Savings = Options

One of the most common questions I get when people hear that I quit my corporate job is about how I was able to do it financially.  As someone put it delicately the other day, “Isn’t it uncomfortable not having an income?”  Well, yes it’s uncomfortable!  Seeing all of the money go out of the checking account instead of coming in doesn’t generate feelings of comfort.  I take deep breaths and remind myself that this was the plan.  This is what I saved for.

Well, to be accurate, I saved for this scenario; the possibility that I would be living off of my savings for an extended period of time.  When I first decided to leave my job, nearly a year before I actually left, I planned to start a business.  I did research, took training, talked to people in my chosen field, and had a marketing strategy lined up.  But as I neared my exit date a different business opportunity came up that I was even more excited about and I turned my attention in that direction.  And yet another idea was born during the month I spent at a summer writing program – I formed a solid outline of a book I wanted to write.

By August the new plan was to work on the startup and write my book, and ideally generate income from both starting January 2014.  Soon it became clear that the startup and the book were on the slow track and as I learned more about both industries, I realized that neither one were going to provide a living wage anytime soon, if ever.  But I was committed.  I had a solid start to a book and an interesting new business and wanted to see how much I could do with both of them.  Plan V4 was to treat these efforts like full-time jobs and then amp up consulting in 2014.  Thankfully I had saved enough money to make this option possible.

I’ve always been a saver but once I made up my mind that I would leave my job, I doubled-down.  I got rid of my home phone and cut cable down to the cheapest plan possible.  I would have scrapped cable TV altogether but my internet bill was less expensive bundled with TV than without.  I stopped buying things.  I didn’t shop for clothes and if there was something I saw that I thought I’d like to have, like a kitchen gadget, I just didn’t buy it.  I became fond of the saying, “Use it up, wear it out, make it do, or do without.”  My one remaining consumer habit was cosmetics.  I have a “thing” for shopping at Sephora and long after I stopped buying other stuff I didn’t need, I was still purchasing lipstick and eyeliner.  Eventually even that fell away.  When I passed up the holiday coupon for $25 off a purchase of $50 or more, I knew I’d transcended.

Alison Green of the blog www.askamanager.org wrote about the choices that savings provides in a 2011 post titled “3 Things I Learned by Quitting my Job in a Recession”.  She wrote, “I wanted to quit my job and work for myself for a lot of reasons. I was able to quit my job and work for myself for this reason: savings.  Having savings lets you act from strength, not desperation. That has huge ramifications for the decisions you’re able to make and, therefore, for your quality of life.”

If you are considering a career change, maybe this New Year is the right time to make a resolution to save extra money so that you’ll have more options.  A great place to start is by finding out how much you really spend, which is probably more than you think.  A fellow career-changer, Jennifer Lesher, told me about www.mint.com.  It’s the best budgeting tool I’ve seen so far.  It sucks your online financial data into a dashboard where you can see your total spending by category (household, auto, insurance, food, etc.).

While it doesn’t feel comfortable to make a career change that involves financial risk, it is liberating to be able to choose.  I’m happy with my choice.

Tags: budget, change of plans, choices, savings