- When Erika Kullberg’s law firm refused to adjust to a family emergency, she knew she had to quit.
- But first, she made sure she was financially secure, starting with checking her net worth.
- She saved several months of expenses and lowered her cost of living by moving to a cheaper location.
- Read more stories from Personal Finance Insider.
One day, Erika Kullberg earned over $ 200,000 working as a business lawyer. The next one, nothing. “My salary after I quit was zero,” she says.
Kullberg left her law firm after being denied an extension to her tenure as she found herself in the midst of a family emergency. “It was heartbreaking, and I always say I don’t blame the boss… but at that moment I knew I was going to quit,” she told Insider.
Kullberg worked for years to get to where she was at. Her job was intellectually stimulating and she worked on billion dollar transactions daily. But it was also a lot of hard work, it wasn’t always fulfilling and often came with long, unpredictable hours.
“I never made plans at night because I never knew if I was going to finish my job at 7 or 2 in the morning; there is no predictability in this type of life,” says- she.
It all came to a head when she was denied the extension, and no matter how much she once wanted that life, it didn’t serve her anymore. So she left.
However, these choices always come with practical considerations; very few people get a 100% pay cut without planning how they’re going to do it. When Kullberg left her law firm – and her salary with it – those were the steps she took to make sure she would still be financially secure.
She assessed her net worth
“The most important thing was to assess my financial situation,” she says. “Take a look at my net worth and figure out how much cash I have, from retirement accounts, in my emergency fund. “
Kullberg had already paid off his student loans and had no other debt. “It’s really a mathematical thing. How much I spend each month and how many months can I last based on that,” she says.
She considered and used the benefits she could get from her business before quitting
After assessing her personal financial situation, she reviewed the types of benefits she could receive from her business before her last day.
“I also did things like calculate the number of vacation days I had not used and look at health benefitsShe explains. She recommends others do the same before quitting a full-time job. “Look at the policies: will they pay you for those vacation days, or is it better to use them? “
Knowing that she would lose her company-sponsored health care plan, she also used these benefits before she left. “Go get your teeth treated, do your annual checkup,” she says.
She saved a specific amount of living expenses based on her personal risk tolerance
Kullberg says she built up enough emergency funds to support her for a number of months that she felt comfortable with. This number will vary for everyone, she notes, but experts recommend saving a minimum of three to six months of expenses.
“I had a number based on my risk tolerance,” she explains. “I had a number of months that I was very, very comfortable with, so I made sure that was saved.”
Some call it a “waiver fund“, a specific set of savings set aside for situations like the one Kullberg was in. They can be built up long before a person needs to use them, but the point is to have the money to “buy” the freedom to quit a job or situation that no longer works for you.
Kullberg had accumulated her savings over time by leading a very frugal life, even when she was earning a high salary. “From the start, my mentality was always to pretend I was still a broke law student,” she says.
She changed her lifestyle while working towards her next job
After leaving her law firm, she made some lifestyle changes to save money while working towards her next job. Kullberg intended to start her own business, but it took a while before she made an income.
The most important thing for her was to move from an expensive apartment to a slightly more affordable apartment. “You want to reduce your expenses quickly; lowering your rent is the fastest way to do it, ”she says.
But for the most part, even when he was earning a high income, Kullberg did not live excessively. “Ever since I was in a law firm, I was really thrifty,” she says. First she was a student, then she worked to pay off her student loans, and finally she built her emergency fund.
Even though his income increased, his lifestyle was very similar. When she quit her job, she didn’t have to readjust too much.
“Not everyone will necessarily support your decision to make a drastic change,” she says, “but stick with what you want, why you are making such a drastic change and what’s on the other side. for you.”