Entrepreneurship is steadily on the rise, and it isn’t slowing down anytime soon. People are quitting their 9 to 5s and giving up corporate life for good. But what do you do when you’re ready to quit your job? How do you get everything in order to ensure that you don’t struggle while you work to get your business off the ground?
Jumping into the unknown waters of entrepreneurship isn’t something to take lightly. The best thing to do is to make a check list of everything that you you need and have at least six months of living expenses set aside. Here are some tips to quit your job the right way so that you can survive while you get your business up and running.
1. Track all living expenses & create a budget
Before you give your job a resignation letter, be sure to know what your monthly budget is. This will allow you to track your spending and identify where money is going. You should prepare yourself for the drop in income after you quit your job, and if you have a monthly budget, you’ll know what you can afford to spend every month.
This includes your income, bills, food, entertainment, insurance, gas, and any other personal expenses. You should know where every penny is going each week.
2. Verify unused vacation time, bonus money, etc.
Check to see how much vacation you haven’t used yet and if it is owed. Also, make sure you know if the money can be used or paid out. You should also be aware of when bonuses and stock options, and other perks will be available or paid out.
If you hold stock options that allow for you to purchase shares at a discounted price, you should find out how long it takes to cash them in–this is usually three months after your last day. Don’t leave any extra money on the table before you go.
3. Have an insurance plan
It may be a good idea to make doctor and dentist appointments if you have been putting them off. Next, find out when your coverage ends. It may be on your last day or for the remainder of the month.
Next, carefully review all options. There are options for you if you don’t plan to keep your employer-provided insurance for a while. COBRA, which is a continuation plan offered by your employer for up to 18 months, can be costly as you will generally have to pay your employer’s premium.
If you’re married or have access to an employer-provided health plan, you should be able to enroll in a special enrollment period for your spouse’s plan–this typically applies regardless of whether you lose coverage.
4. Get some professional references
Consider who you might ask for a job reference before you quit your job. Ask your managers and coworkers for permission to use them to refer you. Also, ask how they prefer to be reached and to be a reference on LinkedIn–and then return the favor.
5. Start freelancing today for extra cash
You may have skills that you could use as a freelancer. You have many options to make money online, from entry-level jobs that anyone can do to corporate consulting work.
Sign up to freelance on the following sites:
Here are some of the most common entry-level and middle-level freelance work from home jobs:
- Data administration
- Virtual assistant
- Social media manager
- Virtual office manager
- Content writer/Copywriter
6. Clear out your closet
Need extra cash asap? Try selling clothes, shoes, and accessories online if you don’t want to wear them anymore. Selling clothes online doesn’t require you to have designer clothing. You can make a profit selling gently worn, mainstream brands with the right approach. And while you’re at it, take a look in the garage, storage rooms, attic, basement, in any of the areas where you may have furniture, material, clothes, or of the items that you can sell for profit.
Best platforms to sell things online:
- Facebook Marketplace
7. Minimize those bank and credit card fees
Make sure to pay off any bills before you quit your job. When you add interest and late fees to your credit card balances, bills quickly become more costly.
These extra costs can reduce any savings you had planned. You could also be charged extra for dropping below a minimum bank account balance, activating overdraft protection, or using ATMs, not in your bank’s network. Also, pay off your utility bills to have a clean slate when you quit.
8. Reduce home living expenses
Your housing budget should not exceed 30% of your net income. For homeowners, this number includes homeowner’s insurance and property tax. If you’re planning to quit your job and have a high mortgage or rent, you may want to move to a less expensive place to get your business off the ground. Living expenses are typically the most expensive thing in monthly budget, so be sure to account for this.
9. Reduce miscellaneous expenses
Try to find different ways of reducing your monthly expenditure every month. This means taking a super close look in your budget down to the penny to see you at your every cent is going. Find ways to cut down on your budget regarding food, leisure, cleaning, and auto-related costs.
So instead of going to Starbucks every day, invest in a French Press. Reduce gym costs and get free weights, a bike, and/or dance lessons. Find things to buy in bulk (get a SamsClub or Costco membership) and use coupon apps to get discounts.
Also, think about any other personal items that you may need for the next 6 months. Even small things like toothpaste, deodorant, hair products, and toilet paper should be considered–again, consider getting these items from a discount club such as Costco or Sam’s Club.
10. Plan major purchases
Consider any new major purchases that you may need in the future. Is your car on its last leg? Or perhaps your laptop is running slow and needs to be replaced in the next few months. Is your bed sinking in the middle? Try to get any big deals out of the way while you’re still employed. This way you can have more emergency funds to set aside.
11. Change your cell phone plan
You can save money on your phone bill by changing your plan. But it is not the only way. You could save nearly $100 per line by getting rid of your insurance. Instead of keeping the insurance, consider getting an Otter case for your cell phone to reduce the likelihood that it breaks when you drop it. Also, consider lowering your plan to the minimal number of minutes and usage needed each month.
12. Monitor your utility bills
You can save hundreds of dollars annually by making small and big changes to your energy use. Leave your big appliances unplugged or use a Smart power strip. Try setting your air conditioner or furnace on an auto setting coming to avoid changes the temperature throughout the day–which can cause higher bills.
Think about how much time do you spend in the shower, how much water do you use to wash the dishes, how long it takes you to wash your car with the water hose– try to find ways to reduce this amount to lower your water bill.
13. Reduce your student loan payments
You can temporarily reduce your monthly student loan payments with income-driven repayment plans. Reach out to your loan provider before you quit your job to see the minimum amount you can pay each month while you build your business.
14. Cancel unneeded subscriptions
You should also uncheck auto-renew on subscriptions you don’t use often, such as streaming services or subscription boxes. This includes any television, music, game, or other streaming services that you may have.
Summing Things Up
Surviving unemployment while you build your business is simply a matter of planning ahead. So the wrap things up, be sure to reduce your expenses as much as possible, and if you can, try to get a freelancer part-time gig so you can have some money coming in while you build your empire!