Part 3: Leveraging an Emergency Fund to Switch Careers
As an unmarried dog mom, I would need to independently fund my own unemployment, and make sure my pup stayed in the kibble. There were a couple of months between jobs where I didn’t have any income because I immersed myself in job hunting as a full time gig.
I had a $10,000 emergency fund that had taken me about a year to save up (which I was able to do because I had paid off all my debt and had very low expenses). I then spent the first 16 months of the pandemic (March 2020- June 2021) piling up cash to fund my career transition.
As soon as the pandemic started, I used that as an opportunity to slash my spending. It wasn’t that hard, considering I had to stay home anyways. No more travel, nights out with friends, clothes shopping, or live music tickets meant money in the bank. Going scorched earth was an option for me because I don’t have other obligations like caregiving, chronic health issues, dependent children, etc.
In those 16 months, I saved $16,000. A thousand dollars a month seems steep, but remember, I had almost no bills. When I moved into my partner’s literal cabin in the woods halfway through the pandemic, my rent also dropped to $450/month.
So when summer of 2021 rolled around, I had $26,000 saved total. My intention was not to have to touch my emergency fund, because the job transition was something I saw coming, and therefore not an emergency.
I used the YNAB app to map out my expenses and carefully track where every dollar was going:
A big chunk of that money went towards moving- in 2021 I moved from Atlanta to Bloomington to Indianapolis and that ain’t cheap.
Some of the money went towards the job search- books on instructional design, LinkedIn Learning and Udemy courses, setting up a digital portfolio and all of those subscription rights, etc.
Life happens! I continued to pay for rent, utilities, groceries, etc. but also had to have $1,300 worth of work done on my car, participate in a friend’s wedding, cover medical and vet bills, and the list goes on.
By the time I found full time employment, started work, and got my first paycheck, I never had to touch my original $10,000 emergency fund. That money is still sitting there, and I don’t plan on ever dipping into it unless I need the money in a hurry for something unexpected.
I’ve heard emergency funds referred to as ‘FU Funds’; as in, if you need to say FU to a situation, relationship, or job, you can just walk away. It did provide peace of mind during this whole job transition that things would be ok.
Check out this lesson on personal finance principles for beginners that I developed for more resources.
