Getting Finances In Order To Quit
Ep. 142
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    Last week we spoke about the thoughts we form around money. This week I want to talk about the equation that you need to think about when you want to quit your job.
    I hear from so many people saying that they can’t quit because of finances. That can mean a number of things: They have too much debt, they just made a large purchase, they are not earning as much as they need, they don’t have a savings, etc. But each of these things can be remedied. If your thoughts don’t get you to bury your head in the sand, there are plenty of ways to tackle the issue of finances. Once we can begin to create a plan, we can figure out how long it will actually take us to be ready to quit.
Show Transcript
If you can look at like how when you change your thoughts about it from being so scary, a lot of times it can empower you to actually tackle it much faster. Again, there's no all or nothing, and there's no right or wrong. I'm not saying that you need to like give up your Starbucks, I'm just saying, get an understanding of what it is.

Hey, welcome to Lessons From a Quitter where we believe that it is never too late to start over. No matter how much time or energy you've spent getting to where you are, if ultimately you are unfulfilled, then it is time to get out. Join me each week for both inspiration and actionable tips so that we can get you on the road to your dreams.

Hello, my beautiful friends. Welcome to another episode. I'm so excited to have you here. Before we jump in, I just want to remind you all that I do a monthly free coaching call and it's really actually super fun. Ask the people that have come or better yet come and try it yourself. Even if you don't have a question, we'll just hang out. I promise it won't be just me and you, there's tons of people that show up. And a lot of times it's very helpful to watch other people be coached because you have the same brains and they have the same fears. And so it will help you even make sense of maybe some of the fears you don't even know are there. So if you want to join, you can go to quitterclub.com/coaching and join us for the next one. I would love to have you there.

Okay? Now that, that is out of the way. Last week, I talked to you all about money mindset. So if you haven't listened to that episode, I would suggest starting there because a lot of our problems with money really just stem from our thoughts about it. Because when you take away a lot of the thoughts and the morality, it’s just a numbers game, that's it. It's not overwhelming. It's not stressful. It's not anxiety ridden. It's just numbers. And if you don't feel like it's just numbers, then you got a lot of work to do about your thoughts about money. So I would recommend starting there. But I did want to do an episode. This is very bare bones, by the way, because I do not teach on this subject. And there are tons of very qualified people who I will tell you about that do teach on it, that you can get much more in depth. But I want to talk about the equation that you need to think about when you want to quit your job. Because I do hear from so many people that they can't quit because of finances. Now that can mean a number of things. They have too much debt. What they say to me is they'll never find another job that they can make that much. They are worried that if they start their business and it doesn't work, they're going to end up, you know, homeless because they can't pay their mortgage. Whatever the thought is around money. Uh, that's what stops a lot of people from going after the things that they want to go after. And when I push back, when they bring this up and I pushed back, more often than not, most of the people really have no idea about their own financial situations, right? And that tells me that it's not an actual math problem. It's their own fears that's kind of disguised behind finances. I'm not saying that finances is not an actual thing that you have to take care of before you decide to quit. It absolutely is, right? So there's the mindset issue. And then there's actual finances. Like, how am I going to live my life? How am I going to pay off my debt and my mortgage? How am I going to, you know, have enough food to eat? All of that stuff needs to be accounted for. But when you haven't done any work to look at the simple equation that you need to figure out how much you need to live, then it shows me that you are scared and you feel more comfortable because you know that right now, you'd like, you can make ends meet, right? You can fulfill your needs. So we've adopted, I guess, a mindset of like better the devil I know, than the devil I don't. And so many of us will then bury our head in the sands about our actual financial situation and just say like, oh, I can't quit because look, I'm making six figures here. And I'm always like, okay, so why does that mean you can't make six figures somewhere else? And people don't know, they've never looked into it, right? It's just like, they just had told themselves that like, well, you make a good living here so I guess we're going to have to stay here now because our lifestyle warrants this. And I just want you to get really clear on what the math of it is so that you can understand whether you can quit now or whether you can quit in a couple of years, right. Or whether you can start putting into place. So here's the thing I talked about it last episode about the fact that money is completely neutral. You can feel however you want about it. And if you are feeling anxious and stressed and overwhelmed it's because the thoughts that you're having about money. Money itself can't make you feel anything. A perfect example of this is debt. Most people have associated lots of negative thoughts with debt, right? You feel ashamed, guilty, overwhelmed, stressed. All debt is, is you deciding to borrow money to pay back at another date. There's no good or bad about it. And there might be a lot of thoughts about why you went into that debt, right? So maybe you think you have a spending problem and you have a lot of credit card debt, or maybe you're mad that you took out certain student loans. Again, those are the thoughts. The debt itself is just there. It's just a number and you have an interest rate and you have to pay back a certain amount. And so you have to start deciding how you want to approach that. Now there are a lot of people that have zero shame around debt. A lot of people use it to leverage their wealth. So maybe they'll take out a loan that has a lower interest rate and then invest that into something that has a higher rate of return, right? There's not a lot of drama around it. That's why a lot of times, if you go to a financial advisor, they might advise you against paying off all of your debt. If you have a really low interest rate, right? Cause you could use that money for other things. Again, this just requires you to understand your money.

This is why a lot of very extremely wealthy entrepreneurs have huge amounts of debt. It's just part of their business. They have to have it in order to leverage the thing that they want to do. Their thoughts are just different about that money. That's it. And so I want you to start examining the thoughts that you have around that and the shame that you feel about it that makes you bury your head in the sand. That makes you not look at the actual equation and figure out can I leave now? Can I not? So that's all we're going to talk about today is like, there's only two components here. There is your expenses and there's your income. That's it, right? It's money in, money out. Now your expenses obviously include your debt, your debt payments, as well as everything that you need to live month to month, day to day, whatever.

And then your income, we all know, is the money that you bring in. That could be your salary, your spouse's salary investments that you might have, whatever else it is. So the reason I want you to start examining this stuff again, I've talked about this, I think ad nauseum is that like I did an episode about short-term versus long-term goals. And I think a lot of times we have a lot of all or nothing thinking around our financial situation. It's like, well, if I can't quit now, I'm just not even going to look at it. I'm just going to decide that there's nothing I can do. That's never going to help you, right. Maybe you can't quit today. Can you quit in two years? Three years? Five years, right? Can you start looking at what you need to do to set yourself up to be in a position so that you can have some more financial independence? There are entire movements built around this, right? We had Paula Pant on the show. She is a big voice in the FIRE movement, Financial Independence Retire Early. I had Tasha Cochran on episode 83. She has a platform called One Big Happy Life. And her whole thing is to teach you how to build wealth the right way, how to leverage your debt to work for you, right? She's very much against the Dave Ramsey's of the world, which I am as well. He's very problematic, but even Dave Ramsey, like there's a lot of people that, you know, like his style, I guess, and it's paying off all debt. All of those are fine and all of them are there to help you. And you just have to like, take your head out of that sand to figure out how do I want to approach this debt? How do I want to think about this are my expenses. There's so many programs for like refinancing your loans. I saw this tip on social media where you should be paying your student loans every two weeks instead of once a month, because you end up saving so much in interest because interest is compounded every day on student loans, a lot of student loans. And so if you're letting it go by for 30 days, it ends up accruing so much more interest over the lifetime. If, especially if it's like a 20 year, 30 year loan, these are just small tips. Like you may not even change the amount that you're paying, but maybe if you learn, okay, I should pay it every two weeks instead of a month. I'll just set myself on that payment plan. You'll end up speeding up the amount of time that you have to pay that. Maybe if you learn like, oh, I'm paying it off the wrong way instead of just paying, you know, all of the minimums, I mean you should always pay the minimums. But like maybe if I start paying off the highest interest rate one more aggressively and focus on that, it'll cut down and then I can put all of the money that I paid for my, that minimum payment when that's done to the next one. Maybe I'll cut down 20 years to 15 years, let's just say, and this is actually a thing that I've seen happen over and over again. Is that when you stop thinking like this is too confusing, this is too hard so I'm just going to make the minimum payment and that's it. And I'm going to feel really anxious about it. And I'm going to hate finances. And I'm going to feel a lot of anxiety around that when you stop that, which creates the exact result you don't want, and you start figuring out like, how can I learn more? What am I missing? Okay. This is like a puzzle. And I have to figure out how am I going to pay off this debt? How am I going to manage my expenses? Right? When you start thinking of it like that, and you start getting into these movements, what ends up happening is because your thoughts become more manageable and it becomes like this, I can do this. I can increase that. I can pay off this much, you know, every month. It starts motivating you. And it sort of becomes a game. And I've seen so many people, and if you go on these communities, I mean, you'll see thousands of people that do this. But even in my life, I've seen people who will set goals of like, I'm going to pay off all of my student loans in five years. And then when they get into it, they pay it off in like two years, because once they've started figuring out different ways, once they get refinanced, once they start finding other ways to like squirrel away a little bit money and pay it off, it ends up happening so much faster. I had Kevin Ha on the show and episode 49, he was a lawyer. He had decided he wanted to pay off his loans. And then he started just picking up gig economy work, right? Like they had an extra room in their house. So they decided to rent it out on an Airbnb. And he would ride a scooter into downtown for work every day. And I guess you can get paid for charging those scooters. And so he started signing up and like charging the scooter and then he's like, that led him to doing Postmates. And that seems ridiculous, right? It's like, he's making six figures as a lawyer, but he was like, you know, I'm going to go to work anyways, I might as well do this. Or this is fun to me. It seemed like a little game outside of it. I'm not saying that's what you have to do. I'm just saying, if you can look at like how, when you change your thoughts about it from being so scary, a lot of times it can empower you to actually tackle it much faster. Part of that is the debt. And part of that is your expenses, right? So it's like, again, there's no all or nothing and there's no right or wrong. I'm not saying that you need to like give up your Starbucks or you need to go down to the bare minimum. I'm just saying get an understanding of what it is. Because so many of us, because we're overwhelmed, like when we start looking at our expenses, we start seeing like, wow, like there's a lot of things I can cut out. I don't need these subscriptions. I don't know why I've been paying them for all these months, right? Or I don't really like doing this as much. You know, for me, I know when I did an audit, I started making an audit of like what made me happy and what didn’t. And so like a lot of times I was spending money on things to like keep up with other people or for appearances. And I was just realizing, like, I don't actually care about those things. So like, I don't need to spend my money on that. But what I do care about, let's say like vacations ,experiences, I'm willing to spend a lot more, right. And like, I think it's like once you start actually figuring out what is important to you, decide on it, own it. No one's saying you have to like spend less, but figure out what it is so that you can live in a way that is conducive to you. And then when you figure out like the expenses and the debt that you're going to, that you have, and maybe you do figure out like, maybe you start realizing, like it's not important to me to live in this big house. Maybe I got this house because like, that's what my parents wanted. Or that's what society had told me because I'm a lawyer I need to have like this or whatnot. I actually want to live in a smaller house. I want to cut my expenses or I don't need this car. I want to keep our car, whatever the thought is. If that's what you want, you can start seeing how you can minimize the expenses. So you either have to make more or spend less. This is literally the whole equation. So let's say you don't want to spend less, then it becomes your income, right? You start looking at everything that you're bringing in. And then you start thinking like, are there ways for me to make more? Maybe it's staying in that same career, but moving to a higher paying job. Tasha Cochran talked about how she did that before she jumped and left the law. Like she moved her and her husband moved like Tuesdays. I think she went to four different jobs because she was constantly looking for a job that was paying more so that she could increase her net worth. I talked about how I did this when I left law school. I was dead set on paying off my student loans. And so I took a job that I knew I didn't want to be in. And I gave myself the short-term goal of like, you will stay here for two years and you will pay off all of this loans, the loan isn't hanging over me for the next 20 years. That's what I did. I'm not saying you have to do that. I'm just saying you can decide, like I want to make more so like, I want, I don't want to reduce my expenses. So I'm going to go to another job or I'm going to negotiate for a higher salary, or I'm going to start a side hustle, or I'm going to figure out a way where I can bring in some more income so that I can start paying this off. Once you know your expenses, your debt, you know what you can cut down. You know what that number is. And then you know your income, then it just becomes a kind of an equation of how much can you save for a runway for you to quit. And this really doesn't apply in all situations. I think a runway is obviously very important if you want to quit to like start a business, or you don't have an income coming in for a significant amount of time then you need to figure out how much do I need to save. But if you are just going to another job and let's say like, your job is going to match the salary then maybe you don't need a runway. But if you do, it just becomes again, an equation of figuring out if I need to save $50,000 or a hundred thousand dollars or whatever it is that you're going to need to feel comfortable. And this is how much I can save every month based on my income and my expenses, then it's going to take me this many months to get to that point. Maybe that's two years, three years, maybe it's five years. Maybe it's 10 years. I honestly don't care at this point because like, you're going to work for another 30. So why not put yourself in a position that in 10 years, and I promise you, you could probably do it faster than that. But let's say it's 10 years, at least in 10 years, you're going to thank the old you for doing that, you're going to be like, wow, I really set myself up so that I can do whatever it is I want to do after this. I want you guys to start doing this work because what I have seen, like I said is I've had clients who will tell me, like, yeah, I need to have this runway. I need to have this much saved up. And it's like, okay, that's fine. And then they get there. And then it's like, no no no, I need to have a little bit more. I'm gonna like double this or I'm going to add like 50% of this or whatever. I'm like alright. Then we get there. It's like, no, I still don't feel secure because here's the thing that a lot of times, when you have the thoughts already that like it's too scary to jump, what if I regret it? I'm gonna lose everything, I'm going to become homeless. You can't deal with those thoughts when you're hiding behind the fact that like it's just all finances. And a lot of times doing this work will start showing you that it's not, that it's fear. That finances are a thing that you need to take care of. But once that is taken care of, what's the thing now that's holding you back? Because then you have to start doing the real work of like I'm just scared. I don't want to be judged. Uh, I don't want to regret this. What if this doesn't work, right? And that's where the mindset work comes in. But I think the precursor to that is figuring out your financial situation and making sure that it is something that you can do. You can go to all of these places to get started. I really encourage you to not try to do it alone. There are tons of organizations. Like I said, I think Tasha’s is amongst the best. Um, you can go to One Big Happy Life and she does tons of free stuff on YouTube that you can just get for free. But a lot of these groups, when you are in it, you'll start realizing that there isn't shame around it. That a lot of people struggle with the same things. And they'll give you tools that you never knew before. They'll also show you tons of free services that will help you track your expenses and income. They'll show you the way so like you don't have to do it alone. So what my hope for you is to start figuring out what is the financial situation that you need to get to in order to start going after the life that you want. I hope this episode has helped and I will be back next week with another one.

Thank you so much for listening. I can't tell you how much it means to me. If you liked the podcast, please rate and review us on iTunes, it'll help other people find the show. If you want to connect or reach out, follow along on Instagram and Facebook at Lessons From a Quitter and on Twitter at QuitterPodcast, I would love to hear from you guys and I'll see you on the next episode.