one hour of your work right but also think about the longer term potential um earning the earning potential right so even though like for me i i'm i'm talking i'm all about like a side business and i started my own um coaching practice on the side initially you might not actually be making any money for a while but you're building your credibility you're building up your content you're building up your audience you'll build you'll figuring out for yourself what's an area that only you can do, like, you know, that you do very well. So this is all, nothing is ever wasted to me. And then the thing is really start to meet people outside your industry. I think that having started my side business, I have gone beyond the industry where my full-time job is in or my profession in the world of HR, in the world of freight forwarding. I have gone way beyond outside of this industry. I actually meet up with a lot of entrepreneurs. I talk to other women business owners in all sorts of industries and you really expand your perspective. Besides the networking, I I know sometimes networking feels a bit icky to some of us introverts, but for me, I actually really focus on building genuine relationships. I've learned so much from these women that I talk to and I connect with on Zoom calls. You can talk to anyone around the world these days. Isn't that amazing? So LinkedIn is a great way to start building these real and genuine relationships. I started on LinkedIn probably with 106 people, 106 maybe connections, I don't know, no followers at all, but just one by one, right? I just started reading and interacting with other people on other posts, people that we follow, mutual like connections. And then from there, you know, like now I've got like over 3,000 followers and I still grow. I mean, it's not really about the numbers. I know there are people with like hundreds and thousands of, 100,000 and million followers, but it's really, And they all started from zero, by the way, but I'm just trying to say it's really the journey to enjoy the journey. So there are some simple few steps that you can take without even quitting your job. Like I said, you know, use your lunch breaks, right? Maybe if you like to hang out with your colleagues for lunch, sure, go for lunch, you know, but maybe twice a week, just take that lunch break for yourself. I use my lunch breaks to learn, to learn what are the skills I need, like marketing and sales and messaging, all the things that I use, all the skills I use to grow my business on the side to write to connect with people to create content to make notes for a podcast like this to record a podcast so I use my my lunch breaks and then I use my weekends mornings before the kids are up to do all these things and then over time that it builds it really builds over time and now I'm like 160 something episodes already into the podcast right all the while never quitting my job right so it is possible and from that you just never know where it leads you to you know, what you'll learn, the people you'll meet that's going to help you really to diversify your income streams. Okay, so... I hope today's episode helps you, kind of like broadens your perspective a little bit, gives you some ideas. If you found today's episode useful, please remember to follow the show, leave a review because it helps more women to find it, share it with a friend, and you can also subscribe to my newsletter so that you get updated whenever I have a new episode available. You just need to go to sharonsingsiru.com forward slash podcast to sign up. Let me know what you think about this episode, you can always find me on the LinkedIn and I hope to connect with you there too. All right then. Thanks for listening. Take care. Bye.