Years ago, during my undergrad, I attended a lecture about grad school. One of my profs talked about his experience being a grad student, and how he’d worked between his undergrad and starting grad school. He made the point that if you save a little bit of money and bring it into your grad studies, life can become a lot more pleasant (with the ability to take a pretty undergrad out to a movie or to purchase the odd pitcher of beer).

At the time, I thought this was the most blatantly obvious thing I’d ever heard (I’ve always been a saver and had a bit of extra cash available, even through my undergrad). The funny thing though is, 1) most people don’t realize this and 2) its not just true about grad school – its true about life.

Say someone is working paycheck-to-paycheck, maybe supporting a family or maybe just themselves and a deluxe apartment in the sky. Every two weeks, his pay is eagerly devoured by all his life expenses, with anything extra he can afford disappearing into a credit card debt (that never seems to get smaller). Say on a Wednesday before payday the boss comes in and rips the guy a new hole for something that isn’t his fault. How is he feeling?

Take another guy, similar situation but no debt and 3 months of savings in the bank. Maybe his daughter only goes to 1 dance lesson per week, maybe his deluxe apartment is actually a shared 2 bedroom in a 30 year old building. His boss comes in and rips him a new hole for something that isn’t fair. How is he feeling? Pretty willing to tell the guy off and head home to enjoy a long weekend before starting his new job search, eh?

The joke of it is, the employer would probably pick up on the first person’s desperation and would be less likely to chew the second guy out (because he’s probably stood up for himself in past situations). I suspect employers and managers often get a feel for the people who really need the next paycheck. In “The Millionaire Next Door” it talks about the two daughters of a rich guy. A man marries one daughter and accepts a cushy job at his company. The old bugger treats him like a servant in the house and after a couple cocktails starts calling him bozo. The other son-in-law politely refused a similar position and had refused monetary handouts, and every time he visited was treated as a honoured guest.

Your diginity shouldn’t be for sale. Especially for the consumer trinkets they offer these days. Having someone sense your desperation and run you down will make you feel far worse then the $300 running shoes or the trip to the all-inclusive made you feel good.

Being debt-free with 3 months of living expenses (either in the bank, in the stock market or in property) is half-way to freedom. Until then you’re just a slave.