As I consider the idea of breaking free more, I realize that so much of it relies upon financial ability. Being in a place, financially, to handle the probability of a lack of income while pursuing self-employment possibilities is essential to the success of the journey. Stepping out on my own, though exhilarating, is also a terrifying thought for precisely that reason: I will lose the stable income of my 8-5 job.
As such, I need a plan. A financial plan to put me (and my husband) in a position where we can continue to eat, have a place to live, keep the lights on, get to work (in whatever form(s) that may take) and maybe even enjoy a night or two out even while I’m no longer bringing in a secondary income for a season. Below is a list of three financial goals Scott and I have committed to reaching before I consider leaving my 8-5 job. In other words, I will only leave if and when all three of these goals are met.
Goal 1: Become Debt-Free
Realistically, my husband and I cannot afford for me not to work. This is not actually a long-term issue, though, because I don’t plan on not working; I just plan on not working for someone else. It is, however, a short-term issue because we also cannot afford for me not to work for someone else right now. We need the stability and amount of my income to cover everything each month. In other words, I can’t quit my job tomorrow to focus on the other thing(s) I want to do because it doesn’t make sense financially.
And, the number one reason why it doesn’t make sense financially? Debt.
If we were out of (non-mortgage) debt today, me leaving the 8-5 life would be a little easier to accomplish tomorrow. Once we are debt-free, my chances of leaving 8-5 increase significantly because our lifestyle can be supported almost entirely by his income alone. I’ll still need to bring in an income, but it just won’t have to be as high (or as stable) as what I’m at now.
Therefore, the hubs and I are doubling down on our efforts to reach debt-free status. In all honesty, we’ve been on our debt-free journey for six years. And, in reality, we could have been debt-free three or four years ago. In fact, according to the plan we (loosely) follow, we almost certainly should have been debt-free long before now.
But, we’re not.
The whys behind that are for another post and another day but suffice it to say that being debt-free has not been the priority. As such, we currently have just over $30k left to pay off. This month, we’ll pay off the $20k car we bought in May leaving us with just under $30k to pay off.
Current projected debt-free date (DFD): December 2018!
Goal 2: Establish an Emergency Fund
We are also committed to building a fully funded “Emergency Fund” (FFEF) of 6 months worth of expenses before I break free. This will allow us to handle life’s unexpected expenses without going back into debt. For us, that’s roughly $18,000.
Current projected DFD + FFEF date: April 2019!
Goal 3: Get a Month Ahead
In addition to being debt-free and having an Emergency Fund, Scott and I subscribe to the living a month ahead mentality. However, over the summer, we chose to drain that particular buffer in order to accelerate our debt-free date. So, once all the debt is paid off, then we will also build that buffer back up so that we’re living on last month’s income this month.
Doing so allows us the freedom of knowing exactly how much money we have to live on each month. We do not have to guess due to fluctuations in hours, bonus pays, freelance income or anything else. As things stand now, our month ahead buffer is roughly $6,300.
Current projected DFD + FFEF + Buffer date: June 2019!
Whew. That’s a solid year-and-half from now. In some ways, it feels as if it might as well be 100-and-a-half years from now. But, I know that it will be here before I know it which means the hubs and I have to be super-intentional and absolutely dedicated to our plan. Remember, all three of these goals must be met, at a minimum, before I consider leaving my 8-5 job. If we succeed, though, then it’s very possible I’ll be free from the 8-5 life by my 36th birthday!