3 signs you can't afford to quit your job (yet)

 


Quitting your job could open up new opportunities, but it's not going to happen without some financial sacrifices. You're giving up your stable income, and potential benefits, and you have to be well-prepared for those changes before handing in your notice.

Here are three obvious signs you're not financially ready to quit your job.

1. You don't have a full emergency fund

If you don't have an emergency fund, you're not ready to leave work. 

An emergency fund is a savings account filled with three to six months' worth of expenses. You should keep your emergency fund in cash, in a high-yield savings account, to keep it easily accessible. 

Emergency funds can help you to stay afloat if you're not able to find work, or if you need to take some time off before starting a new role. 

An emergency fund is a must-have for anyone considering leaving work. Saving as much as possible can help you feel more secure and prepared for your transition.

2. You don't know where your money goes each month

Whether you want to retire early and become work-optional, leave full-time work for freelancing, or just take some time off before finding a new job, you'll need to make sure you have a good understanding of where your money goes monthly. 

One way to keep track of this is to start tracking your spending and make a budget. Keeping a budget is going to be essential for anyone who wants to quit their job. You'll need to know exactly where your money goes to know how much money you need to have to make ends meet each month and to be able to accurately fill up your emergency fund. 

Make a list of your expenses and spending, and figure out which expenses are essential. Then, you can start to see how much extra you're spending each month, where you could cut back in an emergency, and where your money is going.

3. You're living beyond your means

If you're constantly taking on credit card debt to survive, and can't afford to save for your long-term goals like retirement, you might be living beyond your means. 

You'll need to be living within or below your means — living an affordable life relative to your income — in order to stay within your budget and leave work. Before quitting a job, check in on your budget and make sure that you'll still be able to afford your lifestyle without that income.

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