Why Saving Money Will Help Your Career

Money in the bank brings the confidence necessary to keep your job.

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More proof that we live lives that are too expensive: 21 percent of people with salaries of $100,000 or more report living paycheck to paycheck. The figure comes from a CareerBuilder survey published today. The survey shows 47 percent of all workers surveyed said they always or usually live paycheck to paycheck. One third of workers do not put any money into a 401(k), an IRA, or a retirement plan, and a quarter of workers don't save anything.

This is a problem for several reasons, but since I cover careers, I'm going to focus on the job problem.

When you have no savings, you have no cushion if you lose your job and you have less confidence in the job you have. Earlier this week I interviewed Stephen Viscusi, author of the just released Bulletproof Your Job. In the book, Viscusi writes that one of the most important things employees can do to bulletproof their jobs is "have money in the bank"—enough to cover living expenses, he suggests. Older employees who have longer job searches need to have even more in the bank. What does this have to do with keeping your job? The confidence that comes with knowing you have savings to cover your needs will allow you to take the risks and make the bold moves that are necessary to keep your job. Desperation is not a great career accessory.

Also, note that the self-discipline that comes from living within your means and building savings—whether it involves cutting out all restaurant meals, refusing to buy new clothes for a year, buying furniture at secondhand stores, shutting down your iTunes account, borrowing books from the library, holding a garage sale, buying generic brands as often as possible, doing freelance work on the side, switching to a better bank, renegotiating your rent or changing your apartment—will serve you well in terms of organizing your life, assessing your priorities, and preparing yourself for even harsher times.


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