Ep 3 - Financially Prepare for Quitting Your Big 4 Job in 5 Steps
In today’s episode, we’ll going to talk about your finances and how to financially prepare for quitting your big 4 job.
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Ok so let’s dive in!
If you’re listening to this episode, that means you are ready to call is quits. But being ready doesn’t necessarily mean that you’re prepared to leave your job.
You may be dreaming of telling your boss that your leaving (queue in the famous half-baked movie scene), but before you tell everyone to FU, FU, you’re cool, I’m out, - it’s so important that you have your finances in order.
I get it, you may be working on another boring project, with a terrible team or are working 100 hours weeks and just need a break- but whatever the case may be, let’s take a step back from how were feeling and get prepared.
Although it is tempting to just quit and have that huge weight lifted off your shoulders, what may be more stressful is trying to figure out how you’re going to pay your bills or having to move back home if you make the move to soon.
So, if you must quit your job in order to job search or just want a break now, here are 5 steps to help you get financially ready to quit your Big 4 job.
Step #1: Know what you spend money on
This is key, you need to track your spending. Even if you weren’t going to leave your job, this is oh so important. You may not realize just how much money you spend on things and when you look it all up, you might be quite surprised.
That $5 latte you get every day? Well, that’s $100 a month, or $1,200 a year. Now if you go to Starbucks, you’re probably spending more than $5 but you get what I’m saying. And $1,200 may seem relatively small compared to your salary but this is just an example.
Think about how much you go out to eat, or if you’re spending on new clothes, gadgets, whatever– everything adds up! And being used to making a big salary, you never had to think about these things but let me tell you, the sooner you do this, the easier it will get.
And I want to caveat this step by saying this is not about saving money, this is all about budgeting and setting expectations on the lifestyle you live.
You all know how to do this. You all are smart – you have to be if you’re working at a Big 4 so you know this isn’t something new. And I stress this because working at a Big 4 long enough, you get comfortable.
You know the money is always coming in. You know you're always going to get a bonus but when switching jobs that’s outside of this world, or if you want to save for a house, etc., it’s time to get real with your finances.
Step #2: Analyze your expenses
When you’re going through your finances, the first thing you want to look at is all of your fixed monthly expenses. This would include your rent or your mortgage/insurance, car payment, utilities, student loans, phone bills, etc.
These are the most important to go through as they are not going away, You can choose to not get your latte everyday but you can’t just decide not to pay your rent. Total that up and keep it to the side.
Then look at how much you are spending on other expenses each month, such as groceries, eating out, going out, purchases, etc.
Also look at those sneaky monthly subscriptions as sometimes we forget about them - I’m taking about Netflix, Hulu, LinkedIn Pro, More apple or Google storage space, iTunes, Spotify, you name it!
Add up everything for the past 3 months to get a good idea of how much you really spend. And see what you can cut out right off the bat.
An App I love to use is Mint. Your bank may offer a similar service to you but Mint will automatically categorize your spending for you and you can set limits for each one. Make sure you’re looking at this weekly, if not more. And I can’t stress this enough, Get in the habit now!
Step 3: Look how much you have saved
And I’m not talking about a 401k or investments as I don’t recommend touching those due to penalties and taxes, but look at what true, liquid savings you have.
Take that number and divide it by all of your expenses. How many months can you go looking for a job without making an income? Maybe not as long as you thought.
Now this is a touchy subject: Some people say you should have a 6-month emergency fund and another 6 months saved for job searching but, in my opinion, not a lot of people just have a year of salary in a regular savings account just sitting around.
If you do, fantastic, if you don’t, lets come up with a real solution as I don’t want this to be the reason you feel stuck. Know what you need and add one a month or two. It’s always better to overestimate how much money you will need then to underestimate.
If you don’t have any savings, then see how you can job search while working.
Step 4: Make changes
So now is the time to really analyze and go through everything and see where you can make cuts without really sacrificing your quality of life.
For example, before I quit my job, I refinanced my student loan payment in half to help with my expenses. I also cut my interest rate in half so it was a win/win for me.
My car lease was also up and I learned it was cheaper for me to uber everywhere than it was to have a car and pay for insurance and gas. See what you can do.
Step 5: Make your plan.
Now that you have a deep understanding of your finances, where your spending money and where you can make cuts, the next step is for you to make your plan. If you know what career or job you want to move to next, then it will be easy to put together a plan.
But if you’re not 100% sure what you want to do next, then it may take more time. What I always tell my clients, the goal here is not just to get another job. The goal is to find a meaningful career.
When I was done with traveling and working crazy hours as a consultant, I went internal thinking it was going to solve all of my problems. But in no time, I was just as unfilled there working crazy hours, now just at home vs on the road.
Be sure to incorporate finding what you really want to do as part of your plan.
Also think about the job search overall. Where are you applying? When? Is your resume up to date. Are you ready for interviews? Do you need to get any certifications? How will you network?
This is all important and relates financially as knowing how long you’ll need to find a new job directly relates to how much money you need if you don’t plan to work.
Now this is what I love to do and it’s my specialty. I help my clients go from finding jobs they never thought were possible, to networking, interviewing, resume and brand building – and I stay all the way till your hired. It’s what I love to do.
If you’re serious about breaking free from the corporate games and finding a career on your terms now, go to Recovering Corpoholics.com to apply now for my signature program.
Plans don’t always work out. Especially with everything going on with the pandemic, things can change at an instant. So be prepared - Is it going back, is it finding part time work, whatever the case may be, have a backup plan ready just in case.
Although I was not fulfilled with the actual work at my job, I was lucky to love the team I worked on and I really loved the company. I made sure when I left, I gave ample notice and left on good terms just in case I needed to go back.
I also came up with a few ways I could make money just in case. So do what you need to do. This is your life we’re talking about.
And that’s how you prepare financially to leave your Big 4 job. As I’ve said earlier, really take the time to be prepared when you are leaving so you are not going from one major stress to another. Having a solid foundation when leaving is critical to ensuring you make it work.
That’s all for this week’s episode, I hope you enjoyed it. Thanks so much for listening and I’ll see you on the next episode.
Stay Inspired and Live Powerfully!
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