How Much Money Should I Save to Leave My Job?
Making the leap to work from home as your own boss can be a little (or a lot!) terrifying. But dedicating your time to the business you want to build will always be worth it.
When I quit my job to work from home, I remember feeling both excited and nervous about whether I could really make this work.
In this episode, I give my three best tips for making the transition to work from home as smooth as possible.
I also dive into the successes and failures of my own story and explain how I saved money before leaving my job.
Are you currently trying to leave your job? Let me know all about it in the comments below.
Hey, Julie here. Today I’m talking about how much money you have saved before you can leave your job.
It’s a really hard question to answer because there’s not just one answer. There are some people who need pressure they need pressure to perform.
Other people are more conservative and they like to have a nice safety net and cushion.
So step one is to know yourself know your personality. How do you perform best?
A great question to ask yourself is look back to when you were in school. When you had a final exam, were you the kind of person who waited until the last minute
and then crammed all night long and then aced your test? Or were you the diligent person who made flashcards seven months in advance and then studied every night for five minutes.
I realize those are two extremes, but depending on where you fall in the spectrum, kind of gives you a clue as to your personality.
If you’re the flashcard type I would say that you need at least three months of savings before you make the jump.
If you’re the guy who crams three hours before, drinks a red bull, and then aces his test I would say that you definitely work best under pressure
and it might be in your best interest to jump before you’re completely ready because that environment will help you rise to the occasion. So that’s my first piece of advice.
Second, prepare to leave your job by reducing expenses and this doesn’t have to be something that you do permanently so you know I know nobody likes to reduce expenses
it feels sad you know, and you have to cut your cable and your Netflix and buy ramen noodles instead of Progresso Soup.
But if you think of it as a temporary situation in which to make the jump then you can do it. So look at your expenses. Figure out everything that you can get rid of for three to six month.
Pare down your lifestyle so that when you do make the jump even just a thousand dollars less a month will give you a little bit more breathing room.
Next, my advice would be to moonlight until you can get some savings ready to go.
The reason why this is so important is because there are things that you lose when you walk out of a 9:00 to 5:00
that you need to make up in a business things like health insurance, 401k.
And so if you have some extra money saved, this allows you to start budgeting correctly from the get-go in your business.
Most of us start a business and we take our expenses and then we just take all the profit and then we stick it in our bank account and we forget about things like business savings, business investments. Things like health insurance and life insurance.
So if you have an extra cushion ready to go it gives you a little bit more breathing room.
So here’s how I did it.
What I did was I worked about 32 hours a week. So it was just about full-time. And then I moonlighted my job and I tried to save everything that I was making in my business.
The good news is that once in a while I took some of that savings to reinvest, to try to build more momentum in my business knowing that my job was running out soon.
And my job really was. It was a six-month temporary job. So I had six months to give my business as much momentum as possible.
So I saved all that money invested a bunch.
And then when my job ended I had savings to live on for three months until my business was matching what I had made. Luckily it did. But I want to tell you that
there was a moment where I faltered. Where I got nervous. Where I thought oh shoot I don’t know if I can do this. And so I went looking for a part-time job thinking that that would make the transition easier for me.
I got that part-time job and decided to work for hours in the morning at the job and four hours in the afternoon on my business. And after two weeks I quit.
And I quit because I realized that the prime time of my energy was being dedicated to a different business than the one I wanted to build.
And so I quit. And I never looked back and in that environment and under that pressure, I performed and my business grew.
I know the best conversations happen after the camera stops rolling.
So if you’re trying to save enough money to leave your job, leave me a comment below and I’ll get back to you soon.
For more videos like this one go to my website at Juliechenell.com.