As some of you may be aware, I don’t have the highest opinion of the dogma that says it’s always right to save money, especially for retirement, especially when you’re in your 20s and not making much money.
But there is one very good reason for you to at least keep something stashed away, to put aside what I call “take this job and shove it money,” mostly because it would be inappropriate to use profanity on this site.
On Wall Street they talk about F*#@ You money, meaning the amount of money you need before you can tell you boss, well, you can guess, and quit your job for good. I don’t know if that kind of money is still obtainable on the street, given how bonuses are being slashed, layoffs are abundant, and the masters of the universe are struggling mightily to keep their jobs, but “take this job and shove it money” is a similar, if less ambitious concept.
At any given moment, you should have enough money in your bank account to be able to quit your job and survive—meaning pay all your bills, feed yourself, buy toothpaste—to live your life normally for two months without having to put anything on your credit card. I’m not a big believer in long term thinking, but I do think it’s important to be empowered. And having just that much money socked away gives you the power to quit a job you hate and spend some time rigorously looking for a new one.
The problem with living hand to mouth, paycheck to paycheck, as many of my friends do, and I’m sure many, many more people our age go, is not that you’re being irresponsible. It’s that you’re shackled to your source of income, your job. If you don’t have “take this job and shove it money,” you have no choice but to keep working somewhere you hate.
Now, what if you love your job? Doesn’t matter. If you don’t have “take this job and shove it money” you’re giving up an essential freedom. Having that money, just enough to get you through two months, should change your whole outlook. Don’t you think you’d be willing to put up with a lot less, let’s say guff from your superiors if you knew you could just walk out any minute you chose?
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The point isn’t to escape a bad employment situation, it’s to set yourself up so you don’t feel chained to any particular situation. Money is freedom (OK, it’s a store of value, same difference), that’s one of the main reasons I don’t believe in hoarding it while you don’t have much of a salary—money stuck in a retirement account won’t do you much good if you need it tomorrow, but it’s also why you should try to have some put aside, so you can move from job to job without living in fear of poverty, or worse, moving back in with your parents.
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