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How to Quit Your Job
Telecommuting Tips: Working at Home With Kids

Telecommuting Tips: Deciding When To Quit Your Job

Posted by Valencia on July 15th, 2009

So, you’ve started your own home based business and you’re actually making money each month. I’m not talking about a few hundred dollars here and there–but real money–enough to match or exceed your current income with your employer. And in the back of your mind you’re thinking….I’m ready to quit my job. But is it really the right time?

Deciding the best time to quit your job after becoming self-employed is tricky. On one hand, you’re ready to give your employer the boot and focus your time and energies on your new venture. But on the other hand, quitting your job prematurely can create new problems, wherein you might have to eat humble pie and look for new employment.

Let’s face the facts, a large percentage of new businesses fail–especially in the first year. And while I’m not suggesting waiting a year before turning in your resignation. I do suggest taking a close look at your finances and business profits before making a hasty decision.

Talk candidly with your spouse: Openly discuss your plans to quit your job with your spouse. This decision will likely affect everyone in the household–especially if you’re the sole breadwinner. You’ll need to create a financial plan. And during slow periods, your spouse may have to increase their household contribution to cover necessary expenses.

Eliminate unnecessary bills: Highs and lows are common with home based businesses. You may generate several thousands of dollars in profits one month, and make very little the next month. To reduce economic stress, create a debt elimination plan before quitting your job. Pay off credit cards and avoid buying anything with credit. If possible, consider a mortgage refinance to potentially lower your monthly payments.

Create a cash reserve: Quitting your job after one or two months of running your own business may not be the smartest move. What’s more, having little cash on-hand is disastrous. Ideally, it’s best to have at least three months worth of income in a cash reserve–more if possible. This can compensate for slow months. And the extra cash comes in handy during vacation or sick periods.

Find a part-time job: Running a home business and working full-time is tiring. But a job can provide consistent income until your business takes off. Evaluate your finances and determine whether a part-time job is right for you. The money from a part-time job can help cover some household expenses. Meanwhile, the income from your home business can take care of leftover expenses and help build your personal savings.

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