Savings in the face of uncertainty

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When Kim Oksenberg, Co-Founder of Project Eve LLC, graduated from business school, she estimated that it would take just two years to aggressively pay down her student loan debt. Yes, she had sky-high rent and living expenses in San Francisco, but she’d been hired at an investment bank and would be taking home a hefty salary and a nice year-end bonus.

Plus, thanks to following some great advice, Kim already had about six months worth of emergency savings stored up. “At my first job out of college [undergrad], I had a great boss and mentor who told me to save in the good times so I could spend in the bad,” she says. Now, with a new job in a new city, and a plan to swiftly pay off her student loan debt, she felt in control. When a start-up recruited her shortly after she joined the investment bank, she made the leap with confidence.

Then, the economy took a hit. “Things seemed like they were going great, and then three months after I joined the start-up, it went out of business,” she says. Kim dialed back her repayment plans—paying only the minimum each month while she frantically looked for a job. The first to hire her turned out to be a flop: An Italian bank that planned to open a branch in California flew her to New York temporarily to handle the expansion, then changed its mind about the new location and let her go.

Rattled, Kim returned to San Francisco and continued living off of her savings. “My big plans for being debt-free within a year were just completely out the window,” she says. “Instead, I became part of the pink slip masses.” But for all the stress that Kim felt about job searching in a flat market, she was equally grateful that she had savings to lean on.

Not all of her peers were so lucky. She watched one friend—unable to afford the city’s high rents without savings—move back in with her parents. Others relocated for whatever job offers came along. “There were tons of people in my circle who had to leave San Francisco and move to places they’d never even consider when they were initially making their career choices,” she says. “But the economy wasn’t what any of us expected when we graduated.”

Kim’s six months of emergency savings allowed her to remain committed to her goal of working at a bank in San Francisco, and nearly six months to the day after losing her job she found another. “It was a skin-of-my-teeth situation, but I managed to make it,” she says. And after earning her first few paychecks, she sat down to map out a new budget. This time, her first step didn’t involve her student loans—it was to rebuild her savings. “I watched my friends get sucked into this awful spiral of financial insecurity,” she says. “My savings were what kept me from getting paralyzed.”

Kim experienced firsthand why saving is so important, and vows to always put money aside for when she’s faced with the unexpected.

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