I’m thrilled to join the team at Sprout Wealth! After all, it was only about a year and a half ago that I seriously began to contemplate creating a side hustle of my own and leaving my job. I was inspired by so many personal finance bloggers out there, Frugal Rules being one of those blogs, and decided I wanted to be one of them. So I started a blog, found a freelancing mentor, and jumped into the deep end of side hustling without looking back.
I’d never worked for myself before or even considered it, but I’ve learned a lot of valuable lessons on the way that I wouldn’t have otherwise. It was simply a natural progression in my life, something that was bound to happen, but starting was the hard part.
If you’ve already found your niche in the side hustle world, congratulations. You’ve hopefully found something that you’re good at, something that you enjoy doing, and something that allows you to make extra money. A lot of people never make it to that point, so you should take pride in that.
But how do you decide when you should quit your job to grow your side hustle even more? If your side hustle becomes somewhat successful, it’s a question you’re bound to face eventually, and it’s a great decision to make, although it’s not one to be made lightly. If you are contemplating taking your side hustle on full-time, make sure you’ve covered these bases first.
Evaluate Your Income
The biggest thing to consider, for obvious reasons, is your income. Many side hustlers decide to leave their jobs when their side income equals or exceeds their full-time income. That is certainly a perfect time to turn in your two week notice, but depending on your situation you may not even need to wait that long.
What if you only make 90%, 75% or even 60% of the income at your day job? If you are in a good financial position, consider if your budget can handle a cut in pay. It’s certainly worth it to take a pay cut to pursue a side hustle that you love doing, assuming you can handle it financially.
Many jobs don’t utilize our best skills or our creativity, and that can be frustrating, but you can change that if you pursue your side hustle full-time. Wouldn’t you take a cut in pay to do something you love rather than drudging away all day in an impersonal cubicle?
Get Ready to Answer to Yourself
Clearly you won’t have a boss once you quit your job. Your only boss will be you. This means that you’ll have to have the discipline to continue to put yourself out there and do your best work in order to earn an income. It also means that you’ll have unlimited earning potential, something that you probably didn’t have at your old job.
At your full-time job, you probably wasted a couple of hours a day, but still got paid the same as if you had busted your tail for a full eight hours. In working for yourself you will be able to maximize your work days instead of wasting time until the clock reaches 5 p.m.
Branch Out and Network, Network, Network
Working for yourself, you’ll be forced to network a lot more and that was hard for me to swallow as an introvert. However, it’s necessary if you want to grow your business.
Let the people around you know what you’re doing and give them a chance to offer you support. If they don’t, don’t sweat it. I was so afraid of what others would think of my decision, but ultimately, you don’t have to explain yourself to anyone.
Before You Quit Your Job…
Before you leave your job, build up an emergency fund of at least six months of expenses. While working for yourself is amazing in so many ways, it can also be a little scary at times and financially unpredictable. Prepare for that ahead of time so you don’t panic later.
It’s also a good idea to check health insurance rates first. Shopping for insurance through brokers attempting to comply with the new health insurance laws was an eye opening experience for me, one that had me briefly questioning if I could still leave my job. You can easily check rates for health insurance through sites like eHealthInsurance.
Ultimately, I still made the leap, but I now have more expensive insurance premiums for the worst coverage I’ve ever had. I definitely lost a great benefit from my previous employer, but we beefed up our emergency fund just in case we needed it for health care costs which, thankfully, we’ve yet to use.
You Will Be Okay
I know it can be scary to leave a comfortable job with great benefits and plenty of job security. Believe me, I’ve been there recently. I got sick even thinking about turning in my notice and was shaking when I finally did it, but I’m so glad I finally made that leap.
So go ahead if you’re ready. Be a quitter, just this once.
Have you quit your job as a result of your side hustle growing? How much do you think you should be making prior to taking the leap? What’s one thing that scares you about working for yourself that has held you back?