How to Create Financial Runway Before You Quit Your Job
How to Create Financial Runway Before You Quit Your Job
If you're thinking seriously about changing careers, one of the first questions may be financial:
How much money do I need before I can leave my job?
It's an important question. But I think there is another question worth asking first:
How can I create enough financial room to explore before I make that decision?
Because you may not need to quit your job tomorrow.
You may need enough breathing room to work out what you actually want to do next.
Financial Runway Is About Creating Choices
Financial runway is the financial room that gives you more choices.
That might mean having enough savings to take a career break. But it could also mean reducing your monthly expenses, working fewer hours, moving into a less demanding role or beginning to build another source of income while you are still employed.
When my husband and I began thinking differently about the years ahead, this was where we started.
We built a detailed picture of our finances. We looked at different scenarios, met with a financial adviser and examined our spending.
I even decided to stop buying new clothes, shoes and bags for a year. In the end, I continued for five.
The point wasn't extreme frugality.
I wanted to understand how much we actually needed and where we had room to make different choices.
That financial work eventually gave both of us more flexibility.
1. Work Out What Your Life Actually Costs
Your current salary isn't necessarily the number you need to replace.
Start with your actual household finances.
What are your essential monthly costs? Which expenses are commitments? Which are choices? What could change without making life miserable?
This isn't about cutting everything enjoyable from your life.
It's about knowing your numbers.
Once you understand what your life actually costs, you can begin exploring different scenarios instead of treating your current salary as the only possible starting point.
2. Consider Whether You Need a Different Kind of Job First
Leaving one career doesn't necessarily mean immediately beginning the next one.
After leaving my VP role, I took a smaller job in a different industry. Later, I worked part-time.
I gave up some income and status, but gained something I needed more at that point:
time.
That time allowed me to explore possibilities I couldn't see while working at my previous pace.
A less demanding job won't be the right option for everyone. But it is one of the possibilities worth considering when you're working out how to create room for change.
3. Explore While You Still Have an Income
You don't necessarily have to leave your job before you start exploring what comes next.
You can research another industry.
Talk to people doing work that interests you.
Take a course.
Learn a new skill.
Test a small business idea.
Start a side project.
And sometimes the most useful result of that exploration is discovering that something you thought you wanted isn't actually right for you.
Every piece of information you gather before making a large financial commitment reduces some of the uncertainty around the decision.
Runway Gives You Room to Think
There is no single number that tells everyone when it is safe to leave a job.
Your circumstances matter. Your household finances matter. Your responsibilities matter. Your tolerance for risk matters.
For me, creating financial room wasn't about escaping work.
It was about creating enough flexibility to explore without needing the next answer immediately.
And that may be the most useful way to think about runway.
You don't necessarily need enough money to quit tomorrow. You need enough room to make your next decision well.
Create Time Before You Decide
If you're thinking about change but don't yet know exactly what comes next, Create Time Before You Decide is my free workbook for looking at your time, finances and practical options before making a big career decision.
