When I was considering quitting my full-time job to start working as a freelance writer, I got a lot of advice. Some of it was great; some was off the mark. And some was impossible to follow.
The biggest piece of impossible-to-follow advice I got was also the piece that sounded the most sensible: don’t quit your day job without six months’ worth of living expenses in your savings account.
It sounded like great advice. But no matter how hard I tried, I couldn’t save up that much. And I was growing more and more unhappy at my full-time job.
Eventually I did what everyone said not to do. I quit my job with about two months’ savings in my bank account.
The steps I took won't work for everyone. But if you’re holding off doing something important because you don’t have the savings everyone insists you need, maybe it’s worth reconsidering whether you really need that much. After all, you could spend your whole life saving and never have enough.
If you don't have a giant savings account and want to make a big move, here are some alternatives.
Save up monthly expenses—not monthly income
If you currently make $2,500 a month, relax—you don’t need $15,000 in the bank before you step out into the great unknown. You actually need much less.
Add up everything you spend money on in a typical month. Add up your spending for rent, utilities, car payments, student loans, food, going out, and everything else.
Then—here’s the key part—figure out how much of that is non-negotiable, and how much you can do without.
Maybe you make $2,500 a month—but you really only spend about $2,000 a month, and of that, you only need to spend $1,500 a month to get by on a bare-bones budget.
Add up what it would take to keep yourself fed and housed for six months—and see if that’s not a more reasonable goal.
Figure out ways to cut costs
While you’re at it, see how you could cut costs if push came to shove.
Call your cable company and cell phone service and see if you can negotiate down your monthly bill—these companies will often do this, especially if they think you’re on the verge of leaving for a competitor.
Highlight items you can afford now—like going out for lunch; getting a manicure every few weeks; subscribing to Netflix and HBO Go—and have a plan for eliminating those expenses or replacing them with a low-cost alternative if you quit your job.
And think about big savings moves you can make. When I first quit my job to go freelance, I didn’t have much in savings—but I moved from a pricier apartment to a cheaper place with four roommates. This helped keep me afloat.
See also: How to Lower Student Loan Payments.
Make savings automatic
Set up your bank account so some of your current paycheck gets automatically funneled into a savings account.
Or, if you refinanced on your student loan and got a lower monthly rate, have the difference between your new and old monthly payment funneled automatically into your savings.
That way, you can’t forget to save every month.
Quitting your job to do something you love can be scary. But you may not need as much in savings as you think.
Consider it in terms of the absolute minimum you should have saved, and start saving now. Hopefully, you could be in good shape to start your new life sooner rather than later.
Want to save hundreds a month on your student loan payment? See if you're Refi Ready.