Financial foundation for a life change (read this before you quit your job)
Financial stages explained, absolute must-knows and absolute no-gos
Financial Foundation
Let’s start at the beginning of the financial journey. Being in this stage means you have a regular income that covers your costs. You know your fixed monthly expenses, and you have a bit of wiggle room for discretionary spending like shopping, travel, hobbies, and social outings.
You have a separate account and can put a little money aside each month. Ideally, this happens at the beginning of the month. Pay yourself first.
That money goes into an emergency fund. Aim for at least $1,000 / €1,000 to start. After that, you can build a savings account for bigger goals (travel, a new car, etc.).
If you can’t save:
Increase your income
Lower your costs
Track your expenses. Use paper, a notes app, a spreadsheet, or a tracking app. Write down everything. Small expenses add up quickly. Eliminate what you don’t need.
If you can’t save, you can’t afford it. Period.
Avoid credit card debt with high interest. If you have it, pay it off first. It’s okay to enjoy life, but it’s more fun when you can afford it.
This stage can take years to move through. Be patient and pay attention to your money. You’ll stay in this stage until you can consistently put money aside.
If you're here, it's not the time to quit your job. Unless you're heading to a monastery, you’ll need money eventually.
Financial Stability
Once you can save, work toward an emergency fund with 3–12 months of fixed costs. Use your net income as a rule of thumb.
Higher income can help you save faster
But it can also trigger lifestyle creep
If you support others financially, you’ll need more buffer. Unexpected expenses (e.g. car repairs) need to be planned for.
Savings provide your financial runway: how long you can survive with little or no income.
Start investing money you don’t need short-term:
ETFs, stocks, bonds
Long-term growth, not quick returns
Never invest money you might need soon.
If you need cash soon, don’t invest. Stick to small, monthly contributions. Consistency > size.
Financial Runway
Planning a big life change (e.g. quitting your job)? Be clear on your future income.
If you’re:
Taking a sabbatical → assume zero income
Starting a business → expect volatility
Assume the worst-case scenario. Not the best.
Learn From Mistakes
Early in my freelance journey, two big clients backed out. My income forecast collapsed from six figures to zero. Be cautious.
Financial planning is not the place for optimism.
Know Your Fixed Costs
Fixed costs can change when you quit:
Lower: no commuting, lunch savings
Higher: new rent, travel, visas, etc.
Do your research.
Use:
Facebook groups
Podcasts
Nomadlist.com
People who’ve done it
Financial Wellness
At this stage:
You have 3–6 months of fixed costs saved
You have a stable income
You live comfortably without worrying about money
You don’t think about money – because there’s always enough.
Beware of Lifestyle Creep
This is when it starts. The best hack? Live well below your means.
Don’t pay to impress others
Focus on what money can do for your freedom
Think in trade-offs:
400€ handbag = 1 month rent in Vietnam
1,000€ spa weekend = a flight to paradise
Measure money in terms of freedom, not things.
Investments vs. Savings
Savings = accessible cash
Investments = long-term, not available
Only invest what you can afford to lose short-term. Use automation. Don’t overthink it.
How Much Should You Save?
Depends on your plan.
Example:
3-month sabbatical in Thailand
No income
No fallback partner
All costs covered by you
My advice: €10,000 minimum savings.
This covers:
Living modestly
Health emergencies
Occasional treats & travel
Return flights
Budget = survival, not luxury. Adjust for your country.
Know Yourself
If you need luxury to feel okay, that’s valid. Just budget for it. If you want massages, spa visits, and business class flights — you need more savings.
Then What?
You’ll need money after those 3 months. Don’t ignore this. Plan your next steps:
When will you start job hunting?
Will you go back to your home country?
Will you freelance? Start a business?
Will you stay mobile or settle?
Are you switching careers?
Be honest about what’s realistic for you.
Whatever You Do, Don’t Move to La-La-Land
Dream big. But plan realistically.
Financial planning is rooted in reality, not wishful thinking.
You’ll thank yourself later.
Financial Freedom
This is the dream:
Your assets generate enough income to cover your life
You don’t have to work
You can pursue passion projects
Assets =
Real estate
Dividend-paying stocks
A business
At this stage:
Focus shifts to wealth preservation
You’re thinking about tax strategy, not just saving
But even here:
Watch your cash flow
Don’t tie up all your money in long-term investments
Lifestyle Creep 2.0
When you finally get money, it’s tempting to spend big. Be careful:
Don’t inflate your lifestyle too fast
Stay modest even when you can afford more
Financial freedom means freedom. Not financial carelessness.
Even here, managing money takes work. If you don’t love spreadsheets and taxes, hire help. Add it to your budget.
The Best Part
You wake up where you want, doing what you want — because you want to.
I’m not there yet, but I’m on the way.
Everything starts with a desire to change.
Add:
Determination
Patience
A solid financial plan
...and quitting your job might be the first step on your path to freedom.
Just remember: it takes years, not six months. No magic. Just math, time, and consistent action.
