How to Say “No” to Your Boss
August 29, 2013Unless you’ve been living on a deserted island, you’ve probably heard about the exploits of my now former mayor, Bob Filner. The most notorious were the allegations by numerous women of various forms of inappropriate flirting, sexual harassment and possibly even assault. Less provocative, but also quite disturbing, were reports of improper demands for financial concessions from developers and the misuse of a city credit card for personal expenses.
In the latter case, when the mayor’s office requested reimbursement, city comptroller Ken Whitfield denied it and according to the Voice of San Diego:
Whitfield said he did not have any problem denying the mayor’s office’s requests. He said the best advice he’s received came from his boss from his first job: Always put some money away so that you have the independence to say no, even to people above you.
“I’ve got a lot of f**king money in the bank,” Whitfield said. “It allows me to sleep at night. It allows me to do my job with a whole lot integrity and not worry about losing it.”
This is an overlooked benefit saving money. We often think of savings as a “rainy day fund” but there’s a positive aspect to it too. The more savings you have, the more freedom you have.
There are various degrees of financial independence. The first level of financial independence is when you get a job that allows you to live on your own. You’re no longer dependent on your parents or other family members for financial support. The ultimate level of financial independence is when you have enough assets to provide you the income you need to live on. At that point, you only work if you want to and you’re no longer dependent on anyone else.
Having sufficient savings to last you until you can find a new job puts you somewhere in between. A friend of mine from many years ago called it his “f u money.” It allowed him to walk away from any job that he no longer felt comfortable doing, knowing that he wouldn’t have to worry about making his home payment or putting food on the table while he looked for a new job. So how do you accumulate enough savings to give you that level of freedom? Here are some steps to follow:
1) Set a goal of how much you’d like to have. Financial experts typically recommend having enough to cover at least 3-6 months’ worth of necessary expenses but you may want to increase that to 6-9 months or even a year’s worth depending on how risky your income is.
2) You can then use this calculator to see how much you need to save each month. If the number doesn’t seem realistic, you can extend the time period to reach your goal.
3) Go through at least the last 3 months of your bank and credit card statements and record your expenses on a worksheet like this to find out where your money is currently going (if you’re like most people, you may be surprised) and then see if you can use any of these (relatively) painless money-saving tips to reduce some of them and free up some savings. Keep in mind that every dollar you spend decreases your financial freedom so ask yourself if each expense is really worth it. Also remember that no matter how little income you have, others are getting by on much less so you can too.
4) Have those savings automatically transferred each month or pay period into a separate bank account. This money should not be invested in anything volatile like stocks or even most bonds. Otherwise, the value can be down when you most need it.
To minimize fees and maximize your interest rate, consider these alternatives to traditional bank accounts. If you haven’t maxed out your IRA contributions, a Roth IRA can be another place for your emergency savings since the contributions can be withdrawn tax and penalty free anytime for any reason (although you may have to pay a tax plus a 10% penalty if you withdraw earnings before 5 years and age 59 ½). Anything you don’t withdraw can grow to be eventually tax-free. Just be sure to keep your Roth IRA in something safe like a savings account or money market fund until you’ve accumulated enough emergency savings somewhere else.
5) Try not to touch these savings unless you absolutely need to. One of the advantages of having it in a Roth IRA is that you have to complete a withdrawal form to access it, which might make you think twice.
Following these steps will help you build up enough savings to give you more peace of mind. You don’t have to worry as much about a leaky roof or a faulty transmission on your car. You’ll also be able to safely say “no” to your boss, even if he is the mayor.