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When To Quit Your Job – How Much Money Do You Need?

Everyone has probably thought of it. Whether it is easing into early retirement, starting your own business, or earning passive income, people want to live the good life. Quitting your job and seeking better opportunities is a perennial topic but it is more relevant today than ever before. So many people are either working part-time, unemployed, or fearing that they will be part of the next batch of lay-offs. As a result the real unemployment rate has only gone higher and higher.

The situation is a lot worse in the United States because people don’t want to lose their group health insurance. But even if you decide to get your own insurance, the main question is how much do you need to survive without your job? Would you also buy life insurance if were not provided? This is one of the main factors that keep people stuck to where they are.

What Kind of Escape do you want?

Determine what kind of escape you want – whether it is a change in career, semi-retirement, or retirement and then plan accordingly. Also, try to gauge your current standard of living. A civil servant might be happy to live on his pension and may not need anything else. But a highly-paid executive may not be happy with this set-up. Basically, the pile of cash you need depends on your circumstance and preference.

Are You Willing to Relocate?

If you are shifting from one job to another, some people would recommend having at least six months worth of savings. However, if you’re looking to start your own business, it is a different matter altogether. For people who had been there, they recommend at least two years worth of savings – in a very accessible, liquid form. The good news is relocating from one area to another can stretch your dollar significantly.

How Far with Your Dollars Stretch over the Long Term?

There are a lot of factors that can affect the value of your money today. Even a person investing conservatively should earn at least 3 percent annually to cover inflation. Anyone who is seriously considering an escape should take a look at their cash flow.

Will You Be Willing to Cut Back – Significantly?

It is a fact that middle-class households usually have budgets that can be dramatically cut. But people see their neighbor’s luxury as their necessity and this is where the problems occur. Use the zero-based accounting to determine how much you can cut back each month.

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Category: Personal Finance

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3 Responses

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