The Savings Account that Everyone Needs

via aviaforum.ru

Back in 2010, JetBlue flight attendant Steven Slater made headlines with his dramatic exit from a twenty year career. This incident came just a few months after I graduated from college and a month after I started my first full time job. It got me thinking about how a person could be driven to do something so dramatic and what the consequences for those actions are. I was raised with the belief that financial independence is something to aspire to, but also that it is fully attainable for everyone with the proper sacrifices.


Growing up, we talked about money a lot; how to save, different financial strategies, the importance of an emergency fund, how compound interest works. My first major financial decision, one that still affects my choices today, was where to go to school. I had a few options ranging from free to nearly $50k/year. I made a calculated decision to go with the $50k/year option. People still like to tell me I made a bad choice. It wasn't easy, but I do not regret this decision. I was able to study in an environment that challenged me on every level; it was this challenge that allowed me to thrive. Additionally, working through school made me better appreciate what I had. I promised myself that if I didn't feel it was worth it I would leave school and just work until I knew what I wanted; I graduated in four years. I was also given an additional push to take a job when I graduated because I knew that the best way to get rid of those loans was to pay them early.

After graduating, living my relatively frugal lifestyle, I came up with a financial plan. My primary goal was to pay down my loans as quickly as possible. I know this is not the right choice for everyone, but I wanted to be free of debt more than I wanted to put a down payment on a house or buy a car. I knew I needed an emergency fund, but, after hearing about Steven Slater, I decided that I needed an additional liquid fund at my disposal. This fund grew to be almost equal in size to my emergency fund. However, the two had distinct purposes and were equally untouchable for daily use: the emergency fund would be there if I lost my job or something catastrophic happened while the second fund was there to cover me if I lost my cool and did something impulsive, much like Slater.

Last summer I was planning a two week vacation to Hong Kong, working extra hours to offset any time that I took off so that I could spend as much of my precious vacation time as possible in Asia. After a series of emotionally charged decisions, I decided that I was bored and unchallenged at work and that I didn't enjoy getting out of bed and going to work everyday. My solution: I bought a one way ticket to Hong Kong. I didn't know what I was going to do or how long I'd be gone for but I did know that my secondary emergency fund was sufficient to cover me through a comfortable, fun, and exciting winter in Asia. Given that I planned this trip about two months before I left, having this fund available to me was the only reason I was able to take an open ended leave of absence without much worry.

I recognize that not everyone is in a position in which they are able to sock away enough extra cash to float them for a few months of travel. However, skipping a meal out every week or walking to the grocery store instead of driving will free up a few extra dollars that may turn out to be the peace of mind you need when everything around you is crazy.