The Best Career Decision You’ll Ever Make

My wife wasn’t yet 25 when she finally convinced me to start caring about my finances. We had just recently moved to Seattle, Washington after meeting in college. In fact, we had only recently graduated and packed up the life we knew to move all the way across the country when I was offered a dream job in the games industry. It was a lot for her to leave her family, friends, and everything she knew to follow me, just a college boyfriend, to start a brand new life together.

After moving we came to the time of the year in which we needed to do our taxes. The job I had gotten after college was the most money I had ever earned with a starting salary of $50,000. As a contractor I had a lot of expenses to pay that my full-time colleagues didn’t (healthcare, for example), but it was by far the most money I had been given in a twelve month period of time. Meanwhile she had earned about half that amount as she had switched careers entirely and bounced between a few jobs while we settled in. And yet as we sat to go over our various tax forms I realized something: she had the exact same amount of money in savings as I did. How could that be?

“Bill,” she patiently explained to me, “you spend more money than I do.”

It seems crazily obvious in retrospect but that was the moment things clicked for me. I was never the type of person to spend extravagantly on fancy cars or big screen TVs. On the contrary, I mostly lived simply but somehow I was spending twice as much money in a year as my incredibly talented and much smarter girlfriend. A good portion of the spending, I realized, came from eating out every single day with my work colleagues. I loved lunches with the gang but I was literally eating thousands of dollars in income while my partner was fully funding her Roth IRA, a series of letters that sounded like nonsense to me.

Things changed after that. Despite encouraging me for years to be more aware of my money, it was that simple tax filing moment that led my now wife to get me onto the path of personal financial responsibility. It was entirely by accident, but the fire was lit! After figuring out where my money was going and getting a budget set up with her help I took a very important step. I made the best career decision I’ve ever made.

Iowa

Before I became a fancypants office worker in the tech hub of Seattle I was a farmer’s son in Iowa. Work there was pretty simple: you woke up before the sun did, you went to the field, and you worked until the sun was almost done on whatever seasonal work was called for. In the spring you’d pick up rocks to clear the field, then you’d pull genetically inferior plants out of corn fields (called “roguing”), and after that you’d pull the tassels off of certain breeds of corn to help create specific genetic lines of corn seed. When work was done you went home. When the season was done, you were out of a job. No severance, no benefits, just show up, work, and go home.

When I started getting serious about personal finance I realized that while my job was nice and I was making what I thought was good money I wouldn’t have it forever. In fact, as a contractor I knew I wouldn’t have it forever! I had an end date right there on my contract. And just like working in the corn fields back in Iowa there was no guarantee of anything after that contract was over. I needed to do something to help secure my financial future, and I needed to do it quickly!

A better way…

My solution to knowing I was going to lose my job was simple: I would make sure I got a severance package when my job ended. As a contractor my employer was under no obligation to give me anything when my contract ended, so just how exactly was I going to come up with severance pay? Simple, I decided. I’d pay it to myself.

With the help of my partner we did some math based on our monthly budget and came up with how much money we needed to pay our expenses for three and six months. I recorded the two numbers and made a new savings goal: save up three months’ worth of “severance,” then if there was time save up to six months’ of “severance.” I knew I wasn’t going to have my job forever and I knew I wasn’t going to get any unemployment or severance when I left the job. By saving up for that eventuality I made sure we were prepared for my loss of income with a long runway before I had to have another job or we’d start missing bill payments. I didn’t know it then, but I had essentially saved up my first emergency fund.

The best career move I ever made

“Bill, do you have a second to chat?” The mid-level manager standing in front of me at the office had caught me on my way into the building before I’d had time to drop my lunch off in the work fridge. “Uh, sure,” I replied while we grabbed a nearby meeting room.

“Look Bill, we really need a guy with your skills on one of our teams. Are you happy with what you’re doing right now for the company?” I blinked incredulously at my colleague.

“Oh. I’m pretty happy I guess.”

“Sure, but we’re really struggling to find a candidate for our new position and it would be a big step up for you professionally. Plus it’d be a big bump in pay. What do you think about applying?” My head was spinning at the possibilities. Up until this moment I hadn’t even considered leaving the team I was on. I was pretty happy with what I was doing, but a big bump in pay? Moving up in the company? And being directly recruited? All of those things felt pretty good.

“Um…could I get back to you in a few days?”

“Yeah, yeah, sure thing. Think about it and get back to me.”

I barely made it through the entire workday before rushing home to talk over what had happened with my wife. Ever the supportive spouse she hardly seemed surprised at my good fortune. “Well,” she asked, “do you want to apply?”

“I don’t know. What if I don’t get the job? And what if my current boss gets mad at me for trying to switch teams? I could lose my job in retaliation!” I didn’t really think my boss would be that vindictive, but my career was already on a solid trajectory; disrupting it was a real risk.

“So what?” My wife replied indignantly, her nose turned up at the thought something like that would give me pause. “We have the emergency fund. If they fire you because you tried to move up in the company good riddance.” This was not the response I had expected.

“Come on, do you really want to work for a company that doesn’t have your back when it comes to your career?” She continued. “And besides, even if you did lose your job you could spend a half a year not working before we’d need more income!”

As usual, she had her head on straighter than I when it came to considering all the things. It had been a few years since my first contractor position in Seattle had ended. I’d managed to stay gainfully employed at various contracts around the area and we had never had to dip into our emergency fund, but it had always been there! Now it could serve as the insurance policy that meant I could afford to take a risk on improving my career and know nothing bad would happen. If I got the job I’d move up the ladder, but if I didn’t and my boss got mad at me for trying my family would be financially secure thanks to our emergency fund.

The next day I got in touch with the manager and told him I was interested. Two months later I completed the interview process and landed the gig.

The power of your emergency fund

When I first set about putting aside money to serve as a self-funded “severance pay” fund I was taking the steps to build a fully stocked emergency fund, even though I didn’t call it that. At the time I envisioned it as a pool of money that simply sat idly by, always ready to be called into action should the need arise. I had no idea that an emergency fund could be such a powerful tool for advancing your career.

Giving me the freedom to pursue a new direction within a company wasn’t the only time my emergency fund helped me out either. Since putting it together I’ve never had to sit in a meeting biting my tongue for fear I’d say something that would rub someone the wrong way and lead to me getting fired (it turns out being respectful while standing up for your convictions can actually be good for your career). I don’t have to worry about taking a risk that might not pay off professionally. And when my wife decided to leave her job and pursue higher education? We could afford for her to do so content in the knowledge that moving to a one-income family was safe because even if we lost that income we had quite a while before we’d need another. In fact, having an emergency fund is arguably more important for women.

An emergency fund is exactly that: a collection of funds that you tap only in extreme emergencies. It’s not your “oh my god those cute boots are on sale!” fund. It’s not your, “But I really want new rims for my car!” fund. It’s the money that ensures you don’t have to suffer fools at work, that you don’t have to pay someone interest for helping you get by when you lose a job, or that ensures a surprise health emergency won’t force you into bankruptcy.

Your emergency fund is so important it’s the second step in The 10 Step Plan to Your Financial Future. If you haven’t taken the time to set aside a savings account with enough money to last you at least three months (if you’re a double income family) or six months (if you’re a single income family) stop waiting and start setting aside the funds. If you’re not sure how much money your family needs to survive for 3-6 months you need to take advantage of the most powerful financial tool in the world.

Don’t let another year pass you by in which you’re too afraid to make a big shift at work because you might lose your job. Don’t let the fear of a surprise big expense ruining you financially continue to keep you up at night. Don’t let another minute go by without taking the opportunity to set up your emergency fund!

I did, and it’s the best career decision I’ve ever made.