One of the first things that you, I, or anyone else will likely worry about when contemplating quitting our jobs is the financial aspect of doing so. We’ll worry about whether we’ll be able to make enough money, on our own, to pay our bills. We’ll worry about whether that income, if it is enough, will be steady. We’ll worry about how we’ll make that money, and whether the income streams that we have are going to be robust enough to scale to a point where we can securely quit our jobs and work for ourselves. I know they were things that were foremost on my mind when I was deciding whether I should quit my job or not. In the end, I decided that it was time to let go of some of my fears and take the leap towards self-employment. Taking that leap was not an easy thing to do. Here’s how I was able to do it, and how you can too.
Get Your Finances in Order
Sounds simple, doesn’t it? It’s not. If it were, there would be a lot of personal finance bloggers who would be blogging about something else today, myself included. Despite what some people believe, personal finance isn’t a simple thing to master. I know I haven’t done it yet. I’m a little bit further along the curve than some, and further behind than others.
When I first started blogging about personal finance, it was during a very dark time in my financial life. My wife and I had been wondering if we were going to have to declare bankruptcy, and paying our bills each month was a juggling act. Somewhere in that time period, I discovered other personal finance blogs, and through them, Dave Ramsey. I ordered, and read Ramsey’s book, The Total Money Makeover.
It was the beginning of a financial turnaround for us. Ramsey’s book 
gave us the financial know-how and direction to turn our finances around. With the help of that book, and the amazing community of personal finance blogs, our finances became something that was far less of a worry for us. That was over five years ago now. If we hadn’t had that turnaround, and gotten our finances in order, there is no way that I would have been able to do what I did. We have been aggressively paying down our debt and refusing new debt whenever possible.
When I Quit My Job
If you’re a regular reader here, you are familiar with the story leading up to the day I quit my job. We had become a bit lax in our financial governance, were about to buy a new house, and were suffering from a severe case of lifestyle creep. Our lifestyle had grown along with our incomes. We still were attempting to pay down our debt, and we were still avoiding new debt in most places, but we could have been doing so much more than we were. That’s our fault. We got comfortable with our income, got comfortable with the luxuries that we had let creep into our lives, and we lost sight of our end goals. The day that I decided to quit my job, we took all that back and started actively working towards our goals again.
In a way, quitting has been a blessing. It’s given us a renewed perspective on what we need, how much we need, and what we can do without. If you think you are going to quit your job or just want to quit your job, you can’t do it without having a firm grasp on your finances, and truly having them in order.
Cut Your Costs
Part of getting your finances in order, and a large part of being able to make it without the once steady income that you made at your job, is cutting your costs to a level that is sustainable, given your new income level. I went from a mid-5-figure-a-year salary with steady paychecks every two weeks to a part-time job that I get 20 hours a week at and an inconsistent online income. In the time since I quit, we’ve cut our costs dramatically. When I was still employed, we were spending nearly $6,000 a month. That includes debt repayment but is still a pretty large number. Now, we’ve cut our costs by about $2,000. If you had asked me in October of last year if we could do that, I would have said you were nuts. We found a way to do it and so can you. It’s all a matter of motivation. Do you have the motivation to cut costs so that you can give your dream the wings it needs?
Work Your Ass Off
Have your finances in order. Cut all the costs you can. None of that will amount to a hill of beans unless you are ready and willing to work your ass off. It’s something that I still struggle with. Every job you’ve ever had has conditioned you to expect to have someone telling you what you had to do. Everywhere you’ve ever worked, you’ve had a supervisor looking over your shoulder giving you the tasks that you were to work on, setting your yearly goals for you, and keeping you motivated to do them with the threat of unemployment. Once you quit your job, and decide to work for yourself, that all ends. It sounds freeing, doesn’t it? It is. And, it isn’t. You have to become your own supervisor. Your only motivator is to make your choice valid and make enough money to live off of. You aren’t going to get fired for spending 4 hours a day on Facebook anymore; You’re going to go broke. Scary, no?
As scary as that may sound, it is freeing. You’ll have the freedom to make the choice to work your ass off. It’s something that, even now, almost 3 months later, I still struggle with. There have been days where I haven’t done a damn thing. And, I’ve regretted each one of them. Each day spend screwing off has cost me potential money. If I don’t get anything written for this site or any of my other sites, it’s one less article that you’ll enjoy reading (I hope), and one less well-written article to attract new readers and new advertisers. Because of the long-lasting ability of any article that I write, the repercussions of a missed article can be exponential. What you choose to do, may not be writing content for websites, but you’ll likely see the same trend. And you’ll likely struggle to keep yourself on task without a supervisor. I’m learning, and you will too, that you have to provide that supervisory oversight for your new venture. It’s no longer a matter of keeping your job, but of keeping your bills paid, your heat on, and the foreclosure agent from your front door. Work your ass off.
Have a Little Hope (And Faith)
None of what I’ve said is the most important part of this. Without hope, you are destined to fail. You have to have hope that you will succeed. You have to have hope that you’ll overcome any mistakes you make. You have to have hope that you will prevail and make your venture grow roots and blossom. You have to have faith in yourself, that you can do the things you need to do to make your venture a success. Without hope and faith, you will fail. I can tell you, firsthand, that there are going to be days when both your hope and your faith will falter. There will be days that you feel like you’ve started on the trail to scale Mt. Everest. The air is getting thin, and all you want to do is, stop, turn around, and head back to the comfy, warm, job you had before. But, like anyone who has attempted to climb that mountain, you have to keep climbing. The trail may change directions from time to time, but the goal is the same. Find ways to renew your hope through community, family, and friends. I’m lucky enough to have a very supportive family, friends, and the community of personal finance bloggers to help me keep that hope and keep my faith. You can find that too.
Get your finances in order, dramatically cut your costs, work your ass off, and keep your hope and faith alive. Reach your summit.
photo credit: ilkerender
I started this blog to share what I know and what I was learning about personal finance. Along the way I’ve met and found many blogging friends. Please feel free to connect with me on the Beating Broke accounts: Twitter and Facebook.
You can also connect with me personally at Novelnaut, Thatedeguy, Shane Ede, and my personal Twitter.
How do you overcome being a sap and not wanting to put others in a jam by quitting? That’s been my biggest enemy, as I’ve passed on better opportunities dues to my sense of responsibility to the current employer. Especially now, when it’s the middle of tax season and one of the bosses is out following his brain tumor removal, it is impossible to get out. Even after April is over, I can’t see it being any easier from a conscience standpoint.
Well, that’s the trick, Eric. I’m not saying you should walk out on everybody, but sometimes you have to. There were several people in my department who I knew would be negatively affected by my leaving. It was unfortunate, but something I had to do. It’s not an easy choice, to be sure, but weigh the decision carefully.
I’ve been self-employed for over a year now but it wasn’t by plan. I quit a seasonal job last year and was going to find a new job but then I started making enough money blogging to pay the bills so I never got around to getting a new job. I’m sure planning the transition would be a better idea though.
Can you do some regular updates on how things are going, what challenges you’ve faced that maybe you weren’t counting on, and any other differences from what you had thought? Good luck, I would like to see more as time goes on!
Inspiring. The things you have mentioned are actually part of our long term plan. We want to retire early which entails a lot of these same steps. Success comes down to having a plan.
“You aren’t going to get fired for spending 4 hours a day on Facebook anymore; You’re going to go broke. Scary, no?”
So true. Thanks for sharing this message; this is definitely going in the roundup.
really like this post bb – didnt know about your finances from when you started, but really feel like I can relate. My debt repayment has been puttering along and it seems like i’ve been inflating my lifestyle lately, but I cant find where it is!
@Jeff To be honest, I knew that there was some lifestyle creep going on before-hand as well. But, like you, I couldn’t find it. There’s nothing like a major income related event like this to help you root those things out!
@Andy If I could have planned the transition, that’s what I would have done. Seasonal work, transitioning to online work during the off season with the seasonal work ready to go back to if it doesn’t work out is ideal. Glad it worked out for the best for you!
@moneybeagle I will try to do more updates as time goes on. I’ve already got a few other ideas for posts from some of the conversation that’s been going on around here lately!
@Miss T Keeping to that plan is even more important, I’m finding out. What was once a small hiccup seems much larger when you’re counting on it for income.
@FG I’d be honored to be included!
What you right is so true. It is so much easier to motivate myself now that I work for myself. In fact, I feel guilty too if I don’t “go to work” even though I don’t have to. The best part though is being there for my daughter whenever she needs me. Priceless.
Congrats on making such a big decision, I really hope things continue to work out. It would be overwhelming to do that but I am sure it is doable. My wife and I talked about one day one of us staying home if we had kids, I’m sure our spending habits would have to change dramatically.
BB, definitely best of fortune and luck on your decision. One thing I will do is cut my costs to make it more inline with my decline in income, even though I don’t have to. Just doesn’t feel right not to.
How is Media.net treating you? It’s picked up for me, as they aid they made improvements.
Sam
The one thing that hits home is how my wife and I over the years increased our living as we increased our pay. I remember thinking in college that 30-40k would be great. As we slowly crept over those mark we went from riding buses to buying cars and then more expensive cars etc. Now I have gone back to what no car payments and spending less and creating less debt. Best of luck have faith!
That’s great! I quit my job more than five years ago to do freelancing work as well as work on my projects online. I’ve been able to invest so much time into my side projects that I have been able to save a ton of money. Now that I have saved a lot, I’ve been dabbling in real estate building a portfolio (it’s always best to have more eggs in the basket.)
What I tell people when they want to quit their job is just make sure that you have at least one year in emergency expenses, a worst case scenario as well as a set schedule.
I always just told myself that even if everything fails, I have the energy to go back to work. It’s not hard to make money, but people (especially the internet) tend to be negative about everything, making it hard to become motivated or bring you down.
I say good for you and best of luck with your future endeavors!
Glad to hear you are coping well with self employment.
I agree with pretty much everything you said. I’m looking forward to setting my own schedule and working for myself too. We’ll see if it works out.
You have a great story here. It is always exciting to read about the amazing possibilities that are out there if you are dedicated and work hard. Good luck and always be in touch if you need a blogger buddy to chat with.
The lifestyle creep is something that we have been actively trying to fight. I think we have been somewhat successful, but with our first child expected soon the last few months have been quite expensive. This is even though we have also borrowed and bought a lot of used stuff from friends and family. Its encouraging to see your post in this.
Thanks for the nice post. I too, am a Dave Ramsey follower and started getting into personal finance about three years ago. Getting on his plan and getting motivated has changed my life. I do want to pursue my own business someday and agree that I will need to be financially fit in order to do it. I’ll also need to work my butt off, but I figure that is a given just to get by in this world today. It’s funny how when you are passionate about what you’re doing, it doesn’t feel like work, even if your pouring your blood and sweat into it. That’s the excited part of looking to the future. I have hope and a lot of it! Thanks again!
I quit my day job last November and have loved life since. Money is tight and I might have to get a part-time job while my side-hustles can support us full-time, but I don’t regret my decision one bit. Having a supporting wife helps!
Brent, Stay At Home Men Of The World, UNITE!
@Brent I had to get a part-time job to supplement as well. It’s not ideal, but it helps keep the income steady, and it’s a heck of a lot more enjoyable than what I was doing. No Regrets!
@everyone Thanks so much for all your kind words and support. This wouldn’t be possible without people like you that come and hang out here once in a while!
Congratulations on your accomplishments so far. Cutting costs is very difficult. Saying goodbye to the unnecessary luxuries we have grown so attached to… I feel a tear coming.
I just found this site through yakezie…I love what I am seeing so far. Keep up the good work and if you get bored. Check out my site I launched it on Monday…lol I know kinda new but you have to start somewhere.
This is great advice. When I was deciding to quit my corporate job, I cut out all of the unnecessary expenses and calculated my new income. Between the two, I was able to do it.
Great story. Congrats on quitting!
“You aren’t going to get fired for spending 4 hours a day on Facebook anymore; You’re going to go broke. Scary, no?”
This really hit home for me. I can’t goof off any more because the online income I make isn’t side income anymore, it’s part of my main income! I really have to focus and hustle because if I don’t I’ll be broke. thanks for the great reminder.