Losing my job wasn't devastating because of a habit I built 6 years in advance

On November 15, 2013 I lost my job.

It was a sad day, but not a surprising one. I'd been working for a start-up software company for the past six-plus years and the simple fact we had to face was that we needed to move on.

It hadn't worked, at least not in the way we dreamed it would. Sometimes that's just the reality of a start-up.

But this isn't a story about losing my job. This is a story about what came next.

This is a story about the opportunities you're presented when you plan for the worst but dream of the best.

This is a story about all those years of saving finally paying off.

What might have been

Let's face it. Losing a job is scary.

On top of not knowing what I would do next, I had a wife and 20-month-old son to consider. Not to mention another son who was due to be born in just over a month.

This was not the ideal time to lose a job. But then again, is there ever an ideal time?

In an alternate universe I might have been sent into a panic. My immediate focus would have been generating income. As much as possible and as soon as possible.

I would have shotgunned resumes out in all directions and probably grabbed the first job that paid even a decent salary. I probably would have stayed in the healthcare IT field (like my previous job) because that would have been the easiest way to quickly get a job that paid well.

After all, I've got a family to feed and bills to pay, right?

But that's only if there were jobs immediately available. What if there weren't? More stress. Lots of it. Questions about where the money's going to come from. Maybe some debt starts to pile up.

You get the picture. It's not a happy one.

Here's what actually happened

My wife and I knew this day was coming. It was stressful simply because it presented us with the unknown. But we didn't feel panic.

Instead, we felt opportunity.

Because here's the thing: we had savings. Lots of it.

We'd been saving for years and this was the point where it was really paying off. Our emergency fund alone could support us for about 10 months. Add in some of our other savings (not counting any retirement money) and we could last over 14 months with NO additional income coming in. If we were willing to make some significant lifestyle changes, we could live for over 2 years just off our savings.

Because of our savings, we knew our family would be okay for a while no matter what. Which meant that rather than being forced to make a quick decision, we had the opportunity to really weigh our options and choose our path forward.

Through a combination of chance (losing my job) and planning (our emergency fund), life was presenting us this huge opportunity to create the life we truly wanted.

Now we just had to take it.

What is it that we want?

I've written before about what financial freedom means to me and my wife, and it essentially comes down to this: having the ability to do what we want with our time.

Kind of vague, but that's actually purposeful. We're not specifically looking to retire early or travel the world or anything like that, though those things may end being part of it. We simply want to create a life in which our time is spent on things we actually enjoy.

So with that in mind we had three main options in terms of the professional path I could pursue, each with some pros and cons:

Option #1: Find a job in healthcare IT

Pros: I could have not only found a job quickly but it probably would have paid me pretty well. And this is a rapidly growing market, meaning if I played things right I could potentially be making a LOT of money in the near future. If my wife and I wanted to primarily focus on achieving financial independence as soon as possible, this would probably be the route to go.

Cons: While I enjoyed aspects of this industry, it simply wasn't what I wanted to do long-term. This would have kind of felt like the opposite of taking advantage of our opportunity.

Option #2: Find a job in financial planning

For a few years now I've known that my long-term career ambitions involved financial planning. I love the technical side of finances and I love helping people make good decisions. It's the perfect marriage of interests. So this was definitely an appealing route.

Pros: While I'd be taking a pay cut from my previous job, I'd be able to make a decent, steady income while working in my desired industry. I could gain experience, make connections and actually start building the career I really want.

Cons: There was only one down side here, and it was the fact that I knew that one day I would want to start my own company. It's something I've been dreaming about for years, and while this route certainly could make that option easier down the road, it was still delaying it.

Option #3: Starting my own company

Which of course, brought us to option #3: making the leap as an entrepreneur.

Pros: In a lot of ways, this was the most appealing route. I'd get to start creating my dream business now instead of waiting. I could work with the types of clients I really want to work with (new parents like me). I could build my business to support the freedom my wife and I want for ourselves rather than fitting our lives around the demands of an employer.

Cons: But this was also by far the scariest route. From a pure financial standpoint, it meant not only delaying income but spending additional money to start the business. That would cut down the amount of time our savings would last. I'd also never started a business before, and while I had plenty of ideas there was no assurance that any of them would work. Now that I actually had this opportunity I'd been dreaming about right in front of me for the taking, the prospect of failure loomed large and fear started to take hold.

Weighing our options

Option #1 was taken off the table pretty much immediately. I still had it in my back pocket if things got bad, but it wasn't what I wanted to do and we didn't need the immediate money, so we quickly decided to table it.

Between finding a job in financial planning and starting my own company though, it was a really tough call. But because of the runway our savings gave us, we didn't feel any rush. So we took some time to gather information and weigh our options.

I contacted some people I already knew in the financial planning industry to get their opinions. I also contacted some people I didn't already know to get theirs (big thanks to Dave, Sophia and Alan!).

I made a list of potential employers. I also made a list of potential sources for getting my own clients.

I did some real research into what it would be like to be an employee at a financial planning firm. I thought hard about the kind of company I would want to work for, the responsibilities I would have, and the career track I would want.

I did some real research into what it would actually take to start a business. I thought hard about what my ideal business would look like. I made some spreadsheets, ran some projections, crunched some numbers.

Throughout all of this I was constantly talking with my wife about what I was learning and what it might mean for our choice. She had plenty of input and ideas, which would help me focus the next part of my search. It was a team effort.

Finally, making the decision

Eventually, all the planning and evaluating needed to end and we had to start taking action.

I have to admit that for a while I was leaning towards finding a job in financial planning. I liked the comfort of a steady paycheck. I liked the opportunity to learn more about the industry. I liked the idea of making a few more connections before venturing out on my own.

But my wife is pretty awesome, and while she knew that was a good option she also knew it wasn't what I really wanted. It wasn't what our family really wanted.

It wasn't our dream.

So she (gently) pushed me to take a chance. After all, isn't this what all our savings was for? If we couldn't use it to chase our dream then what was the point? And if we wouldn't chase it now, when would we?

And she was right. So I leapt.

I stand before you today, the proud founder of Mom and Dad Money, LLC, a financial planning practice dedicated to helping new parents build happy families by making money simple.

This was years in the making.

None of this would have been possible without our savings. And our savings didn't just appear overnight.

It was a little over six years ago that I first learned about the idea of an emergency fund. So I took some money from my tax refund and put it into a dedicated account. I started living below my means and sending a little bit more money into this account every month. Eventually I expanded my savings into "saving to spend" accounts so that I could pay for things like travel and car repairs with money separate from my emergency fund. Small windfalls, things like birthday money, generally went into savings instead of being spent. Raises served largely to increase my automatic monthly contributions.

When my wife and I joined finances it was more of the same. She was a saver too so the transition was pretty smooth. But still, there were sacrifices made. We decided to rent instead of buy because it saved us money and gave us more flexibility. We continued to live below our means, saving around 35% of our single paycheck while my wife stayed home with our son. We still spent on things we valued, but the entire time our savings were growing.

And it wasn't always easy. There were plenty of times where it was hard to sacrifice a little bit of today for an uncertain tomorrow.

But the lesson we learned is that tomorrow does actually come. And it doesn't just come in the form of car repairs, medical bills, or any of the other bad stuff that people typically talk about an emergency fund being there for.

Sometimes tomorrow brings big opportunity. And when that happens, you can either be in a position to take it or not.

I hope you know I'm not telling you this story to brag, though I am proud of what we're doing. I'm telling you because I want to inspire you to enjoy today but to plan for tomorrow. You shouldn't be saving simply because "you're supposed to." You should be saving because it gives you the chance to do what you really want to do.

It's scary to make the leap we're making. It might fail. I might not be good enough.

But then again, it might work. It might let us build the life we truly want for our family. It's an opportunity.

And we can take it because we saved.

This post was originally published on Mom and Dad Money.