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How to get your money in order before quitting your job
It’s the ultimate dream for everyone; the process of quitting the rat race and leaving the 9-5 days long behind you. Unfortunately, it’s far from easy (or everyone would be doing it).
The good news is that once you do become secure in your self-employed position, there really is no looking back. Very few people make a return to the employed, 9-5 role though some might consider part time work in retirement.
Today’s post is all about helping you get to that stage. There’s no doubt that you do have a lot of financial considerations to think about before you make the plunge and to give you an idea on how to prepare, let’s take a look at some steps in-detail.
It’s not just about day-to-day expenses
Let’s firstly remove one of the biggest misconceptions; it’s not just about day-to-day expenses. In other words, while you obviously need to calculate how much you will need for food, shelter and all of the other basic amenities, there are other costs that so many people forget about.
At this point, we’re not talking about a new laptop or any other “fancy” purchase. Instead, it’s all about necessities; things like funeral care, or even elderly care. Most people who decide to quit their job fall into the middle-age bracket, meaning that both of these issues need to be taken into consideration.
It’s not morbid in the slightest; it’s utterly practical.
What can you live without?
As you embark on your mammoth saving mission, it’s time to determine just what you can afford to live without. Unfortunately, now is not the time to think that you are entitled to all of the luxuries you have had during your working life. Sure, you’re not kissing goodbye to these permanently, but in the art of preserving your future you really need to ask yourself twice if you need to keep them.
When we talk about these luxuries, we’re referring to magazine subscriptions, gym memberships and other re-occurring costs that all add up. Technically, you don’t need these in your life. If might be hard to remove them, but at the same time it’s something that can accelerate your saving plan and also ensure that you don’t need to live on as much when you do hand your notice in.
How much do you need to save?
The last sentence leads perfectly onto this next point. How much do you really need to save? Of course, this is going to relate to a lot of your future plans, but the general suggestions dictate that you should be aiming for around six months’ worth of living expenses. This is why it is so important to cut out the “unnecessary” expenses, as these can have such a profuse effect on the overall picture.
It goes without saying that if you are looking to travel for the next 18 months, this figure is going to be revised. It’s merely a general rule, which tends to work for most people who fall into this category.
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