Even if you have the world’s most amazing job (which, let’s be real, you don’t), you’ve probably fantasized about quitting this year. People are doing it in record numbers! What better time to throw a big gap on your résumé and take a monthslong road trip to crash with random acquaintances so you can avoid rent? Life is short, and burnout is real — even Prince Harry says so.
Bills, however, are also real. And one thing that’s more stressful than having a job you hate is running out of money with no job at all (which then forces you into another job you hate).
Ideally, you’d line up a new job before you quit your current one. But careers aren’t always linear like that. Maybe you’re quitting to go freelance, start a business, spend long-overdue time with family, or tend to your mental health. Maybe you just need a break before you figure out your next move. Lots of people will tell you that this is a bad and irresponsible idea, and it’s certainly not the safest thing to do from a financial perspective. But that doesn’t mean you can’t or shouldn’t try it. You just need a plan — and some cash saved up. Below, a step-by-step guide to plotting your exit.
Step 1: Do a financial self-evaluation.
Before you make any moves, look at your numbers. Financial therapist Amanda Clayman calls this the “information gathering phase”: Take stock of your current salary, your fixed expenses like rent and student-loan bills, and how much savings you have. Your objective is to know all the resources at your disposal and get ahead of any surprises. How much does your health insurance cost, and what would it be if you have to buy your own policy after you quit? Is your credit score decent? What’s your debt situation? What expenses can you trim? When is your lease up, and could you wiggle out early if you had to? This isn’t meant to be a shaming exercise — you’re just taking stock of what’s within your control, financially, and what isn’t.
While you’re at it, revisit the benefits that your job might be providing, including paid time off, 401(k) matching programs, and other perks. These are things you want to take advantage of before you quit, says Corbin Blackwell, a certified financial planner at Betterment. “When you leave a job, you’re not just giving up your salary,” she points out. “You might also be giving up things that you don’t consider part of your compensation, like subsidized health care or parental leave, free coffee or snacks, or commuter benefits.” Those aren’t reasons to stay at a terrible workplace, obviously. But you’ll need to factor them into your budget when they’re no longer available. (And use them while you’ve still got them, as much as you can.)
Step 2: Make a new budget.
If you cut back to the bare-bones minimum, how much money would you need to get by? This is what financial educator Tiffany Aliche calls “your noodle budget” — the amount you could live on if you got rid of all extras. Hopefully you won’t need to actually do this, but calculating that number and knowing that you could make it work is a liberating and useful exercise.
Alternatively, you could try to live within that budget, or a version of it, for a defined period of time if you need to save up more cash before you quit. I’m not saying it’ll be fun, but a bigger cushion will always give you more peace of mind.
Finally, figure out what your budget will look like when you do quit. Doing that math will give you a goal for how much to save to forgo paychecks for a while, and how far that savings will take you.
Step 3: Consider your options.
Chances are, you’ve already looked for new jobs or at least put out some feelers. But it never hurts to think outside the box. Could you get your current job to lay you off, so that you could get unemployment benefits? Could you move in with a relative for a few months? Do you have a plan B for earning money if you really need it?
Also, pump your network. Do you know anyone who recently quit their job and would tell you about the steps they took to do so? Sometimes bouncing ideas off a friend or acquaintance can bring new options to light or make connections that you hadn’t previously considered. (For example, one of my friends house-sat for various people after she quit her job and gave up her lease last year; another took gigs on TaskRabbit.)
Meanwhile, think about why you want to quit — and what you’re hoping to do next. “If you have no idea what you want to do after you leave your job, that can mean that your unemployment period is a lot longer,” says Blackwell. “Ideally, you want to figure that out while you’re still working and making an income.”
You may feel like your current job demands so much that you don’t have the time or bandwidth to job-hunt. (I’ve been there, and it’s exhausting.) There’s no perfect solution to this, but whenever I feel like I can’t possibly fit one more thing into my day or my brain, I think about what Robin Arzón, a former corporate lawyer who’s now the vice-president of fitness programming at Peloton, once told me about finding time to switch careers when she was working 80-hour weeks at a law firm. She called it the “ten-minute rule”: She would block out ten minutes a day to research her next move, whether it involved Googling something, drafting an email, or making a phone call. Set a timer and try it — I’ve found that it helps when I’m tackling anything daunting.
Step 4: Try to save up at least three extra months’ worth of living expenses.
I want to be clear: This part is hard, and downright impossible for some people who simply cannot afford to put money away regularly. But it’s important to be realistic — quitting requires savings. The average length of unemployment in the U.S. right now is about five months, according to the latest report from the Bureau of Labor Statistics. That may seem like an incredibly long time, especially if you have some promising job leads. But remember that it can take ages to submit your résumé, go through the interview process, get an actual job offer, negotiate your salary, and sort out your start date. You’ll be in a stronger position to do all of those things effectively (and be picky about the next job you take) if you have enough money to support yourself in the meantime.
How much is enough? It’s hard to say, but Blackwell recommends saving up at least three months’ worth of living expenses, on top of a healthy emergency fund (which is typically defined as at least three to six months’ worth of living expenses), before you quit. “Ideally, you won’t have to drain your emergency fund, since quitting your job isn’t necessarily an emergency — it’s something you can plan for,” she says. (I should note here that most Americans do not have an emergency fund, and the idea of hoarding three to six months’ worth of cash might sound insane, especially if you’re only a few years into your career. If that’s the case, I would lean hard into your plan-B options — a cheaper living situation, a stopgap job, or hanging onto your current position for a bit longer to save as much as you can.)
Of course, no one wants to stick it out in a miserable workplace because they can’t afford to leave. And ultimately, I can’t tell you when or if you should resign — sometimes there’s no right answer. Toeing the line between your mental and financial health can be impossible, and I wish no one had to make those trade-offs (especially since those two things are related). But it can be powerful to see your job as a means to an end — a source of paychecks that you can save up until you have enough financial freedom to leave on your own terms and find something better.
And that doesn’t stop after you quit. Shoring up your savings will give you more agency, enable you to set boundaries, and avoid crappy jobs in the future as well as the present. For that reason, these steps are useful even if you don’t plan to leave your job anytime soon.