I was fired from a job once.
Technically, I was “let go.”
On paper, that’s better, because it wasn’t my fault. In practice, it’s largely the same.
“We’re not going to pay you to work here anymore. Good luck!”
It happens to the best of us, the worst of us, and everyone in between. It’s largely out of your control. But you know what you can control?
How prepared you are when it happens.
That’s where emergency funds come in. They’re one piece of the protect-yourself diversification strategy, right there with building multiple streams of income, and you really need one.
Here’s four reasons why – all related to how just one simple emergency fund will turn getting let go from “oh my god awful” to “maybe this isn’t the end of the world.”
#1. You Can Make The Really Inappropriate Joke
There’s one aspect of getting let go that I’ll always remember.
It was a group layoff, so there were four of us in the room at the time. Because I lived like a pauper student during my time at that job, I had a decently-sized emergency fund saved up. Even if I wasn’t managing it properly, it was there.
So after confirming with the HR rep that this decision was financial, and not because we were all awful employees, I turned to the rest of my just-fired friends and said,
“So… Who wants to go to the bar?”
It was 10AM.
That’s the thing about emergency funds. Even though I knew I wasn’t going to be getting paid as usual, I had enough money in the bank that my needs would be covered for at least a few months. That takes almost all of the panic out of getting fired, because you know you’ve given yourself the luxury of time.
And the luxury to make the bad joke.
You know what people need more of when they’re getting fired? Bad jokes from people who aren’t firing them. Have an emergency fund so you too can joke about day drinking after getting fired.
#2. You Can Day Drink After Getting Fired
Oh, and then we all went to the bar and had a few pints.
Does it count as a joke if you meant it and then followed through, because you weren’t worried about how you were going to pay your rent?
I’m going to count it as a joke.
#3. You Can See The Experience as An Opportunity
If you’ve been reading my weekly updates, you saw this week that Vic from Dad is Cheap wrote a post about a recent layoff at his job. A lot of people would have reacted negatively, and that’s understandable – normal even!
But Vic looked at it differently. He saw the extra time as a gift, an opportunity to spend more time with his daughter at her young age.
Is he looking for other opportunities? Sure.
Is he panicked about how he’s going to pay for things? Not even kind of.
That’s the power of planning your finances, and having an emergency fund waiting in the wings.
#4. You Can Evaluate Your Options
Listen, if you don’t have an emergency fund, the first job offer that comes your way is going to look pretty great.
“So what you’re saying is, instead of having no money, I can have money? TELL ME MORE ABOUT THAT.”
But what if this layoff was a blessing in disguise? What if it was an opportunity to regroup, look at what you’ve accomplished, and target the next step in your career?
Full disclosure, I did not do this when I was laid off.
I was still new in my career, and I didn’t fully understand How To Professional yet. However, I had a friend who used the time to take a step back, and it was the best thing he could have done for his career.
He went from a string of marketing agency jobs, to a killer marketing manager job at a growing company, and parlayed that into even bigger jobs afterwards. All because he didn’t take the very first job he was offered, and gave himself the flexibility to wait for the right opportunity.
You know what gives you that time and flexibility?
You should get one.
Since I seem to be on a bit of an emergency fund theme here this week, what with my emergency-fund-funded lesson in How To Adult on Tuesday, I’ll be writing about calculating how much I actually need in my emergency fund next Tuesday. If you have any interesting tips on how to go about it – I’d love to hear them!