“I heard there might be layoffs” my colleague said to me, her eyes wide. “Cool,” I replied, while turning back to my computer. She looked at me in shock. Apparently, that wasn’t the normal response. How is it connedted to the emergency funds?

The World of Advertising

I’ve worked in ad agencies all of my career and I have been laid off three times in five years. The shortest time I’ve been at a company is two weeks. The ad world is extremely turbulent. We are at the whim of other companies (our clients) and their budgets. It’s a service industry and if big companies are tightening their belts in response to a recession, for example, there is a lot less ad money to go around.  The result is that agencies have almost yearly layoffs. And who gets laid off? The newest, youngest hires, AKA me :).

Know Your Industry and Make a Plan

I knew this going into the industry and planned accordingly (I’m also pretty risk averse so that had something to do with wanting to have a plan). I usually have a three- to six-month stash of cash in case any unexpected expenses come up, including a lay off. I could live as I do now (AKA living large) for six months – eight if I live less large :).

If necessary, after that time elapsed, I could then dip into my investments and live for many years without a steady income from a job.  I’ve written about how I discovered the power of investing here.  Everyone that enters the ad world knows of its reputation and the realities of how agencies are literally tied to the budgets of their clients – yet my opinion about the industry and personal requirements of having months of savings always at my disposal, is somehow unique.

I don’t think my colleagues are strapped for cash either.  To me, people seem unwilling to acknowledge the reality of the industry they chose and plan for unfortunate events. Personally, living that way would stress me out, and give me a lot less control of my life. It’s their prerogative, but here’s how I’ve nav.ed these situations:

Emergency Funds

Gotta have one, gotta love ’em.  

Looking back, before I understood investing, even having a small emergency fund saved me a lot of strife and helped me navigate my life: I quit my first job when I literally couldn’t take it anymore, with $5,000 in my bank account. That $5,000 could have allowed me to keep my standard of living for a little over 3 months in New York City. I had 3 months to find a new job. Instead of life following that timeline, at 9am the following Monday I received a call: a job offer from a huge ad – actually, the one Mad Men was based on. Score one for having a back up plan. 

Postive Thinking and Doing Fun Stuff

When the inevitable happens and I am laid off, I consistently seem to freak out the HR department because I come in smiling and courteous – thinking about the vacation I’m about to have.  Apparently, they’re more used to tears than smiles. Saving money has not only decreased the stress in my life, but also brought an insane amount of freedom and joy.  If an unforeseen expense comes up, I pay it.  If I get laid off I enjoy my “funemployment” and start traveling. I eventually decide if and when I want to start applying to jobs on my own terms.  There is a lot of advice on how to manage this kind of situation and this has been the best way for me. Since I started understanding what my money could do, it seems like my possibilities are endless.

Confidence and Practicality 

The other lesson I learned is that having confidence in yourself and your professional capacity is important if you want to create a successful and stress-reduced life. I was confident in my decision to leave my first company because of the small emergency fund I had saved and the skills and reputation I had earned. Even after only having had one job, I knew I was competent enough to find another– I had great recommendations, knew how to network (that’s how I found my internship and job in the first place) and had gained amazing professional experience with an impressive roster of clients and agencies. That knowledge paired with my emergency fund allowed me to say “forget this” and leave a toxic environment.

The Nav.it 101

Save an emergency fund. Be confident in what you contribute to the work place. Use these powers to live without fear and take the jobs you want.