Let’s be honest, if you hate your job but are hanging in there anyway, there’s a good chance you’re doing so for the money. And that’s because even when you know exactly what you’d rather do for a living, all too often, that ‘something else’ won’t pay as well as your current job… at least at the very start. Maybe you want to travel, relocate, start a business or retrain for a career change – these things all cost money. But what if we told you that instead of spending the next six-to-twelve months feeling sorry for yourself, you could save the thousands of pounds – that’s not a typo, we do mean thousands – you need to quit your BS job and follow a new path without struggling to support yourself? Got your attention? Good. Here are our seven tried and tested steps that will help you to save enough money to quit your job.
One: Work out exactly how much money you spend each month
Unless you’re amazingly organised and track every single penny you spend, it’s likely that you have a warped idea of how much money you spend each month. But this is the vital first step in making an escape fund. How can you know how much you should save if you have no idea how much you really need?
Start by pulling out your bank statements and looking at how much money you spent each month over the past six months. Be sure to look both at the transactions you made by card as well as the cash withdrawals you made. Add that total up and divide it by six to determine your average monthly spend.
Now it’s time to work out how much you need. Review your transactions and divide them into two lists: essentials and non-essentials. Essentials are the things you absolutely must have to live – your weekly shop, mortgage, insurance payments. Non-essentials are the ‘nice to haves’ that, if push came to shove, you could easily live without – meals out, your morning Starbucks, new clothes, makeup, perfume, Netflix, gym memberships etc.
Once you have your two lists, move onto step two.
Two: Slash your spending by getting rid of the non-essential expenses
This is the point at which your true commitment to change will reveal itself. Are you willing to give up your creature comforts in the short term for long-term happiness and fulfillment? Let’s start with your gym membership. Even if you’re one of the few people who actually uses the gym regularly enough to justify a membership, there are lots of ways to exercise for free. For example, you can go running or do workout videos on YouTube. Similarly, you may believe that you need to have a full face of makeup every time you go out, but do you really need foundation, powder AND bronzer? And does it have to be MAC instead of Rimmel?
Meals out are another money drain. It may be easier to pick up a takeaway meal after a long day at work, but getting into the habit of cooking at home will easily save you £50 per week. And will it kill you to take a packed lunch to work instead of spending £8 each day on a Pret sandwich and coffee?
Be really brutal and ask yourself if you have to have the things on your non-essentials (and essentials) list. If the answer is a yes, ask yourself if there’s a cheaper alternative. Removing the non-essentials in your life is the quickest way to save hundreds of pounds every month. And over the course of a year, that adds up to thousands.
Three: Avoid or get rid of any long-term payments
It’s a terrible idea to take up any type of loan that has compulsory repayments if you want to leave your job. The fear of missing a payment will either keep you stuck in that job or will become a source of intense stress if you hit a dry spell after you’ve left the job.
But what about those commitments you’re already tied to? Review which are coming up for renewal – these are usually insurance payments (life, health, dental, home, phone etc) – and ask yourself if you have to have these things. Contact your insurance providers and see if any cheaper alternatives exist or if you can consolidate all of them under one comprehensive insurance plan. It’s also worth calling on your parents to see if you can be added to their plans for certain things like car insurance.
Speaking of parents, another long-term commitment you can get rid of is rent or mortgage repayments. If you live close to your parents, it’s seriously worth considering returning to your family home for a year and saving the thousands of pounds you’d spend on rent. And if you’re lucky enough to own your own home, moving in with your parents will give you an opportunity to make a little side income by renting out your house or flat.
Cars are another expense worth reviewing. They may be convenient, but if you live somewhere with good public transport, a car is a money pit – especially if you’re making car loan repayments on top of paying for petrol, insurance, road tax, MOTs and repairs.
Finally, stay away from store cards and credit cards. Any debt run up on these will become a source of pressure for you to repay and will prevent you from being able to quit your job as planned in the near future.
Four: Take full advantage of work benefits
So many of us don’t fully understand or make use of the benefits that are included in our employment packages. But now that you’re being frugal, you need these benefits more than ever. The good news is that employers usually cover big-ticket expenses like dentists, gym memberships, health insurance and eye checks. You may think you don’t need things like dental insurance right now, but making a pre-emptive visit to the dentist or opticians while you’re still covered by your company’s insurance will help you spot and treat any potential problems without you having to pay for it.
Check your entitlements with your HR department. If you don’t have any of these benefits, ask for them. Many employers are happy to provide dental insurance and cover healthy activities like gym memberships… but you’ve got to ask them first.
Five: Set up a standing order… to pay yourself
It’s not enough to cut down on your spending if you have the temptation of easily-accessible money sitting in your main account. You’ll save significantly more money if you put your wages out of your reach as soon as you get paid. Once you’ve worked out the bare minimum you need to survive, set up a savings account and a standing order to take as much of your monthly salary as you can spare out of your main account and deposit into your savings account. By setting up a standing order, it will happen automatically and you won’t have a chance to ‘forget’ to transfer the money each month.
Better yet, check if your bank offers a savings builder account that pays you a bonus for every deposit you make and removes that bonus if you skip a payment or withdraw your money. This will give you the ultimate incentive to keep paying into that account… and believe us when we say that putting £200 to £500 into a savings account each month quickly adds up.
Six: Get a side hustle to make an extra income on top of your full-time job
The aim here is not to run yourself into the ground by working two full-time jobs, it’s to make a little side money. We all have something we can do with ease that can bring in a couple of extra hundred pounds a month. Whether that’s babysitting, tutoring, setting up an Etsy page and selling cakes, knitted blankets or home-made jewellery, or doing some consulting in your area of expertise, it really doesn’t matter. As long as you can set aside a few hours per week to do this and charge well for your time, you’ll be surprised at the difference the extra income can make… if you deposit it straight into your savings account.
Seven: Do your sums
Before you can quit your job, you’ll need to have saved enough money to cover around six months’ worth of living expenses. And you’ll need to add an extra £1,000 to cover any unexpected emergency expenses. To know exactly how much you need to save, go back to the figure you came up with at the start of this article (when we asked you to calculate how much you spend each month). Add up the cost of your essential expenditures, then multiply this number by six to get the figure you need to save before quitting your job. Don’t forget to add that extra £1000 ‘emergency’ money to it.
Did we miss any useful tips for saving money? Let us know in the comments below.
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