Episode 69 - Making the leap

On January 3rd, Jeff gave his notice at his job to come work for the business full-time. In this episode, we discuss why we decided that now was the time, the planning we have done to get here, and why we gave up half our income to create our dream. 

Why leap?

We determined that in order to keep growing the business, we needed more time. It was becoming very difficult to grow either of the businesses with our current schedules. Time was now the critical factor for continued success.

Since both of us had a job and made almost the same income, we had to look at how much time we could recover. Jeff's job was 40 hours per week, 49 weeks per year. Kristin's job is about 20 hours per week, 8 months of the year and a few hours per week the remaining 4 months. Clearly, we would recover more hours if Jeff left his job. That would also allow him to assist with tax season any other administrative tasks in both of the businesses.

What we did to prepare for the leap

Over the last few years, we have been planning for this. We paid off over $220,000 in consumer debt. We built up a six month emergency fund. We lived on one income. 

For us, we can continue to live at the the same standard of living we have been for the past few years. We don't need to radically slash our lifestyle, although we will probably cut down on vacations for 2017. By doing all of this preparation, we are able to continue our current lifestyle while having more time to spend on the business.

We created a new household budget to verify that we could live off Kristin's income. We also looked over all of the personal and business services we subscribe to in order to ensure that we were using everything we are currently paying for. 

Finally, we reviewed our health insurance options. Jeff is a disabled veteran and will get his health insurance through the VA. Kristin will pick up health insurance with the University.

If you need health insurance to make your leap and you are a veteran, check to see if you qualify for health insurance through the VA, especially if there is an office close to you. If that is not an option, work with an insurance broker before you make the leap to check your options. Many people qualify for subsidies under the Affordable Care Act. These subsidies can make health insurance very affordable. 

Before you leap

Here are a few things you should do before you take the leap to full-time self-employment:

  1. Create a budget so you know your current personal expenses. 
  2. Pay off as much of your debt as you can. This is so much easier when you don't have any payments.
  3. Build up an emergency fund of three to six months of expenses. Six months is better.
  4. See if you can live on what your spouse(or significant other) and the business currently make. If you can, things will only get easier once your income increases. Also look to see what expenses would be cut if you went full-time. 

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