You may have heard of the concept, primarily created by women, to create a pot of money that they can use to escape a relationship if they feel the need to. The idea is incredibly simple: the woman saves, in her own name, a “get out” fund that she keeps separate from her partner, so if the relationship becomes untenable, she always has the financial means to remove herself from it.
This same concept – an amount of money, set aside for a particular purpose – can be applied across all areas of life, but is especially useful when considering leaving your job.
Why is this necessary?
The sad truth is that, at some point in your working life, your job may become untenable. While most of us expect ups and downs while employed, there are certain situations that you should never be forced to accept for financial reasons alone.
For example, if you find yourself subject to harassment, being forced to remain in your job due to a lack of financial options can be incredibly difficult. Sadly, this is a far-from-uncommon situation: thousands of workers have been forced to accept the situation because their personal finances are not in a condition to allow them to just leave their employment.
In addition, there are also situations where you may find yourself genuinely fearing for your physical safety. If your workplace is unsafe or failing to comply with regulations, a lack of financial options means you find yourself facing a terrifying reality: jeopardize your finances, or face a future where your family has to find a wrongful death attorney to deal with the aftermath of catastrophe. This is a terrible decision to face, but one that is far too common – all because workers do not have the financial freedom to leave a job that they know is perilous to their health and well-being.
However, you can avoid these issues by creating a “get out” fund that can be accessed in the event you need to leave your employment unexpectedly.
How to build and use your “get out” fund
- Aim to build your fund to a point where the amount saved is sufficient to cover your basic expenses for three months. This amount should include all of your bills, as well as a small budget for food, toiletries, and household items – you can study your existing spending for a realistic idea of what you’ll need to cover those three months.
- You can save towards this fund using conventional money-saving techniques, as well as reducing your living costs or even engaging in a side hustle to earn the extra cash – the side hustle will be particularly useful if you do need to leave your day job at short notice.
- The money you save should be completely separate from the rest of your finances; separate even from your standard savings. This money is for one purpose and one purpose only: leaving your job at short notice. Ideally, you’ll get to retirement with the fund still in place, never having to be used either for its primary purpose or drawn on to meet general expenses.
No one should have to face a choice between their own well-being and their family finances – and a “get out” fund can provide the reassurance you need to ensure you never have to deal with such a scenario.