Why an Emergency Fund Should Be Part of Your Career Plan

Why an Emergency Fund Should Be Part of Your Career Plan Why an Emergency Fund Should Be Part of Your Career Plan As you progressin your career, finding a new job can become harder and harder. One of the big reasons for this has to do with salary. When you first start working, you are generally open to just about any job and will happily take a tiny paycheck.However, as you rise through the ranks of your industry, your salary requirements will evolve.One challenging situation that many job seekers face is when they want to leave a job but are financially unable to. In general,one of two scenarios is preventing the job seeker from leaving They are either living right up to their means and spending every dollar they make each month, or they do bedrngnis have a safety net in the form of an emergency fund.A job seeker with no emergency fund who needs every dollar to pay their basic bills feels trapped. Its even worse if the job seeker is being treated poorly at work They cant financial ly afford to leave, butthey cant emotionally afford to stay.Dont Get Trapped Start an Emergency FundTo protect yourself from gettingtrapped in a scenario like the one described above, do two things.First,scale back your fixed expenses if possible. Then, take the extra money youre saving each month and put it into a savings account. That account will serve as your emergency fund. Ideally, your emergency fund should carry you through six months of living expenses. I recommend keeping your emergency fund in a savings account because itwill be protected from market fluctuations that way.Creating an emergency fund takes time and dedication. Its not something you can do overnight, and its not easy. But if you feel stuck in a bad work situation, think about how much differently you might feel if you knew you had six months of living expenses in an account just in case.The benefits of an emergency fund cant be overstressed. Having a backup plan gives you room to breathe and the power to wa lk away from jobs (if necessary) without having to worry about how youll pay rent.Along these same lines, when you land a new job that pays more, dont immediately jump to increase your fixed monthly expenses. A new house or car may be tempting, but give yourself a chance to decide that you really like your new job first and that the company really likes you. The last thing you want is to lose that job and be stuck with living expenses that reflect your lost income.The bottom line is this. Things can (and will) go wrong at work. You may get a bad boss. Your company may go through layoffs. But if you manage your finances carefully, youll give yourself an out. And, in the end, youll create both breathing room andprofessional freedom.A version of this article originally appeared in theMemphis Daily News.Angela Copeland is a career coach and CEO at her firm,Copeland Coaching.