Many of us have seen the comics or sitcom TV shows, where the main character has finally had enough and just storms out yelling “I quit!” (or some colorful variation thereof). Hooray for him! we cheer, because we’ve seen how horrible his boss is, or how crazy his coworkers are. Finally he got out of there!
It turns out, this isn’t just a phenomenon on TV or in the comics. In addition to writing, I also am a Pinterest Marketing Manager (just a fancy term to basically I say I manage other blogger’s/company’s Pinterest accounts), and so I spend a lot of time on Pinterest. I can’t tell you how many posts I’ve read that all triumphantly state “I just quit my job!” “Quit my job with no back up plan!” “Quitting my job and pursuing my passion!”
Don’t get me wrong – I think this is great! If you have the resources to quit your job and get going, good for you! But is this really practical for a lot of people?
I say this all because, earlier last week, I quit my job. I did it for a lot of reasons, but one of the biggest is that I make enough with my “side hustle” to replace my full income from my previous job. Regardless of how I felt about my boss, coworkers, or the work that I did, the ability to work from home and not suffer monetarily was the biggest reason I did what I did.
However, this post isn’t one of those “quit your job! Do it! You’ll regret it forever if you don’t!” posts. I didn’t quit my job haphazardly – I planned for 2.5 years to leave. You don’t quite have to engineer your exit the way I did, but rest assured you should, and do, have to plan something. Here’s how to engineer your exit and prepare to quit your job responsibly.
Have a Back Up Plan
If you’re thinking about leaving your job, what’s your back up plan? Don’t listen to Pinterest; you need a back up plan. But it doesn’t have to be hard or complicated! Here’s a few ideas:
- Leaving for a new position in the same industry – probably the easiest thing to do, this is just called “looking for a new job”
- Leaving for a new position in another industry – you’ll likely have to learn new skills to do this, so while you’re working at your current job, acquire your new industry’s skills on your free time and start building connections in that industry
- Working from home/being an entrepreneur – do you already have a viable side hustle? Has your small business idea already proven its viability and made your money?
- A large emergency fund – sure, you can quit your job and not do something else. But make no mistake, you’re relying on your emergency fund as your back up plan
If you notice, all of these plans involve money. Unless you have no bills and live completely off grid, you have to make money or have money to take care of yourself (and your family/pets, if you have those). Don’t even consider giving your two week’s notice if you don’t have enough money (or the ability to earn enough money) to pay all of your bills for several months.
How Much Do You Really Need to Survive?
Don’t get too bare bones when creating your “adios job!” budget, but don’t assume your spending will stay the same. In almost every case, you’ll likely spend less moving from your current job to a new position, even if you stay within your field. Unless you’ve let your work clothes get completely tattered, you shouldn’t even need too many new clothes, even for a new job.
If you’re pursuing your own small business plan (as I am), expect many expenses to decrease (driving to work, lunches out, parking costs, etc.) but others to increase (tools for your business, licensing fees, etc.). Make an informed budget based on your current bills and estimate your future monthly expenses. The end number is the absolute minimum you need to bring in monthly just to break even.
You Still Need an Emergency Fund
Even with a back up plan, a bare bones budget and an estimate of how much you’ll make, if you’re quitting your job without immediately starting another one, you’ll definitely need an emergency fund. This goes double for anyone who wants to be an entrepreneur or freelancer. Unfortunately, the market can be tough, competition fierce, and sometimes clients don’t want to pay on time.
If you’re running on a tight budget, you can’t afford to be late on your rent or car payment, so you’ll always need some type of emergency fund. You don’t necessarily need an emergency fund to last you a whole year, but you’ll want one to see you through several hard months.
A good recommendation is a 6 month emergency fund, and while there are exceptions, I would recommend 6 months at least. Is that number right for everyone? No. Some people will need a year saved up, some only a few months. Save what you and your family feels is the right amount, but always err on the side of having too much saved up rather than too little.
Overall, deciding to quit your job is a very personal decision, but if you want to do it, prepare first. As long as you’ve thought through your decision and have backup plan B (and C, and maybe D…), you should land on your feet. You can (carefully prepare and then) do it!
What recommendations do you have for someone who’s thinking of leaving their job? Any preparation tips you wish you had listened to?
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.