As much as everyone would love to just leave their 9-5 job on a whim, the reality is that is very difficult to do. It’s best to make a plan for quitting your job, so you can be prepared financially.
Step 1: Make a SMART Goal
SMART goals are: Specific, Measurable, Attainable, Realistic, Time-bound
A great example of a SMART goal would be:
“I will build three income streams (selling product x, affiliate marketing, and freelancing) to replace my 9-5 job and be able to quit my job in 6 months.”
A SMART goal is great, but it is just a goal until you actually come up with a plan to achieve the goal.
Step 2: Decide How You Will Make Money
In the goal set above, I will make money through selling a course that I’ve developed, build an affiliate product income stream by promoting products I use and love, and build up my freelancing abilities focusing on writing and blog related help.
Taking on the challenge of building three income streams at once can be a lot so start with just one. Once you start making income from it, continue to build it and slowly start building your second income stream, then the third. Keep building each until you are making enough each month to cover your expenses. How much do you need to make? Check out step 3 to determine this amount.
Step 3: Determine How Much Do You Need to Make
First, you’ll need to determine your minimum amount of expenses (rent, utilities, food, transportation) and try to minimize your expenses. The less money you have to replace, the faster you’ll be able to quit your job.
Second, you need to factor in taxes. At your day job, your taxes are usually taken out of your paycheck automatically. When working for yourself your taxes are your responsibility. Taxes for self-employed will usually range from 25%-40% depending on how much you make and how many business expenses you have.
Third, Make enough to save, since your income may fluctuate month to month, your goal amount should include being able to save each month. This will allow you to have the funds available to help cover the months when your income might dip.
Step 4: Decide on the Time Frame and Milestones
In the goal above the overall time frame set was 6 months. But I’d like to have a couple months of making my required income to ensure I can do it consistently. At the same time, I don’t expect to be able to make that amount of money overnight.
The goal then is to make my needed amount in Month 5 and Month 6. So for Month 1 my income goal is 25% of my total goal amount. Month 2 is 50% of my goal amount and Month 3 is 75% of my goal amount.
Step 5: Hold Yourself Accountable
Set up a timeline with all the milestones you need to reach and by when. Tell people about your goal and your milestones, and commit to sharing your progress with others.
Step 6: Make the Leap, but Don’t Burn Bridges
When you finally quit your job, do it in a respectful way. Give them at least two weeks notice and don’t quit in the middle of a work crisis. You never know when you might need a referral or your old job could turn into an opportunity for freelance work.