Can I Afford to Quit My Job?

How much money to save before you resign

Quitting a job is partly a career decision, but it is also a financial one. Before you give notice, it helps to know exactly what leaving would mean for your finances.

There is no single amount everyone needs to save before quitting. What matters is your financial runway: how much money you have available, how much you need each month, what income you expect after leaving, and what costs or benefits will change when your employment ends.

Start with these seven numbers.

1. Your essential monthly expenses

Start with what you actually need to spend each month: housing, utilities, groceries, transportation, insurance, minimum debt payments, childcare, and other expenses you cannot easily eliminate.

This is your baseline. Separating essential expenses from discretionary spending gives you a more useful estimate of how much it costs to support yourself between jobs.

2. Your available cash savings

Next, calculate the money you could actually use to cover living expenses after leaving your job.

Focus on accessible savings and cash rather than treating retirement accounts or home equity as ordinary runway. The question is simple: If your paycheck stopped, how much money would you have available to live on?

3. How many months your savings will last

Divide your available savings by your essential monthly expenses.

Available savings ÷ essential monthly expenses = months of financial runway

For example, if you have $18,000 available and need $3,000 a month for essential expenses, you have approximately six months of financial runway.

This is a starting point, not necessarily your final number. If you expect reliable income after leaving, subtract that income from your monthly expenses to estimate how much you will need to draw from savings each month. Account separately for one-time transition costs and money you want to keep in reserve.

For example, if you have $18,000 saved, expect $1,000 in reliable monthly income, and need $3,000 a month, your savings would cover approximately nine months of the $2,000 monthly shortfall. That assumes your expenses and income remain consistent and that the full $18,000 is available to spend.

4. Your health insurance costs

If your health insurance is tied to your job, determine what coverage could cost after you leave.

Compare the options available to you and include premiums and expected out-of-pocket expenses in your post-employment budget. A cost that was previously subsidized by your employer can materially change your monthly expenses.

5. Income you expect after leaving

Leaving a job does not always mean having no income.

Consider income you can reasonably expect from a new position, freelance or consulting work, part-time work, severance, or other sources. Be conservative about both the amount and when that income will actually begin.

For freelance or consulting income, remember that gross revenue is not the same as money available to cover personal expenses. Account for business expenses and taxes before including that income in your calculations.

6. Compensation or benefits you’re giving up

Your salary isn’t the only financial consideration.

Look at bonuses, commissions, retirement contributions or matching, equity or stock that has not vested, paid time off, and other compensation you may lose by leaving at a particular time.

Sometimes the date you resign matters financially.

7. One-time transition expenses

Finally, consider costs created by the transition itself.

That might include job-search expenses, professional fees, new insurance costs, training or certifications, equipment, transportation changes, or other expenses associated with whatever comes next.

If the question is less about whether you can afford to leave and more about whether you still want the career you’re in, read How Do You Know When You’ve Outgrown Your Career?.

How much money should you save before quitting?

Start with the number of months you may need to support yourself before reliable income begins.

Multiply your expected monthly shortfall by that number of months. Then add one-time transition costs and any emergency reserve you want to preserve.

Monthly shortfall × months without sufficient income + transition costs = savings needed before quitting

For example, if you need $3,000 per month, expect no income for six months, and anticipate $2,000 in transition costs, you would need $20,000 to cover those costs. Any emergency reserve you intend to leave untouched would be additional.

The right savings target depends on your circumstances, including how predictable your next income will be and how much uncertainty you can reasonably absorb.

So, can you afford to quit your job?

The answer isn’t a universal savings target.

It’s whether your available resources give you enough time and flexibility for the transition you’re planning.

Knowing your number doesn’t make the decision for you. It gives you better information with which to make it.

Want to work through your own numbers?

The Can I Afford to Quit My Job? Financial Runway Planner helps you calculate your expenses, savings, and financial runway so you can understand what leaving your job would mean financially.

Work through your expenses, savings, benefits, expected income, and financial runway before you give notice.

​WORK THROUGH THE NUMBERS →​