“I want to quit my job. What do I do to quit my job?”
Does this sound like you? Do you want to quit your job?
Before you do quit your job and become free, you need to do one important thing. What’s the most important step when it comes to quitting a job? You need to save up some money. As exciting as it is to quit a job, I believe that you need to be realistic about it. Let’s look at how to make this happen…
“I learned many great lessons from my father, not the least of which, was that you can fail at what you don’t want so you might as well take a chance on doing what you love.” — Jim Carrey
If you want to quit your job in the near future, then congratulations to you! You’re about to take a big step in life. This is a step that many contemplate but never end up going all the way with it. Hopefully you’ve thought about this decision and all of the details that surround it. You also hopefully contacted your close friends and family members to gather their thoughts on this decision so that you have a strong support network around you.
There’s one thing that you have to accept about quitting a job.
You need to save some money before you quit your job. There’s no way around this. Leaving a job that you don’t like sounds tempting until you realize that the bills will still be showing up in the mail.
[If you’re looking for motivation right now, then check out how Donovan quit his job to travel through Europe.]
“I want to quit my job.” Do this first.
You have to chip away at your debt so that you don’t have to stress about massive debt payments.
If you have any debt (student loans, home, auto) you’re still going to have to make your debt payments. If you can’t make your debt payments then you’ll get yourself into some serious trouble. You might get forced into bankruptcy or you might get stuck with paying more interest on your debt.
As you plan on quitting your job you need to take your current debt into consideration. Look into resources such as LetMeBank for more information on the best credit cards and bank accounts.
How much do you owe? Write down all of your debts.
What are your fixed expenses like? What about your variable expenses? Can you start cutting back right now?
Now that you plan on quitting your job, you might have to cut back on some of your expenses. The expenses that are remaining are going to have to be paid for somehow. You need to account for current expenses and any new potential expenses that might come into the picture.
The good news is that when you figure out your expenses, you can make a plan for how you’re going to pay your bills and survive. You just need to know how much money you have going out every month.
You should have at least 3-6 months worth of expenses saved before you quit a job to buy yourself that time.
How will you handle the lean times where you’re not making any money? Do you have a game plan?
If you don’t have any concrete plans for work then you’re definitely going to experience some lean times. If you plan on starting your own business, you’ll also suffer with lean times. There’s nothing wrong with business cycles, it’s just a matter of being able to handle them. Having money saved up will help you deal with the lean times in your post-9-to-5-life.
When you have a steady job, you get paid every two weeks. You know that this money will come in. When you work for yourself, there’s nothing for certain.
Anxiety will kick in at some point and you’ll feel like you’re going to be homeless because you have no money. It happens to me all of the time. I get hit with a new expense or I spend money on my business and I feel like I’m going to fail and be on the streets. Call it an emergency fund or an anxiety fund, but it helps to have some extra money set aside for life.
As you can tell I don’t believe in cheerleading and throwing out “feel good” advice about quitting your job. I think that if you want to leave your current work that it can be the best decision of your life. You just need to plan for this move financially. If you don’t plan for this big move you’re going to end up losing your mind trying to deal with the harsh realities of self-employment.
Alright so you know why you need to save up some money before you leave your current job. Now let’s look at the mega question here…
How much money should I save before I quit my job?
What’s the right number?
There’s many arbitrary numbers that have been thrown out there. It all really depends on the amount that you’ll be comfortable with and what your plans are. I don’t want to beat around the bush so I’ll give a straight up answer.
I think that you should have at least three months worth of money needed saved up before you quit your job.
How much money is needed to quit your job?
Add up your expenses (debt, fixed, variable) for one month and multiply it by 3.
Why three months?
At this point you’ll realize if the self-employed life is for you or if you thrive better in a traditional workplace environment. You’ll also be able to test out your business ideas, try to see how productive you really are during the day, and determine if you miss your co-workers. When your savings dry up after three months you can decide what the next step will be for you.
It’s important to have money saved when you quit your job so that you can figure out what to do next.
If you start your own business, the money won’t come in right away. Ideally, you’ll plan your exit strategy for quitting your job at least 6 months out. You can start saving and building up your income during this time.
“If you’ve got an idea, start today. There’s no better time than now to get going. That doesn’t mean quit your job and jump into your idea 100 percent from day one, but there’s always small progress that can be made to start the movement.” — Kevin Systrom
Have you quit your job recently? What would you recommend someone does before quitting their job?