Your ‘freedom number' might be smaller than you think
Anna Burgess Yang is the author of Work Better, a newsletter about the future of work, career pivots, and why work shouldn't suck.
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You dream of quitting a toxic job, pivoting to a new career, or starting your own business. But there's a financial reality to such a move: can you afford to earn less?
In 2021, I quit a job as an executive at a tech company. I pivoted into content marketing and journalism, and, initially, I was earning about one-third of my previous salary. But I had spent months looking at our household budget, and was prepared to earn even less.
When you're determined to make a change, you'll look at your finances differently. You should calculate your 'freedom number' and understand the changes you need to make in your budget.
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Keep in mind that your freedom number is not your final destination. It's a transitional change in your income to pursue the career you want.
Why your freedom number matters
Your freedom number is the bare minimum you need to cover your essentials: rent/mortgage, groceries, insurance, utilities, etc. It's not the same as what you're spending to support your current lifestyle.
Calculating your freedom number forces you to think about what you're willing to give up—even temporarily.
Let's say you're earning $100,000 today and think you need to earn $80,000. But once you go through the numbers and cut everything nonessential, you might find that the number is far below $80,000. Knowing that makes it easier to navigate a career change, because you know what you need to get by.
The bare minimum is your freedom number.
Closing the gap in your freedom number
If you don't think you'll earn enough to cover your monthly expenses, there are ways to close the gap between your income and your freedom number.
You might build up some savings and draw from that account when you make your move. Or you could supplement your income with a side hustle.
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When I first changed careers, I took a new full-time job and freelanced on the side. The combination of my new salary and my freelance earnings helped me reach my freedom number. It meant working in the evenings and on weekends, but it was worth it to make the change.
Keep in mind that a lower income might be temporary. Within eight months of starting a new career, I took a new job at a much higher salary. I just needed to get a bit of experience on my resume, and then many more doors opened for me.
As you settle into your career change and earn more, you can add back the things you enjoyed about your lifestyle. The temporary squeeze is worth it to find a freedom number that makes a lot of career options possible.
Subscribe to Work Better. Thoughts on the future of work, career pivots, and why work shouldn't suck, by Anna Burgess Yang. To learn more visit workbetter.media.
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The super-early-rate deadline for Fast Company's Most Innovative Companies Awards is Friday, July 25, at 11:59 p.m. PT. Apply today.
ABOUT THE AUTHOR
Anna Burgess Yang is part of the Creator Network at Fast Company, covering topics like work culture and the intersection of technology and work (including the impacts of AI).. Anna is a former tech executive who spent more than 15 years at a financial technology company, including roles as a product manager and the Director of Customer Success More
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