Let me share with you what my father taught me about careers and finances: You can lose your paycheck at any time, unless you’re fortunate enough to work as a tenured teacher or in a similarly secure job. So you’d better be prepared.
This message was drilled into my head over many dinners starting when I was quite young. But it didn’t really hit home until the stock market crashed in 1987. I remember hearing the news while sitting in my high school acting class and thinking that this was the event that would cause my father’s predictions of a job loss to come true.
My father didn’t lose his job that day. But the ax did fall a little later when I was a freshman at college. And that’s when I started to realize how wise my father was. Rather than buying me everything I asked for, he had been saving for college since I was a little girl. So when the crash came, my education was already paid for.
This past January, it was my turn when I was laid off from a job I’d held for 11 years. And as I sat in my editor’s office and heard the horrific news, I thought of the three lessons I learned from my father and took comfort knowing that following them had left me financially prepared:
- Lesson One: Save a little bit of money from every paycheck in a reserve fund for an emergency or job layoff. I started doing this back in college with the cash I earned from internships.
- Lesson Two: Never to carry a balance on a credit card. If I couldn’t afford an article of clothing or airline ticket with the money in my bank account, I shouldn’t buy it. Otherwise, if I lost my paycheck, those interest payments would kill me.
- Lesson Three: Don’t put off saving for retirement. With my first post-college paycheck, my father encouraged me to start contributing 10 percent of my income into a 401(k) and explained the benefits of compound interest. Sure my golden years felt like they were a lifetime away, but there could come a time later in my career when I wouldn’t have the money to make a contribution.
Thanks, Dad. You were right.
Image via Flickr user viZZZual.com, CC 2.0
