One of the best ways to figure out how to reach your vision is to figure out how much it really costs you to live the way you want to live. Depending on how close you are now to that reality, you may have to do a lot of research to get a realistic idea of how much money it costs to live the way you want to live. If you have any hope of quitting your job to focus 100 percent on your new lifestyle, you must get specific about the numbers.
How Much Are Your Fixed Expenses?
Everyone has fixed expenses – such as rent, car insurance, secured loans, and things like that. A fixed expense is just an expense that you have each month that is generally about the same amount, no matter what you do. This number will encompass the bare minimum you need to live without food.
How Much Are Your Variable Expenses?
These are expenses you have more control over and can be flexible each month, such as groceries, utilities unless you’re using budget billing, entertainment, and things like that. They may be required, like groceries, but they may also be optional, like going to the movies.
How Much Are Your Periodic Expenses?
This type of expense generally comes up quarterly, yearly, or some other period. This may include homeowner’s insurance, timeshare fees, taxes, garbage pickup, and maybe even medical bills that you didn’t expect.
What Expenses, If Any, Will Be Eliminated When You Quit Your Job?
It’s a good idea to add up the real costs you now have but also note the things that won’t be an issue when you don’t have your job. For example, if you eat lunch out daily due to work, need to buy certain tools or clothing, or pay for transportation to and from work, those expenses will generally be gone when you quit.
What Do You Need from Your Business to Quit the Job?
Once you add up all those things, you can now determine how much money you need the business to generate before you can quit the job. You don’t need the business to generate the lifestyle-changing income that you’re going for to quit. You only need to replace your income – and maybe less if some of your expenses will be eliminated once you quit.
The number you come up with that enables you to quit your job and live off your business income may be a lot less than you think. If you are struggling financially now with the job, you may find out that you need more. However, sometimes, you just find out that you need to do better with budgeting and financial planning to help you do more with less. Everyone needs to budget and engage in true financial planning if they want to make money fears secondary to their lifestyle planning.
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