fire yourself check financial fitness

Fire Yourself to Check Your Financial Fitness

Fired? Who Me?

I am so good at my job it can never happen to me. Can it?

An unexpected job loss is the harsh reality of the corporate world today. The sooner you realise this fact, the easier it will be for you to deal with that day if it arrives.

It is easy to become complacent on this count. Given that minds our wired to think optimistically, we somehow believe that a job loss is something that only happens to other people.

The more successful you are in your current position or organisation, the more likely you are to fall into this complacency trap.

Firing yourself (figuratively not literally) can be immensely helpful in bracing yourself for something like this happening in the future.

While the emotional impact of losing your job may still hit you when it happens, being financially fit will greatly help you in dealing with it.

Fire Yourself This Friday Afternoon

So how exactly do your fire yourself? Here is how to go about it.

Imagine this scenario – Your boss calls you for a meeting this Friday afternoon. When you enter the room, a representative from Human Resources is already there.

You are informed that due to a corporate re-organisation you are being let go. Friday will be your last day with the company. They wish you success in your future endeavors but you are basically on your own now.

As you head back home this Friday, call up your spouse and prepare to discuss this personal finance emergency that has just hit you.

Check Your Emergency Preparedness

An emergency fund is a crucial component of the financial plan for corporate professionals. This emergency fund is meant to support you if an unexpected career development like a job loss takes place.

An unexpected loss of employment constitutes a real life emergency for most corporate professionals. More so if you don’t have any other sources of income to support yourself and your family.

So just like the regular fire drills at your office building, think of this as the fire drill for your personal finances.

Waiting for your boss to fire you without preparing for it in advance is like rushing out the building when an actual fire strikes.

How easy will it to be escape unharmed from smoke filled corridors with people panicking around you? How will you know where to run towards unless you know where the emergency exits are?

Firing yourself may be just the wake-up call you need to test you if you have your emergency fund in place.

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If you already have your emergency fund, that is great – All you need to do is to activate your emergency financial plan if a career disruption does strike.

However, if you can’t see how you will meet your financial obligations for the next 6 months you need to take action – NOW.

You need to come up with a plan to get this fund in place as soon as possible.

All your other financial priorities (or desires) should wait till you have this emergency fund in place.

A Job Loss Can Mess Up Your Thinking Process

Losing your job can be one of the most distressing times in the life of a corporate professional. It drives a significant uptick in the level of mental stress that you experience and can impact your financial wellbeing.

As we have seen before, the best time to make financial decisions is when you are calm and mentally at peace. It allows you to make more rational financial decisions.

An unexpected job loss on the other hand can shatter your mental calm. Not exactly the best time to be making major financial decisions.

If you have not financially prepared for this day, there is a good chance that you may be rushed into making some financial choices that you will later regret.

For example, you might end up dipping into your retirement fund to meet your current expense requirement. It will be hard to think long term (retirement) when the immediate short term priorities (school fees for your kids) stare you in the face.

On the other hand if you have already planned for this scenario during the good times, you are much less likely to make major financial mistakes if you do lose your job.

The Other Benefits of Firing Yourself

There are a couple of other benefits of firing yourself which go beyond figuring out if your emergency fund is in place.

What are these benefits?

You Will Be More Confident at Work

For most corporate professionals their job provides an identity and a sense of financial security.

Like most partnerships an employee-employer partnership too works best when both partners are on an equal footing. In other words your employer needs you as much as you need your employer.

Once you know that you have a solid financial plan in place for any eventuality, it will put you in a more positive frame of mind at work. This positive attitude and increased self-confidence will help to boost your productivity at work.

Firing yourself may in fact make it less likely that you actually get fired.

That is because the quality of your work may go even further up driven by your increased financial confidence at the workplace.

Your Personal Relationships Will Get Stronger

Financial challenges are one of the main reason of disputes between couples. An unplanned redundancy can have considerable negative impact on a family’s finances. This in turn can lead to strained relationships.

However, if you and your spouse have already discussed and prepared for this day, you will be much better placed to handle its emotional and financial consequences.

A financial plan (including an emergency fund) has a much better chance of succeeding if both partners have worked it out jointly.

Conclusion

We live in uncertain times where job security is becoming an alien concept. Most corporate professionals are bound to face some level of uncertainty in their careers at some stage.

It is only a matter of when not if.

Preparing for that day proactively when it does eventually arrive is within our hands. The better prepared you are to deal with that day in the future, the better will be your response.

You can’t always control when a career or a personal financial emergency strikes. What you can do is to make yourself financially better prepared to face any such eventuality.

4 thoughts on “Fire Yourself to Check Your Financial Fitness”

  1. Hari Raghavachari

    An excellent article Dush, well put & practical… I’d add a couple of points:

    1. If a family is dual income (with or without kids)…. a) try living on just 1, b) save 20% of the take-home of the other, c) contribute the highest possible % of your gross salary to the pension plan your employer provides…. Takes a little will and an understanding partner / spouse; the financial benefits, even after just 2-3 years of it, are quite immense….. Needless to say, there’s a part of your emergency fund.

    2. Stay healthy & fit! Corporate / white collar jobs are dangerously sedentary….

    1. Dushyant Choudhary

      Very well put Hari. Those are indeed some very going points you make there. Having a good financial plan in place including an emergency fund should be something every corporate professional should consider.

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