Leaving your job sounds great—until you run the numbers. Whether you’re chasing a passion, building a business, or just want your time back, the biggest question is always the same: how much money do you need to walk away without regret?
The answer isn’t one-size-fits-all, but there’s a simple way to figure it out. And it starts by looking at your actual lifestyle—not just your paycheck.
Step 1: Know Your Monthly Burn Rate
Your burn rate is the total amount of money you spend each month to live your life. That includes rent or mortgage, food, insurance, car payments, health coverage, subscriptions—everything. Track this for at least three months to get a clear average.
If your monthly expenses are $4,000, that’s your burn rate. Multiply that by the number of months you want to feel financially secure post-quit, and you’ve got your first milestone.
Step 2: Build a 12–18 Month Runway
If you’re planning to start a business or freelance, aim for 12–18 months of expenses saved. That gives you time to build income without panic. Using the earlier example, a $4,000/month lifestyle means you’d need $48,000–$72,000 in liquid savings—not retirement accounts or anything tied up long term.
It’s not just about surviving—it’s about buying yourself mental space to build something new without constantly watching the clock or the bank account.
Step 3: Account for Health Insurance
When you leave a full-time job, your benefits leave with it. Depending on your situation, COBRA or a private plan could cost anywhere from $300 to $700 per month. Factor this into your burn rate. Underestimating health costs is one of the biggest mistakes people make when trying to quit early.
Step 4: Have a “Worst-Case” Plan
What happens if nothing goes to plan? A backup strategy adds real confidence. This could be part-time work, a freelancing skill you can monetize quickly, or even a line of credit you’d only tap in an emergency. The goal isn’t to use it—but to know it’s there.
It’s easier to take bold steps when you know the floor won’t collapse under you.
Step 5: Consider the 25x Rule if You Want Permanent Freedom
If you want to quit and never work again, it’s a whole different game. You’re looking at the 25x rule: save 25 times your annual expenses and withdraw 4% per year. For a $50,000 annual lifestyle, that means $1.25 million. It’s more aggressive—but it’s the benchmark for full financial independence.
Most people don’t need that to quit temporarily or pivot careers—but it’s worth keeping in mind if the goal is permanent autonomy.
The Bottom Line
Quitting your job isn’t about hitting a magic number—it’s about building a cushion that gives you time, options, and clarity. Know your burn rate, stack up your runway, and have a backup plan. Because when the numbers work, the decision becomes a whole lot easier to make.
Alexander Clark is a financial writer with a knack for breaking down complex market trends and economic shifts. As a contributor to The Daily Overview, he offers readers clear, insightful analysis on everything from market movements to personal finance strategies. With a keen eye for detail and a passion for keeping up with the fast-paced world of finance, Alexander strives to make financial news accessible and engaging for everyone.
