The Value of a Walk-Away Option and Screw-You Fund: The Real Reason I’m Doing This

Day 134 | $57,116 paid | $33,601 till freedom

Do you remember that mysterious “funk” I’ve been feeling? I first referred to it on 11/29, then again on 12/4, then I thought I had figured out its source on 12/11. I originally labelled it as a “general malaise,” and I didn’t know why I was feeling it. On 12/11, I thought I had could blame it on the fact that my money was no longer going towards cool stuff like it once did, but was instead going towards my student debt, and I found the whole experience very demotivating and funk-inducing.

Well, I think the my subconsciousness has finally given me a peek into its deep inner workings. Now, I’ll be the very first person to admit that I’m not the world’s most self-aware person, and this blog has been one huge attempt at trying to understand myself better–what drives me, why I do what I do, etc.  But I think I’ve had a critical insight into what was causing this funk and why I’m trying to pay off my student loans in such an accelerated manner.

On 9/5, about a week into NMHD, I listed all of the reasons why I thought I was doing this crazy financial stunt. The truth is, I didn’t really know why I was doing it, so I wrote down all of the reasons I thought sounded right. And some of them are actually quite valid and applicable. The first two reasons I listed–to have the option of starting my own business and to get off the treadmill–even alluded to the real, underlying reason in a round-about way.

But today, for whatever reason, it finally dawned on me exactly why I’m trying to pay off my loans so quickly.

I’m not going to go into specifics because the purpose of this blog is to neither have NMHD Pity Parties nor is it to libel the place that gives me a great paycheck every two weeks. I will simply say that I was passed over twice for a promotion in my then-current role. (The first time I missed the promo was in March, the second time was at the begining of August–the same month I started this blog.)

I didn’t understand why I had been passed over, so I escalated to HR, but they were impervious to my pleas and arguments. At that point, I thought about leaving the company. The only problem? I couldn’t walk away. My salary paid for my high standard of living and allowed me to pay the regular rate of my student loans. I needed that salary. And that salary was so high for the Austin area that I was convinced no other local company could match it; Fortune 50 companies like the one that I work at pay MBA-level salaries all day long to people with four years of work experience and no technical skills (i.e., me) because they can afford to invest in them and groom them over time. Very unfortunately, there aren’t that many Fortune 50 companies in Austin.

And moving to a new city for a new job wasn’t an option because 1) I have great friends here, 2) I love Austin, and 3) I had just bought a house using the $8k First Home Buyer tax credit and couldn’t afford to both sell the house at break-even (blasted realtor fees!) and pay back the credit to the government.

So I was stuck. Looking back, it dawned on me, albeit subconsciously, that I had become a prisoner of my standard of living and student loans and I was being forced to work at a company that didn’t value me the way I thought it should.

Despite my ruffled feathers, I still came to work every day and applied the same exact effort (very high), delivered the same exact results (very solid), and had the same interactions with all of my business partners (very positive).

However, I was no longer “feeling it.”

I looked within the company for a new job that would also serve as a promotion and I found one within two weeks. I even got a 6% raise out of it. Missing the promo twice combined with my lack of a walk-away option terrified me into taking action to find one. (I did have a small Screw-You Fund, but given the size of my loans and standard of living, it wouldn’t have lasted very long.)

So I decided, subconsciously, to pay down my debt so it would be easier to walk away if I were to ever encounter another  bad situation at work. I convinced myself in that post on 9/5 that I was doing the pay-down for a bunch of very different reasons, and the first two hinted at the true reason, but until today, I never made a direction connection between the events that happened at work, the way they made me feel, and my mission to pay down my student loans.

Is it odd that it took me this long to make the connection? Am I that out-of-touch with myself? I don’t know. Writing it down like this makes the connection seem so obvious, but at the time of starting this NMHD mission, my thoughts were actually pretty simple: “Wouldn’t it be nice if I could get out from under this crushing debt? If I could do something else with $1,057 every month?”

The funk I talked about earlier first settled in when I got passed over for the promotion the second time. It got really bad, though, when I realized, after paying down $50k in three months, that I could have spent that money on something fun instead. I attributed my funk to the fact that I wasn’t spending the money on fun stuff, but on a piece of paper.

I think that’s probably an accurate attribution, but now I would also draw a parallel to my original feeling of being trapped in my job. Before NMHD, I was trapped in my job to maintain my high standard of living and to pay off my loans at a standard rate. Now, with NMHD, I am trapped in my job to maintain a much lower standard of living and to pay off my loans at an accelerated rate. Because failure is not an option for my NMHD mission, I feel even “more forced” to work than I did before, and this is a much more cramped trap than the original one.

Like almost all human beings, I don’t like being forced to do things. I want to feel like I have options and am in complete control of my life.

Before I got passed over for my promotion for the second time, I truly enjoyed my job and I truly liked the company where I worked. I like my job now, and I still like the company. I still work my tail off every day. However, I know I’m still in a trap, so there is definitely still a funk, and I’m still not quite feeling it.

I believe that I will be out of the funk and once again feeling it when I have my loans paid off and I have about $10 or $20k in my Screw-You fund. At that point, I won’t be trapped. I’ll have a walk-away option supported by savings that I can live on for four to eight months if I am ever mistreated again. And because I’ll have gotten used to a lower standard of living, I won’t require a job that pays a super high salary.

Hear This: I don’t want to be considered a disgruntled employee because I’m not. I like what I do and I like where I work. They pay me well and I did eventually get promoted. I don’t want the soundbite for NoMoreHarvardDebt to be “disgruntled employee pays off $90k student loan in ten months so he can quit job.” I just want some extra security so that I can stick up for myself if I have to.

Some of my friends who work at the same company should have gotten promoted years ago, but they didn’t. I can’t help but wonder if they themselves are also imprisoned by their own standard of living and student loans, and that’s why they’ve never given the company an ultimatum and demanded a promotion.


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28 responses to “The Value of a Walk-Away Option and Screw-You Fund: The Real Reason I’m Doing This

  1. shana

    Not sure if you’ve read these books, but you might enjoy reading “What Got You Here Won’t Get You There” which talks about reasons why people get stuck in their careers even though they might kick ass at their actual work. It’s an easy read and kind of ties in to the idea of getting passed over for a promotion without any obvious issues.

    4-hour work week is another book that talks about not being trapped in a career that isn’t fulfilling. It’s how Tim Ferris structured his life so that he could work less and enjoy life more.

    Just thought you might like both based on this post. And having the ability to escape and pursue more meaningful work is the best reason I can think of to get out of debt.

    • These books have been mentioned elsewhere in the comments, so there must be a lot of value in them. I’ll check them out when I have money to spend. Thanks for the suggestions.

      • Sarah

        Probably an obvious statement, but maybe you can see if the library has these books instead of waiting until July. I’ve cut Amazon and Netflix from the budget in favor of the library.

        Great post, btw.

        Oh, and I think I found a great job for you the other day when I was at Town Lake. They have a rowing center (Texas Rowing Center) didn’t you row at Michigan? Next time you go to Town Lake you could see if they are hiring, the pay probably wouldn’t be too great though.

        • the library — good call 🙂

          TRC? So funny you mention that–I actually did work there for a few weekends back in 2006. Thanks for looking out 🙂 (BTW, did you happen to go to TL on Saturday? Ridiculously beautiful day–it was packed!) You’re right–the pay isn’t great; I worked for free boat rentals :-/

      • Ever heard of “the library”? …or don’t those exist anymore?

  2. Jess

    What a revelation! I don’t think you’re out of touch with yourself – you clearly had the thoughts, but when you finally put them into action you uncovered more self-knowledge. Everyone takes their journey at their own pace – and huge life changes can shake things up. Congratulations!

  3. Patrick

    I think you’ll find that you’ll have a lot more fun at work when you don’t need the money anymore. That analysis is spot-on. I know that you’ve found MMM, so let me remind you of this post:
    Basically, the gist is that the people who don’t NEED their jobs are the ones that get the most satisfaction out of them. I’m not in a MMM place…not ready for retirement, but I know that in my sector and geographical area, if I were to leave my job, I could easily add another $15,000 to my salary. It makes it easy to focus on doing what I enjoy and not tolerating the red tape. My bosses know that I’m more valuable on the job market, so they let me focus on the things I enjoy and in the end, I end up being overall more productive!

    Good luck!

  4. Sarah L

    I think it’s huge that you’ve discovered that about yourself. Good for you! And if you read Ramit Sethi’s blog, I think that your aspirations for paying off debt and saving up in a Screw You fund is very fitting for our age group. In an interview, Ramit says that he thought the reason why 20 something year olds would want to earn an extra 1K on the side was to be able to party it up. But after doing a ton of research, he was blown away to discover that the vast majority simply wanted the ability to walk away from their full time jobs.

    And it sounds like this blog has changed the pace a little bit to be more about lifestyle decisions than just simply paying down debt. I agree with Shana, who recommended Tim Ferriss’s 4 Hour Workweek. I think you’ll find it extremely interesting and relatable.

    • Fascinating. Kimberly’s position would appear to agree with the data…so would draknor’s, Patrick’s, shana’s…not sure who’s in their 20s out of that list, but we appear to be a pretty serious-minded (and pragmatic and independent) group of folks, contrary to Ramit’s initial speculation.

  5. I believe this to be part of the delayed discovery that school does eventually end. Survive K-12, college, graduate school. Even if you took breaks, you have been in school for 19 years. Schools has lots of milestones and clear ending. Enter the world of jobs, and you discover there is no finish line. It’s a quite discouraging prospect.

    I was reading a trade magazine article about doctors getting their company to pay for additional degrees. One (crazy) guy had an MD, PhD, and was leaving his ‘unsupportive’ company to get his JD. He clearly loved the arms of academia. Why not? It has tangible rewards of accomplishment with a clear measuring stick. The rest of the world isn’t like that.

    Many people cope by finding something else they love and use to find fulfillment – a family, a pet, a hobby, a side business, whatever makes you happy.

    • interesting diction :-/

      …”cope” doesn’t evoke images of “thriving”!! 🙂

      • I picked ‘cope’ deliberately. Many of us are attached to this idea of our work being our ‘calling’ or fulfilling us. While there are people who have achieved that feeling in their jobs, good for them. The rest of us deal with a job that we can tolerate or makes us happy enough. My spouse says while is job is ‘fine,’ his favorite part of the day is coming home to his family. It doesn’t mean the job is bad; it’s just not all that he is.

        Better question to ask youself when trying to get out of your funk is ‘what part of my day/week do I look forward to the most?’

  6. The feeling of freedom you have when you have almost no financial obligations is… incredible. I had a similar revelation last spring — I was on the treadmill, not really getting anywhere. I took a role change at my company and realized that it wasn’t greener on the other side of the office; it was just more of the same. And then it dawned on me — what was I waiting for? I had all my loans paid off, was renting, and had a decent savings account built up.

    Took an emotional rollercoaster, but I finally got up the nerve to walk out. Not disgruntled, not frustrated, just… ready for something different. And now I’m here, 7 months later, trying lots of different things. Nothing as lucrative as that corporate IT job was, but I really feel like I’m in control of my life now and its just a matter of picking where I want to go!

    Freedom is amazing. Scary, but worth it.

  7. kimberleymosher

    I’ve been reading your blog since you started this challenge and I love reading your posts. And, I found that I could really relate with this post – I’ve been in similar circumstances myself, but haven’t challenged my personal financial system as stealthily as you have, but boy, this is motivation!

    I think the feeling you (and many others have) is one that most of us 20-somethings experience at some point. We don’t want to be tied to anything, if we have an opportunity not to be. We do work hard, and we want the “best” (best being whatever we define it to be – for you it’s drinks at the bar, for me it’s travel, among other things).

    I see some of the other comments have mentioned Tim Ferriss and Ramit Sethi already – two writers who’s material I have really resonated with in the past. I hope you check them out, if you haven’t already.

    Thanks for openly discussing this here. It’s really nice to be a reader.

  8. Sarah

    I was at Town Lake on Sunday. When I ran by TRC I thought that would be a great job for you. Wow, clearly I am obsessed with your blog haha.

    I had an idea for a future post: you should repost the cc bill you posted in one of your earlier posts along with a more recent bill so we can see the difference.

    Also are you on twitter?

    • I’m on twitter as nomoharvarddebt (darned character limits), but I’ve never tweeted. I can’t get into it…I’m not feeling it.

      Good idea on the CC bill; I’ll do it soon. I think the prior one showed $1400 or so of entertainment spend in a month…a more recent one will show $200-$300.

  9. Diana

    NMHD- ever since you referenced MMM, i’ve been cheating on you with him but I’m back. He really is incredible and I’ve gotten some of my coworkers hooked as well. I love that he taught himself to just not care about most material things. Once you don’t care, you’re happy with what you have. I’m working on that every day. And also, can I say how much I love that you wrote about buying Burberry frames because some schmuck at graduate school told you to? In retrospect, that is such an absurd thing to do, I know you must have been kind of embarassed to write it but I love that you did. You’ll be off the treadmill soon enough and I can’t wait to hear about how that feels!

    • Cheater! I know…when I posted about MMM, one of my thoughts was, “I better not lose any readers to him because of this!” But then I stopped being selfish and thought you guys deserved to know about him even if my readership went down. I’m so selfless 😉

  10. brian

    I don’t know if you dislike referencing details on your blog, if so I apologize for asking. I’m just curious what your position and salary was when you started out at your company with a Harvard MBA.

    I assume you were able to land those promotions and the % increase must have been very large to get you to your current salary. The reason being, you bought your home making less than $75K/year ($8K credit requirement is income less than 75 for single and 150 married couples).

    It’s interesting comparing housing pricing and property taxes in different areas of the country. $75K/year is a decent salary, but in my area on Long Island, NY it will not cover a home in an decent neighborhood. Here a decent average 4 bedroom home in a good neighborhood will run you $350K at least and $9K/year in property tax.

  11. Sarah L

    Thought you might find this article interesting, too 🙂

  12. Cheryl

    Hi NMHD, wanted to say that I really, really enjoy reading your posts and the comments. It took me a long time to realize that money was just a tool, nothing more, not a yardstick, its just a means to be able to have choices and freedom. I also get a great paycheck every 2 weeks, but even as a “star” in a large reputable company, this is a dead end job (no promotions to be had) and a huge time suck. I think this is the world of work, illogical and ambiguous. And I am not sure I want a promotion anyway, I cant even imagine the strings that would come with that.And after years of this not that rewarding. Good for you that you are going through this in your 20s, it took me a lot longer. Cheryl (who has a “freedom fighter” plan)

  13. Roni

    Thank you so much for sharing so openly. Reading this post was like having my thoughts, feelings & experiences articulated perfectly. While there are many similiariities, I wasn’t passed up for any promotions. Rather, I simply wasn’t rewarded for my hard work & ultimately results. Yet, my results are respected & acknowledged verbally by peers, mgmt, vendors & even leadership. I continue to be well respected for my contributions & am the resident project SME. However, when I requested an increase, a title change or/& for a company-paid certification, I was stonewalled. BTW, a title change is free (paperwork is a contained expense). As for the increase, they were so busy trying to convince me that I’m adequately compensated that they NEVER once even asked how much I was looking for (it could’ve been 1%).

    I love that you took matters into your own hands & moved on. More importantly, you’re still performing & being positive at work. I definitely perform but I do struggle w/my moral, given the circumstances. So I’ve inadvertently chanelled my energy & focus into “getting out from under”. Since like you, I felt that I could only go so far in fighting this battle (HR was useless) due to my financial obligations.

    Fast forward 17 mos…we’ve paid off 8/9 consumer loans, totalling $62K (during a mandatory co-wide pay cut & lots of murphy). We anticipate paying off the final debt (student loans, no less) by New Years. I hope/pray to start the year right…financially, emotionally & otherwise FREE from my self-imposed bondage.

    You’ve inpired & helped people by sharing your “pain” & I want you to know that your readership appreciates you. THANK YOU!!!

  14. Pingback: Up, Up, and Away: Increasing Costs of College | ENG/IMS 224

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