Money Gives You Options
Let's be honest, money is a basic need to survive. So, you can't make a big leap if you're terrified about covering your basic expenses. Increase this stress tenfold if you’re single, have the only income in your partnership, and/or are responsible for additional family members (parents, kids, pets, etc).
So, let's not pretend money isn’t an important factor in change. Let's plan for it!
How to Plan for It: Figure out what you have and what you need
Many people I talk to have a general sense of their take-home income, expenses, and spending. But when I ask more detailed questions about their finances, they actually aren't sure.
To get this figured out *in detail*, here are a few questions to ask yourself:
How much money do you have and what of it is liquid vs in investments with penalties for withdrawals, etc.?
How much money do you *require* for living expenses and debt payments?
How much do you tend to spend on extras?
If you can, hire a financial planner to help you with this step. They are extremely helpful for goal setting and long-term forecasting. To learn more about financial planners (and the difference between them and financial advisors), click HERE.
It’s also important to have a discussion with any person, partner, or housemate that is tied to your finances. Talk to them about their financial risk comfort level and make sure to discuss the *value of your happiness* in this equation. There is a lot to be said for your mental health and how you all might be willing to do things like stay in a smaller apartment for one more year so you can find daily work that makes you a fun person to be around.
A special note on health insurance: many people assume their insurance costs are covered 100% by the company they work for when, in reality, many companies only cover 50-60% of these costs. The rest is taken from pre-tax income. Be sure to check on this! The difference between what you currently spend on insurance and what it actually costs in the marketplace may be less than you think. And when it comes to getting your own insurance, talk to a broker and find out what it would really cost. They truly can be quite helpful. (In New York State they are provided through the marketplace at no fee to you.)
Okay, now that you know how much money you actually need to survive within Capitalism in America, how do you *actually* create financial security so you can take a risk with your career?
I propose two options:
Option 1: Squirrel it away
If you haven’t already been doing this, start this now and be really serious about it. Put as much as you can every week or month into a *high-yield savings account* (I use Ally, others like SoFi. Do your research about what will work best for you but, ultimately, just do it. It's quite easy).
Get *beyond* three months of expenses in your account. If you only have three months, things are still going to feel very tight. Three months is what you should have, anytime, for an emergency. Everything beyond that is for you to use to follow your dreams—sometimes that dream is a kitchen renovation or a big trip or, like right now, that dream is transitioning to work you really want. I recommend saving six months’ worth of expenses at minimum (three months of emergency + three months of work transition) and more if you are a financially-anxious person.
Most importantly, remember, you’re going to *plan to spend this money*. That’s what this money is for. It’s for spending while you make a transition. So, stop being upset as you watch it dwindle once you start your leap. That's why you have it.
Option 2: Get low-pay, low-stress work that will keep the lights on
This might mean keeping your current job and "coasting". If you have a really time-consuming and/or high-stress job, this approach likely won't work. If you have a job with good boundaries and you suspect no one will notice if you do less every day, then the job is coastable.
Or this might mean getting a job at a friend's bookstore, babysitting for a neighbor one day a week, or asking that old client who is kind of boring but dependable if they have any work they can send your way for a few months.
In either case, the goal is to have income that is flexible enough for you to leave work at work, leaves time to pursue a big leap outside of that job, and doesn’t make you want to scream every day.
I honestly find that a combination of these options allows for the most psychological freedom. The best way to do this is different for everyone and in every kind of context, but the goal is the same: create a safe financial situation to free up the mental space to go after your next steps and do it right. It's not a quick change; it's a big deal. You want to allow yourself the flexibility to see what might happen when you aren’t having a panic attack each time your credit card bill comes.
So, what’s the next exciting goal this financial freedom will allow you to pursue?
