- Wise Words -
Preparing for "Career Winter"
A lesson from the squirrels
by Fergus Mellon
Ok, so it may seem a little strange writing about learning from squirrels on Early Stage Professional, but as I am in a winter season in my career, I thought it appropriate. It is appropriate as squirrels plan ahead and save their acorns for winters, so saving money for a "career winter" seemed like a nice way of looking at it.
When I say “winter season” what I mean is that I am currently on the hunt for my next role having worked for a fabulous, venture-backed business that was truly changing the industry that it operates in. While it is a great business, as often happens it had to re-focus itself and some of the team, including me, had to go.
So now I am without a regular income and apart from my job search and my daily exercise have very little to do during my 9-to-5. One of the things that I don’t have to do though is worry about money and for this, I am very grateful. Barring some very unforeseen circumstance I can exist on my current level of spending for at least the next 3 years.
I can do this as I have socked away pay rises, bonuses and exercised stock options. I have buried those proverbial acorns for use in the lean times. I have taken and applied a lesson from the squirrels.
Ok, from now on, no more mention of acorns or squirrels – promise!
Making it actionable
So, you’ve got this far which I assume that means that:
Here is what worked for me and hope will help you get a buffer in place for any lean times:
Going Mental. First off, what has allowed me to save, is that I changed my relationship with “things”. Sure, I want a Porsche, a Rolex, large apartment in NYC and the rest of it, but instead of longing for them and stretching myself financially for them, I know what they are. They are luxury goods for the wealthy.
Why get into debt to buy “things” that generally speaking depreciate, that lose money? My friends and those around me may notice my brand-less watch and think I am not a success, but I have long asked myself “who really cares?”. How other people view my financial success does not matter me.
The final and most important mental shift is to think of the longer-term aspects of spending and saving. None of us (unless we are very lucky and land a significant financial windfall) can immediately save money or pay off our debt. It is a build.
Paying an additional $50 or $100 dollars per month into a savings account or making additional payments against debt sounds small. Because it is small, we can then think it is meaningless and that’s the trap. Instead make that $100 per month into $1,200 per year. Sound bigger and better, right?
Tortoise Living. Ok, so I have made the mental shift and established that “things” don’t really matter and that small saving actions are important, the other piece is to establish that tortoise lifestyle. By that I mean one that is affordable but also enjoyable. Being with friends is important to me. Being able to travel for that well-earned vacation is important. Living in a safe place is also something that I want.
So how to get all of this and meet your budget?
It becomes an exercise in right-sizing and living within constraints as we can’t have it all, unfortunately. It meant that earlier on in my career I had roommates instead of my own place. Later on, it meant having a studio instead of a one bedroom. It also meant not going to those crazy-priced, nice and fancy restaurants! Sure, some friends were dining out in style and funding it by borrowing at 20% or more on their credit cards. For me it was the “being with friends” that mattered, so I would pick bars with happy hours (amazing how the beer still tastes the same!).
Socking It Away. The final piece of this is once I’ve established a way for me to manage my saving and spending, when I do get those nice extras (bonus or that rare event, the opportunity to exercise stock options) I know where the extra will go. That’s right, that $5,000 bonus or $10,000 in exercised stock options goes right into that savings account and joins the $1,200 per year that I save from my monthly payments. While it all feels tortoise-like at first it can mean in a normal year that you have saved at least $6,200 and over 10 years would be at least $62,000 (ignoring investment gains). Add to that pay rises that we hope to make from actually advancing in our careers (the really important bit) and your fund for surviving a career winter can grow even more quickly.
The other thing is that once you see the balance grow (and/or your loans diminish) after the first year or so it will build momentum for you. You may get satisfaction about gaining control of your financial life and that may in turn be reinforcing behavior and you could gain satisfaction from making smart investment decisions.
How the Tortoise and the Sock Align. The final piece I want to say on this whole topic is that right-sizing your life and having a savings balance end up supporting each other. When times are good, when you are having that fabulous career “summer”, you are saving and not increasing the expense of your lifestyle. This then helps when you hit the winter. In winter, the extra savings will support your life. As your life won’t have been a crazy one to support, you will not notice the change in lifestyle so much. You will still be able to go out with friends at your local bar and enjoy the time without fretting about how to support it.
I hope your career “spring” and “summers” are long and that in the event you enter a career winter, these tips will help you through it and who knows the balance in your account may mean you can have as merry a winter season as possible… Happy Holidays!!
Dealing with Job Loss: "Lost Your Job? Now Breathe", "How I Bounced Back from Being Laid Off".
Finances & Saving for Retirement: "Money Management Ideas", "Start Saving for Retirement Today",
Book on Employment Trends: “How American Work, American Business, and the American Dream Became Temporary” and accompanying Decode/Recode podcast.
Book on Managing Money: "I Will Teach You To Be Rich".