Why You Want to Be Financially Responsible

Motivation Josh on 07 Feb 2009 07:56 am

Why You Want to Be Financially Responsible

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As you may have seen me mention a few times recently, the company I work for is struggling badly at the moment (what company isn’t?). Last week, as a result of these struggles, I witnessed an event that served as a shocking reminder of why I work so hard to be responsible with my money and why I made this site to perhaps help others do the same.

On Tuesday, our company called a meeting to discuss what is ultimately their last resort effort to save our jobs. In order to cut expenses without cutting jobs, they were forcing everyone in the company to take a two week furlough. A two week furlough is essentially a two week unpaid vacation. And instead of taking the furlough one day at a time for ten days, the government requires that it be taken a week at a time. What this means is that two times this year we would all have paychecks with a weeks less pay in them.

As I was listening to the speaker continue to tell us how sorry he was, blah, blah, blah, I was thinking about what this would mean to my finances. And basically, it wouldn’t mean that much. Yes, some of my goals would be pushed back a month or two. But I wasn’t going to starve as a result of a weeks less pay. My electric or car or cable bills weren’t going to be left unpaid because of a weeks less pay. I would simply cut down on the amount of debt I paid off in the months I took the week long furlough.

So aside from the fact that I had just been told my 2009 salary was being lowered (on top of receiving the news we wouldn’t be getting our annual raises this year, either), I was feeling pretty lucky that the company had figured out a way to keep me employed (at least for now). I figured other people, mostly ones who made much more money than me, were feeling the same way. Then the question and answer session started, and boy was I wrong.

The first question came from a woman in the back, I’d guess in her mid 40’s. She grabbed the microphone and asked, amidst holding back tears, “so basically you are telling me for two different months this year my family will have to choose between making my house payment and making my car payment”? REALLY? A week without pay will cause you to choose between your home and your car? What about an emergency fund? Or simply cutting down on expenses the next few months?

This woman had to the minority, I thought. After all, this was a room consisting mostly of accountants and engineers, not minimum wage fast food workers. Surely at least the accountants, who on top of earning a high salary are supposed to be good with money (it is kind of part of the job), would be better prepared for this small hit? Nope. Soon some of the accountants in my department began to get up and ask questions about how they were supposed to get by with this hit on their salary, or if they could sell vacation days to make up for the loss.

In a room of high wage earners, half of whom manage money for a living, people were downright panicked and wondering how they were going to survive with two less weeks of pay this year. This absolutely blows my mind. These aren’t bad, irresponsible people. Most of the ones I know personally are great people.

These were good people who had put themselves in a financial position that even a weeks less pay was a disaster. This is a sad reminder of why being wise with your money is so important. This is why we build emergency funds. This is why we pay off our debt. At some point in your life you will be the victim of a job loss or pay cut. It is up to you how severely those circumstances will impact your life.

Wealth isn’t necessarily being able to go on luxurious vacations, or having an ocean front house, or even being debt free. Perhaps wealth is simply not being brought to tears as you are forced to decide between your house and your car because of a weeks less pay?

Please continue sending any personal finance related questions, suggestions and story tips to centsabilitytowealth@gmail.com

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