As developers, we know that backups are important. We backup our computers, databases, servers, and use version control. Everything is backed up for that “awe crap” moment that is inevitable.
This mindset is so engrained into our workflow we don’t give it much thought. It’s just the way it’s done.
Backups shouldn’t end at work. This same methodology should be applied to your money. Having an emergency fund, with money you only use in a true emergency, is vital to life. Just as we plan for failure for our code, life is going to have hard times and it should be planned for.
Dave Ramsey recommends $1,000 as the first step. Then build up to 6 months of income after you pay off debt. Other advisers have differing views, but they all agree you, at least, need $1,000 to $2,000 at a minimum.
In the tech world, we have a lot VC money floating around, lots of startups needing developers and paying top dollar. If you enjoy working in this area, then you need to plan for failure even more. You are trading huge risk for a huge paycheck. Plan accordingly. At minimum save 6-8 months of income for when the company fails.
Personal finance is 80% behavior and 20% head knowledge Dave Ramsey
Developers are some of the smartest people I know and are very analytical, yet some still struggle with debt.
I remember one of my first college courses was on personal finance and for our first project the instructor had us do the simple task of changing the way we put toilet paper on the roll. Apparently, the way it’s put on is a very personal matter and changing to the other way is hard. It made an excellent example of how much of a struggle changing your habits can be. So many people complained about that exercise.
It just proves changing behavior is hard, real hard. But that’s what it takes to change habits.