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Return to Work: How Financial Freedom Gives You Options

News stories abound lately with headlines about the “return to work.” It’s a funny term to me as there really hasn’t been a “stop to work” during the pandemic season for many Americans, especially for front line workers.

More than 70% of white-collar workers in the U.S. are currently working remotely. Given the increase in vaccinations and gradual re-opening of our country, some businesses are working hard to bring their employees back to the office.

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This may be a difficult transition for you. Perhaps you’ve gotten used to managing your schedule and being available for the realities of life at home.

On the other hand, you might crave that social interaction in your workplace. Perhaps managing virtual school or your typical workload became more difficult for you in this Zoom-world we now live in.

No matter which side of the return to work fence you’re on, I’d venture to say that most everyone would prefer to have options. Perhaps a few days at home and a couple days at the office may be the trick.

As employees, we can’t control what our employers ultimately decide to do regarding their return to work policies. But, we can control our financial future. And when we’re in control of our money, we can give ourselves options. We can give ourselves the confidence to request the work situation that fits our lifestyles best.

With that spirit in mind, here are some ways to create options and confidence in your financial life starting now.

Save Money for Emergencies

There’s something about having money in the bank that gives you a jolt of confidence. Financial confidence can help you make decisions with your happiness in mind.

My favorite bucket of money that gives me peace of mind is our six months of expenses saved for emergencies. This is money with a purpose. That sole purpose is to protect our family from the unexpected.

Read More: How Much Should You Have in an Emergency Fund?

Those unexpected moments could be an expensive car repair, a broken washing machine or  jaw-dropping medical bills. Life happens. It’s important we’re prepared for it.

In the case of our society’s collective return to work, this amount of money could also be your ticket to transitioning into a new job you actually enjoy. With the financial means to cover your monthly expenses during a transition period, you have now given yourself options.

Invest for Retirement Early and Consistently

Creating a habit out of investing for your retirement will ensure your post-60-year-old days are taken care of.

Unfortunately, I didn’t start taking this seriously until I was in my early 30s. I wish I had started investing for my retirement a lot sooner.

Even so, compound interest has been good to us. Today, we have around $500,000 in retirement accounts. I can only imagine where this balance would be if we’d started investing seriously at 20 instead of 30.

Our $500,000 has the potential to grow to around $2,000,000 by the time we’re 60 years old (without additional contributions, assuming a 7% return over the span of 20 years). This gives our family a peace of mind knowing that retirement is taken care of.

We’ll continue to add to our retirement accounts, but we’ll be taking our foot off the gas a bit with contributions.

When you feel confident knowing an important portion of your life is set, you can make decisions that work best for your life today.

My wife did this recently with her career. She worked in the frenetic advertising industry for a decade and then did the stay-at-home mom thing for another five years (which can also be quite frenetic). When she was ready to return to work, she wanted to return on her terms.

Instead of pursuing management and climbing the corporate ladder, she decided to become an administrative assistant. For her, this is a job that is more predictable and a lot less hectic. Without the financial confidence she’s gained through short term sacrifices, I don’t think we could have made (or afforded) this important decision as a family.

Save Money for Getaways

Outside of emergencies and retirement, there are plenty of reasons to save and invest. When you have the means, you have the options.

Here are a couple that I love when it comes to the return to work:

Vacation Savings

Work can be stressful at times. That’s why it’s important to have the option to get away. The first step is to have savings set aside for vacations.

Since vacations are so important to our family, we put away 10% of our income each month toward future trips. This way we know that if work gets us down, we can always get away because we have the money.

Now, 10% of your budget may be a lot to start off with. If vacations are a priority for you, try laddering up your savings each month over the next year. Start with 1% and then build up to 10%.

This may require you to eliminate some non-priority spending or even make more money, but aren’t vacations worth it?

Read More: 10 Ways to Save Money on Your Next Vacation

Sabbatical Planning

What if a week or weekend is not enough? How about six months or a year to reassess your life and travel the world?

Welcome to the world of the sabbatical!

Depending on where you work and the benefits provided, this time out of the office and away from work may be paid or unpaid. Given that only 16% of companies offer paid sabbaticals (in addition to legally mandated paid family leave), you may want to start saving and investing for this opportunity.

Think of it as a mini-retirement or just a moment to reevaluate your life if the return to work is feeling like a return to depression.

Final Thoughts on the Return to Work

Whatever your thoughts are on the return to work, saving and investing undoubtedly gives you options.

Personal Capital’s free suite of tools offer you a deep look into your financial situation so you can see what options you may already have. By understanding your numbers, you’ll get the confidence to steer your life in the direction of your choosing.

That way you’re returning to work with a plan.

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Personal Capital compensates Andy Hill (“Author”) for providing the content contained in this blog post. Compensation not to exceed $500. Author is not a client of Personal Capital Advisors Corporation. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Andy Hill is a husband and father of two kids. His personal finance goal? To give his family the best life possible and strengthen their family tree for generations to come. In 2016, he launched Marriage, Kids, & Money, a blog and podcast about young family finance. In 2020, he and his wife achieved a personal goal of becoming millionaires in less than 10 years. Now, they thrive on helping others do the same.
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This year, my top financial priority is:

Building my emergency fund
Paying off high-interest debt
Budgeting better
Saving for a short-term goal, like a vacation or new car
Increasing my investment contributions
Maintaining status quo - I’ve got this under control

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