You’ve started the side hustle, but when it comes to actually quitting your job, something is holding you back.
You’d love to be with your kids more and you’ve been seeing all of these stories floating around Pinterest about people making so much money online. Moms quitting their jobs and working from home living their dream life.
You’re in. You want that, too.
But it feels like money is the big thing stopping you from making that jump.
How could you afford to quit your job and be a work-at-home mom? You’re a two-income family and you can’t just not make money.
So how do you make this happen? How do you financially prepare to be a stay-at-home mom without sacrificing your family’s stability?
In this article, I’m going to tell you the 7 things I did to prepare myself financially to quit my 9-5 job working as a science educator to become a work-at-home mom.
What Motivated Me to Finally Take Action and Quit My Job
When I finished graduate school, I really started to reconsider my career choice and quickly landed on trying to figure out some way to make money online. I really didn’t know what my options were but the idea of working for myself and making money from my own ideas was very appealing to me.
After a year of trying my hand at Etsy (which I was terrible at), I got pregnant with my son. This really drove me to want to figure out this whole online business thing.
That’s when I stumbled on Ebay.
I was good at it, it was fun, and I was making money with it.
Now the big question: how could I afford to quit my job and be a stay at home mom?
While my business was making some money, it wasn’t replacing my income. We were definitely a two-income household, so I had to make up my income if I was going to be staying home with my son.
For over a year, I just kind of hoped I would make enough money in my business to replace my income and then it’d be easy to quit my job. If I was making the same amount of money, then it wouldn’t be a sacrifice.
But that wasn’t happening and I yearned to be home with my son. Precious time was passing by and it was breaking my heart to think about my son spending 50 hours a week in the care of someone else.
So I did what any scientist would do and I started creating spreadsheets.
I created all different kinds of scenarios for how much money I needed to make or different expenses I could cut.
After a year of crunching lots of numbers, I was able to quit my job, become an entrepreneur and a stay at home mom.
If you’re like me, you probably feel like it’s almost impossible to afford to work from home but the biggest thing I realized was that even though we were using all of our two incomes, we didn’t have to be. Making some changes to our lifestyle was worthwhile if that meant I could quit my job.
To give you an idea of how I made it work, here are the various things I did to afford to quit my job.
Reduced eating out
This was a big expense when I was commuting to work every day. It was so easy to grab breakfast or a coffee on the go. Running behind on my way out the door and no time to pack a lunch? Just go out to eat with your co-workers.
I started cutting back on eating out a lot leading up to me leaving my job and this helped me save money.
Meal planning to reduce the grocery bill
Being a busy working mom, I didn’t always have a plan before going to the grocery store.
This often meant that I would go to the grocery store and just buy whatever I thought looked good for our meals. Often, this resulted in me buying a bunch of unnecessary items, food going to waste and often having food but not meals. I would either have to go back to the grocery store or end up eating out.
When I discovered that meal planning was a thing, this dramatically reduced my grocery bill.
Even though planning and creating a list for the meals took some extra time, it ultimately saved me time and money in the grocery store and at mealtime throughout the week.
Limit entertainment expenses
Basically, this meant that we limited our weekend adventures with our son to only things that were free or very low cost.
If we wanted to go to the zoo, we’d wait until we found a deal on Groupon or something. Many times we simply found things to do that were free like flying kites at the park or going fishing.
This might sound tough but just knowing it’s for a season makes it doable.
Reduced daycare costs
When trying to figure out how much money I needed to make to be able to cover expenses every month while working from home, a lot of the expenses are variable.
Since one of the reasons I wanted to work from home was to be with my son more, I chose to keep him home with me. This didn’t last long because it was just too much of a change for both of us.
After a month, I decided to put him in part-time daycare at a local church. He goes for 3 days a week. This reduced my daycare expenses from $750 a month to $400.
♦ Related posts you might like: 5 Reasons To Eliminate WAHM Mom Guilt for Using Daycare
You’ll have to decide what’s right for you, but reducing daycare expenses can save a ton of money and mean your business needs to earn less.
Pay off debts
I knew that my car was going to get paid off soon after I started working from home. This was a huge help since that meant less money I needed to make.
One regret I have is not paying off more debt. When I worked full time, I really didn’t think I had much money to spare but looking back, I definitely did and would’ve rather paid off my smallest credit card.
If you can pay off any debts while still working full time, then it’s definitely worth considering doing that. You’ll be so grateful for one less bill to pay when you’re working from home.
Saving money is a big one because it gives you that cushion for when you are transitioning to working from home and running your own business.
If your business is still relatively young, you really don’t want to have to use all of the profit to provide your income. If done this way, your business can’t grow.
Believe me. I almost did that to my business and had to quickly fix the cash flow issue. I had savings but not nearly enough.
The general rule of thumb here is to have about 6 months of expenses saved up. This sounds like a lot because it is, but trust me when I say that you’ll want that savings there while you’re getting your business up to speed.
It’s totally possible to quit your job without that much savings (I only had 3 months of savings) but it’ll definitely be harder. If you’re a visual person and would rather have a plan for saving up those 6 months of expenses, then you’ll want to get these free financial plan printables.
Increased my side hustle income
Of course, this side hustle would become my business once I quit my 9-5 job. So in order to feel better about that transition, I put effort into increasing my side hustle income to give me more peace of mind.
I’m going to put this word of caution in here though: Don’t forget that your business needs to grow so you can’t/shouldn’t take all of the revenue for your personal income.
Revenue in your business doesn’t equal your income.
I made that mistake because as a side hustle, I would often use the money I made from selling things on ebay for things like vacations or extra things we wanted. This meant that I made a nice chunk every month but my business couldn’t and didn’t grow.
Once you decide that you want it to support you so you can quit your job, you’ve got to start letting your business grow and that means only taking a percentage of the revenue for your income. For an idea of what a good percentage is, I highly recommend Profit First by Mike Michalowicz.
If you increase your side hustle income, then you can feel better about that transition from your job.
Leaving your job and working from home is a dream but the money aspect can feel scary. It only feels that way if you don’t have a plan though.
Do some or all of these things and you’ll be setting yourself up for success:
Reduce your expenses by cutting down on things like eating out and entertainment,
Cut your grocery bill by doing more meal planning,
Choose more affordable childcare options
Pay off any debts ahead of time
Have a healthy savings ready
Increase your income from your side hustle
I hope these tips help you have peace of mind about your finances so you can start taking action toward your goal of working from home.
Do you have any other money tips for preparing to quit your job? Share them in the comments below. We’d love to hear them.