People stare at me when I tell them that career management is also personal finance. They either get a “deer in headlights” or a glazed look over their eyes when I bring the subject up. Not that I provide financial advice, mind you. No, just the importance of a few principles about why personal finance is also good career management. Here are the four reasons career management is personal finance:
- Savings prevents desperation. If you are laid off, having a year’s take-home pay in the bank is a big equalizer to the desperate feelings of needing a job when you don’t have money in the bank. Savings allow you to better choose a position that meets your needs and not taking any job because you need the money right now.
- Lower debt is lower payments. Having little or no debt makes your lifestyle much more flexible. While employed, you can enjoy more by having more disposable income. And, in the case of being laid off, having little debt means your payments are low, preserving your cash flow from your savings.
- Your credit scores affect your ability to be hired. Companies, with your permission (that famous background check before hiring), can pull your credit. And, especially in financial companies, can use that for not hiring you. (Too bad financial executives can’t manage their own company money…but that’s a different post…).
- More money for “retirement.” If you can no longer work, what you save is all you will have for living expenses. Not having enough savings significantly reduces your choices about your life; including making the decision to choose to no longer work. You can imagine, after the wild ride on Wall Street lately, that everyone is seriously reconsidering their time frames for retirement. And watching in amazement as their 401(k) gets smaller and smaller.
How well you manage and invest your money impacts your career choices. Whether it is taking a shot at a riskier job for you, choosing to work, or getting laid off, your financial decisions will help or hurt your career. That’s why a Cubicle Warrior needs discipline over personal finances.
Are there other ways career management is also about personal finances?