Financial Improvement and Self-Confidence

Several months ago, my mother-in-law made an interesting offhand comment that has tossed around in my head ever since. We were talking about my career path and how I went from being incredibly crushed at work – to the point of skipping a weekend visiting them because of work crises – to gradually standing up for myself at work and eventually quitting and starting my own business. When I sold that business and returned to an employment state, I did it exclusively on my own terms.

She made the point that, as my financial health improved, my self-confidence in my professional life also improved, which opened a ton of career doors for me.

When I was pushed up against the wall financially, I was basically scared to step out of line at all at work. If someone told me to do something, I did it, without question. I didn’t argue about it. I didn’t stand up for what I felt was right, nor did I do anything about what I felt was wrong.

I tolerated a poisonous coworker that nearly derailed a multi-year project and didn’t really say anything about it. I worked some ridiculous hours completing project elements that other people probably should have covered. I traveled a ton when I didn’t really want to travel at all.

I did that because I needed that salary. I was pressed up against the wall financially, mostly due to my awful spending habits but also because of my outstanding student loan debts and my outstanding car loan, and I lived in fear that I would lose this job and I’d basically be homeless. This obviously created a lot of stress, which I glossed over with yet more spending. It wasn’t a good cycle.

However, it was a cycle I was determined to break after the birth of my first child. Sarah and I buckled down and made some real financial changes to our life. We paid off all of our debt over the course of a little over a year and started making real concrete financial plans for the future.

In parallel with that came some professional changes. I had established a reputation at work of just being someone upon whom miserable tasks could be dumped and over the course of a couple of years, I started bristling against those tasks and standing up for myself more and more. This eventually came to a head at a meeting where I openly criticized a particular workplace policy in a way that I figured would get me into hot water, but instead I found that it actually raised my professional profile a little.

I began to be more and more assertive as time went on. I demanded extensive time off for the birth of our second child and I received it. I started openly suggesting some significant changes in the project I was working on. Along the way, I was invited to meetings and other forums that had previously been closed to me. I was dissatisfied with my career, but it seemed to be going better than ever.

It was that same self-confidence that led me to walking away from that job shortly thereafter, mostly because I wasn’t happy with what my role had become and where things seemed to be heading. Instead, I took up a full time gig as a writer.

It was a leap that took a ton of self-confidence, which I didn’t have just a few years before. If anything, having an infant and a toddler at home should have made me even less self-confident about taking professional risks.

What changed? I had righted my financial ship. That was the big change. I was no longer in fear of everything collapsing if I lost my job. Yes, it might be rough for a little while, but I had a firm financial foundation under me. I didn’t have debts hanging around my neck. I had a nice emergency fund in place. I had solid retirement savings under my belt. I also had a couple of moderately successful side businesses growing (one of which was The Simple Dollar itself). Not only that, I was spending a lot less than I earned – things were improving literally every month. Things would be okay.

That sense that my finances were in good shape and that my world wouldn’t collapse if I lost that job made me feel more comfortable asserting myself at work. I felt more self-confident in everything I did there because I knew that the threat of a job loss was far less powerful than it once had been.

That self-confidence was transformative. Not only did it make the final year or so at my previous job much more tolerable than it would have been, it also gave me the courage to try other endeavors, which led me to jumping to The Simple Dollar full time when it began to look feasible.

The self-confidence that came from knowing that it wouldn’t be a disaster if I had to change jobs, along with knowing that I could easily take the risk to change jobs without upsetting my apple cart, enabled me to not only advocate for myself at work, but it gave me the confidence to leap into a major career shift that was good for my health, happiness, and finances.

What’s the take home lesson here?

First of all, don’t let yourself get into a situation where you absolutely have to keep your job or else your life falls apart. When you’re in that position, you’ve allowed your job to have an enormous degree of power over your life, which means you simply have to accept what your boss shoves in your direction. Absurd overtime hours? Drudgery work? Poor treatment? You’re in a position where you have to accept it or add additional stress to an already fragile life and financial situation. Avoid this at all costs.

The easiest way to avoid this scenario is by living on less than you earn at all times. Never, ever, ever spend as much as you earn. Always spend less. Put aside parts of your paycheck for retirement and for an emergency fund. At the same time, don’t allow your debts to grow; instead, pay them down rapidly. When you pay off a car loan, don’t look at it as an opportunity for lifestyle inflation – instead, start saving an amount equal to your car payment so that in a few years you can just pay cash for the replacement.

The reality is that whenever you assert yourself in the workplace, there’s an upside and a downside to it. The upside is that if you have a legitimate and well-articulated concern, you’re likely to see at least some degree of improvement in whatever it is you’re concerned with, particularly if you have a good record as an employee. You’re also likely to be seen in a more positive and proactive light by others, provided you carefully choose what things to stand up for and don’t complain about everything. The downside, of course, is that you can potentially create conflict while being assertive, which has some risk of having a negative impact on your career. Being in a poor financial situation causes that downside to magnify, increasing the risks associated with standing up for yourself. Financial self-control makes it easier for you to be more self-confident at work.

So, my career advice to anyone and everyone out there is to get in control of your finances. Spend less than you earn, have a healthy emergency fund, and know that your world won’t fall apart if you were to lose your job. This makes the risk of taking a stand at work much less, and taking a stand can have some tremendous upside for your career.

Good luck!

Trent Hamm
Trent Hamm
Founder of The Simple Dollar

Trent Hamm founded The Simple Dollar in 2006 after developing innovative financial strategies to get out of debt. Since then, he’s written three books (published by Simon & Schuster and Financial Times Press), contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.

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