Monday, July 11, 2016

The Impact of an Emergency Fund on Your Career

A month or so ago I woke up at 6:30am to make my son a bottle when my phone started blowing up with text messages. One said "no way!" another just said "Microsoft". I read between the lines and quickly opened my work email to read about how Microsoft had just bought LinkedIn. As I sped read the email, my first thought was about whether or not I would lose my job.

I paused after this thought to gauge my feelings and surprisingly enough I felt very calm. A big part of why I felt that was because after I finished my MBA, my wife and I made it a priority to have an emergency fund of 6 months of our expenses.

Now, I have not had this emergency fund for that long, but already it has impacted my career in a positive way by giving me peace of mind as my company goes through big changes. I had enough going through my mind that day without having to worry about feeding my family if the worst case scenario would have happened, which it did not, thankfully.

Here are a few more ways having an emergency fund could impact your career.

1. It can make you more willing to take risks. I believe you'll take more intelligent risks within your company if you're not constantly worried about getting fired and not being able to pay the bills. It can also give you the confidence to take on a new role or maybe quit to try a different company that's more risky.

2. It can prevent you from getting into an ethical mess. Fear of losing your job for financial reasons is stronger motivation than you might think to turn a blind eye to an illegal or unethical situation at work. If you feel financially confident to walk away, you'll be less likely to compromise your values if that unfortunate situation arises.

3. It can relieve stress, which makes you more productive. For the majority of Americans money is a significant source or stress. If you can take that out of the equation you can be a better, happier and more productive employee.

Just a few thoughts, if you have other ideas on how an emergency fund could impact your career, please share in the comments.