I Need Enough Money to Say ‘No’ to Jobs. How Do I Get That?

 When I graduated from college in 2011 into a slow job market, I was happy to take any job. But two years later, I found myself stuck in a role without a career trajectory or opportunities for growth, and I realized I had to walk away. I got some other gigs lined up, and asked for a small raise, and when they said no, I also said no, getting out of that dead-end job.

Ever since then, the power of saying no to jobs—of having options—has stayed with me.
It stayed with me as I survived layoffs and slogged through restructurings, ending up in positions that neither suited my skill sets nor taught me new ones. It stayed with me as I saw friends being laid off at seemingly stable companies. And it stayed with me as friends made big changes in their careers and their lives—whether it was a breakup-spawned move to another city or a later-in-life career change.
That’s when I realized an emergency fund wasn’t enough. In this economy, I needed what others might use an expletive for but I’ll just call my “options fund.” Whereas an emergency fund is something I dip into when I don’t have a choice, this is the money I’m saving for when I want to make a choice.
“It’s basically like, ‘I want to make a change,’ ” says AJ Ayers, a financial adviser and co-founder of Brooklyn Fi. “If I don’t like my job, I don’t like my living situation, I don’t like my relationship, I have enough financial security to get out of this uncomfortable state I’m in.”

Layoffs and debt

Having an options fund has felt especially crucial for me and my peers. In a world where layoffs are common, employment stability rarely lasts a decade, let alone a lifetime. If we survive a layoff, we might end up in restructured roles that no longer fulfill our career goals; the ability to walk away in search of another can be powerful.
If we do get laid off, this cushion helps in the job search; we don’t want to take just any job that comes along. We want to be able to pause and find the job we’re passionate about, not just one to pay the bills. One such friend got laid off recently; he’s using his funds to give himself a breather so he can take his time finding the next role to grow his skills and career. 
And it isn’t always about a job. This need for extra stability bleeds through into our home life, perhaps explaining why my peers are getting married—and having children—later. One friend told me she waited to become financially secure before getting hitched, saying, “I didn’t want to get married unless I knew I could afford a divorce.” Some might see that as a bad omen; I see it as an understanding that some things are out of individual control. There’s also a psychological benefit of having this fund. Having an extra cushion might not make a divorce or a layoff OK, but it certainly makes tackling a bad situation more manageable, removing at least one worry. 
Still, we know it won’t be easy to raise that kind of money. As a generation, we’ve entered the workforce with more student debt than those who came before us, making it harder to suddenly stop working, even if only for a short time. Add on the standard financial advice of saving for emergency funds and retirement, and this third fund seems rather daunting.

How much is enough?

The biggest question as I started building my own options fund was figuring out how much I really needed. While some millennials might be part of the FIRE movement (financial independence, retiring early), my friends and I aren’t necessarily thinking about early retirement. We just need a little wiggle room. To that end, a very basic calculation Ayers recommends is simply multiplying a current monthly pay stub by the number of months you may want to take for yourself. That way, you can at least maintain your current quality of life.
That number can also vary based on age, lifestyle choices, and location. “[It] means something different at 22 than it does at 40 and at 65,” Ayers says.
In my early 20s, when I had a higher tolerance for life’s inconveniences, my cost of living was lower. In my 30s, that number has gone up; my body can no longer handle cheap pizza dinners, and I tend to take taxis rather than subways after midnight. The fact that I don’t have children helps, but the fact that I continue to stay in New York City doesn’t.
This is where trade-offs come into play. “What’s the secret of getting to financial independence? There’s really two options: One is to make more money and the other is to spend less money,” Ayers says. “Do you really enjoy going out to eat every single night? Do you need to move to a cheaper city to have cheaper rent, to continue to live your life?”
I’m not quite ready to leave New York City, so I’ve taken the first option: Make more money. When I can freelance, I’ve said yes to every job, no matter how small. Most of that money—along with any tax refunds or bonuses—gets socked away into a separate investing account, ignored like it doesn’t exist. When and if freelancing isn’t available, Ayers says starting with small, incremental goals might feel more achievable, like putting away 10% of every paycheck into a high-yield savings account.

Cutting my budget

Spending less money has been harder, especially with the inflation of the past couple of years. Instead of limiting my grocery bill, however, I’ve focused on avoiding lifestyle inflation. I try my best to scroll quickly past consumer-based TikToks to curb any “life-changing” home buys, and still restrict myself to buying secondhand clothes via resale websites.
But the biggest savings adjuster might be housing. While millennials have been behind when it comes to homeownership, those who can save money on rent or live with their parents are subjects of envy within my friend circle. Other trade-offs can also make a big difference over time; one of my friends stayed for 10 years in a below-market-rent apartment, instead of splurging on a higher-rent option with more amenities. “Would it have been nice to have a dishwasher or consistent hot water or not have to carry groceries up four flights of stairs? Of course,” she says. “But being able to save $100,000 over that same period was so much nicer.”
The dream is of course to never have to make a big decision that will upend my life. But as I’ve had to book last-minute flights for a family funeral, ended a long-term relationship, and chatted with multiple friends who have been laid off and are struggling to find full-time jobs, I’ve started to give priority to this slush fund more.  
There are a lot of things I can’t control, but having financial options is something I can. And even if I never choose to use this options fund, if I’m lucky, it will grow into the type of money I can do whatever I want with.

Post a Comment

Previous Post Next Post