The First Step to A Smooth Job Transition

I have been pushing a friend of mine to get himself on a budget for several years now.  He has a full time job and has a lawncare business on the side.  He loves making people’s yards look beautiful and hopes to make it his full time business at some point.  However, the thought of leaving his current job scares him because the money from his business is not consistent.  His hesitance is completely understandable but it’s a completely solvable problem.  He needs to figure out what his normal monthly expenses are.  When he makes big chunks of money with lawncare, he can then budget out his money for those expenses in the future. 

For Example: Let’s say his expenses are $2,000/month.  One month, he makes $6,000 between his full time job and his lawncare business.  He can use a budget to assign that $6,000 to cover the next 3 months of expenses.  Simple.

Eventually this habit of budgeting and being disciplined about his expenses creates a surplus of cash.  If for some reason he loses his job and/or lawncare goes through a slow season (winter), he can float himself financially for a period of time without worrying.

I’ve asked him multiple times to get his total monthly expenses together.  It’s a simple step that will make him more aware of his financial situation than he is now.  He hasn’t done it but I’ll keep pestering him about it because I know he wants to operate his business full time at some point in the future.  

This is a conversation I’ve had with at least 10 different people in the last 10 years.  All of whom have their own businesses or want to start their own business.  Income is always the greatest concern when starting a business.  The value of being an employee at a large established organization is that we have predictable long term income.  (If this wasn’t the case, things like mortgages, car loans , and student loans wouldn’t exist.)  When a person starts a business, it’s highly unlikely to be profitable in the beginning.  If it is successful at producing reasonable income, that income is likely to be variable from month to month.  This means money needs to be allotted for future time periods when income is scarce.  I know people understand this because they wouldn’t be fearful of leaving a job if they didn’t understand it.  I think the reason people hesitate to begin budgeting is because deep down they know it will force them to develop discipline in their spending habits.  They will have to change.  Remember, change is the hardest thing we do in life.

I get it.  When I first started working as a Personal Trainer it was right after leaving the Engineering World.  I left a safe, high-paying corporate job, in a flurry, with no plan.  I had been so depressed that it had become an emergency and I didn’t have time to plan the transition.  Initially, I worked at a 24 Hour Fitness location in Houston, TX.  It was walking distance from my apartment and my car had been repoed so I was lucky in that regard.  I enjoyed going to the gym everyday.  I enjoyed my coworkers.  The clients were challenging at times but I was committed to the challenge.  But I didn’t have enough money to endure the transition.  It takes time to build a client base as a personal trainer.  Likely, several years for someone like myself who isn’t good at sales and marketing.  It wasn’t just that I didn’t have enough cash.  I didn’t have any money, I was deep in debt, and I wasn’t on a budget at the time.  A lack of money management meant that I had to give up personal training at that moment.  Fortunately, my next step would be joining the Army which is probably the best strategic decision I’ve ever made in my life.

While in the military, I always kept in mind that I had prematurely ended my time as a personal trainer because of a lack of financial discipline.  The sacrifices I made to become debt free were in part driven by the desire to try personal training again, after the military.  The changes I had to make were simple but difficult.  It’s often not until we impose restrictions on our spending that we realize that we self-medicate through spending.  Stress spending is just as real and pernicious as stress eating.  For me, developing the financial discipline was worth it.  In the 12 years since leaving the Army, I have consistently been on a budget, lived well within my means, and I don’t take on debt of any kind. These habits have allowed me to experiment with personal training and being a motivational speaker.  As a result of those experiments, I’ve landed on a very low cost business model of being a writer selling books. It’s hard to make a living as a writer.  Many people write books that never get read.  But I have the financial discipline and the artistic discipline to be able to stick with it for a long time to come.  I believe time and consistency will get me to a sustainable income one day.

Going back to my friend with the lawncare business, he needs to budget his money so that 1-2 years from now he has enough surplus cash to float himself for a year without making a penny.  This gives him a long runway to get his business off the ground and not have to run back to his current job.  This thought process is valuable for anyone, business owner or not.  I have to imagine that it is preferable to go to work knowing that if you were suddenly fired, you could go 3-12 months without making any money.  I’ve had a couple of times where I was sitting on 1 year’s worth of expenses.  Let me tell you, IT’S A GLORIOUS FEELING.  

Here’s another way to think of it: Have you or someone you know ever worked for a company who didn’t pay you on time?  I have a close family member who had an employer that gave out checks on payday.  Often, the employees would go deposit the checks at their banks only to have them bounce for insufficient funds.  No one believes that this sort of financial mismanagement from an employer is acceptable behavior.  Why do we accept aloofness and a lack of specificity in our personal finances, but we expect timeliness and precision when it comes to being paid by our employers?  Our employers, who are people just like us.  Weird, huh?

As always, this isn’t rocket science.  Make the time to look at your finances every week.  Budget and live within your means.  Your future self will thank you.

(Visit this page to see my tips on getting your personal finances in order.)

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