Bullish: Save Up an Emergency Fund, But Be the Kind of Person Who Never Needs One

1. If you have a regular job, set a goal to make your salary no more than 75% of your total revenue (yes, revenue — you are a business!) by this time next year. Or, if your salary is really low and your job not that demanding, 50%.

2. If you don’t have any income other than your job, you might start here: How to Make an Extra $100 a Month, Part I and

4. If you have a regular job, consider becoming an intrapreneur. I just heard this word, and, while I try to avoid new corporate coinages (“diversity synthesis = diversynthesis!”), this one is pretty descriptive: an intrapreneur is an employee who starts an enterprise within her company. I am one of these. All the excitement, none of the starvation! I was teaching for a test-prep company, and became an intrapreneur when I volunteered myself to teach a test we didn’t yet teach. At the outset, I was writing worksheets and manuals and slides, teaching pilot classes, and setting up a blog, among many other, sundry tasks. One of the great benefits of being an intrapreneur is that, before too long, other people were brought on board to take many of those tasks off my hands and to do better at them than I could’ve done myself — the lonely company Facebook page has long since been eclipsed by the efforts of a full-time marketing person. Of course, the point here is to make extra money, not just to take on extra work — at my company, I am paid hourly anyway, so I essentially just created as many hours for myself as I was physically able to work, and I was also offered a percentage of revenue for the first year. Your goal in being an intrapreneur is to negotiate something similar. If you can’t get any extra compensation for the extra efforts you are proposing, then use intrapreneurship to gain experience and make contacts, and then create an exit plan to become a real entrepreneur while you’re still young and sprightly.

5. Consider whether you could volunteer at something that would become an income stream within a year. For instance, many programs (such as 826NYC)need volunteer tutors. Once you’ve helped a few dozen kids write papers and conjugate verbs, you can certainly do the same for paying clients as well. Sports coaching, event planning, teaching arts & crafts — there are plenty of areas where the barrier to entry as a volunteer is pretty low, and the jump from being an accomplished volunteer to getting paying clients isn’t all that high either. In areas that don’t require professional certification (teaching knitting), people mostly choose their experts based on personality anyway (you cannot be an asshole while we are laboriously making our own socks).

Of course, it’s still a good idea to have an emergency fund — there certainly are eventualities that are not much helped by the above, such as surviving a bear attack. But an ordinary episode of getting laid off doesn’t have to be an eight-month setback, as long as you prepare now. Setbacks will happen. Jobs have very few obligations to you. No matter how you feel towards your company, companies do not have feelings and thus do not feel loyal towards you; the people within a company who do have positive feelings towards you may themselves not be there later.

So, put 3-6 months’ expenses in the bank as soon as you can. And then diversify your income such that emergencies are close to impossible.

(Check out the Bullish archives for advice on quitting your job, managing your time, and pricing your freelance work).

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    • Lisa M.

      I loved Reader’s Digest as a child, so therefore I love this article.