How much money do you need before you quit your job?

Step 1: your monthly number

Add up everything you need to pay each month to live the way you want to: housing, bills, food, transport, childcare, debt repayments, insurance and a sensible amount for everything else.

Use your bank statements from the last three months rather than guessing. Most people underestimate by 10 to 20 percent the first time.

Step 2: allow for tax

Your monthly number is what you need after tax. When you're self-employed, you pay Income Tax and Class 4 National Insurance on your profits yourself, so you need to earn more than your monthly number.

In 2026 to 2027, most people in England, Wales and Northern Ireland pay no Income Tax on the first £12,570 of income, then 20% on income up to £50,270. Scotland has its own Income Tax rates. On top of that, Class 4 National Insurance is 6% on profits between £12,570 and £50,270. Put money aside for your tax bill every month so January isn't a shock.

Step 3: your savings buffer

Multiply your monthly number by the number of months you want as a cushion. Three to six months is a common range. Choose the higher end if your income is uneven, you have dependants, or you'd hate the pressure of a thin buffer.

Step 4: how much your own income already covers

Your side income reduces how much you need. If your business already brings in half your monthly number, your savings only need to cover the other half while it grows.

That's why testing an idea on the side before you leave is so powerful. Every pound it earns makes the leap smaller.

A worked example

Sam's monthly costs come to £2,200. Sam wants a six month buffer, so the full cushion would be £13,200. But Sam's side business already makes £900 a month after costs.

The gap each month is £1,300, so six months of cover is £7,800 rather than £13,200. Sam also sets aside money for tax on the business profits. With a plan to grow the business by a few hundred pounds a month, Sam can pick a realistic leaving date and track progress towards it.

Make the number visible

Once you know your numbers, track them every month: savings, business income and the gap between them. Watching the gap shrink is one of the best motivators there is.

This guide is general information, not financial advice. If your situation is complicated, a qualified adviser or accountant can help you check your plan.

Common questions

Is three months of savings enough to quit my job?

It can be if your own income already covers a good part of your costs. If you're starting from nothing, six months or more gives you more room to grow without pressure.

Should I pay off debt before I quit?

Reducing high-interest debt lowers your monthly number, which makes leaving easier. Many people aim to clear expensive debts while they still have a salary.