Can I Afford to Quit My Job?

How to plan for a major break from the workforce.

By + More

As the mother of an 18-month old son and full-time marketing consultant, Chrisanne Sternal, 36, says she's constantly asking herself, "Who are you going to let down today?" Between setting up doctor's appointments and juggling her own clients, Sternal feels like there's never enough time. That's why she's considering quitting her job to become a stay-at-home mom. But first, Sternal, who lives in Fort Myers, Fla., is crunching numbers to see if her family can afford to live on her husband's income alone.

[In Pictures: 10 Ways to Start Earning Extra Money Now.]

Between 1.5 and 2 million people quit their jobs each month, whether it's to pursue a new opportunity, start a business, or care for family members. But it's not an easy decision to make. Aside from the financial impact, workers like Sternal also often consider the effect on their overall fulfillment and lifestyle. That's one reason career and money experts recommend putting a lot of effort into preparing to quit before making any big announcements.

For Sternal, part of that preparation involves hiring a bookkeeper to review her income, expenses, child care, and taxes. "Based on my rough estimates, I might only be making $10,000 a year [after subtracting those expenses], so if I'm making less than $1,000 a month, is that really worth it? What am I really bringing home?" asks Sternal. She adds that her family could compensate for that level of income loss by cutting back on certain luxuries, such as HBO and satellite radio.

That's just the kind of planning that Carmen Wong Ulrich, author of The Real Cost of Living, recommends for anyone considering leaving their full-time job. "It's always best to have ample savings, even a year's worth of expenses, before you head out on your own," Ulrich says, adding that it's not always possible for everyone. "What you do need, though, is a plan, even if it's just a plan of 'worst-case scenario,'" she says. That means knowing how you would respond to potential failure or setbacks, as well as financial changes you can make such as moving in with family or to a cheaper town.

[See Tips for Breaking Up With a Job.]

Still, sometimes "people are in a place when they just want out and they don't really have a plan," says career coach Laura Simms. If a workplace is toxic or depressing, Simms says it sometimes makes sense to leave immediately, even without a fleshed-out financial plan in place.

"I ask clients to talk with family or roommates or whoever they share finances with before making a big decision that's going to impact them all. Often, families are willing to take on a little financial hardship if it means getting out of a bad work situation," Simms adds.

After all, earnings are not the only measure of career success. Jamie Ladge, assistant professor of management and organizational development at Northeastern University's College of Business Administration, uses subjective measures based on feelings of fulfillment rather than the traditional measures of earnings and promotions to gauge success. She has found that while taking a career break to care for children has a negative impact both objective measures (earnings) and subjective ones (satisfaction), working part-time hurts earnings but not career satisfaction.

Based on those findings, Ladge suggests, "Don't step out all the way. Try to keep your foot in the door, even if a little bit, because that will help you maintain your skill set and keep something in that trajectory," which will increase the chances of both higher earnings and greater satisfaction later.

[In Pictures: Celebrities with the Biggest Money Problems.]

Indeed, career transformations often involve years of transition and fine-tuning, which is one reason Simms' clients sometimes choose to stay at jobs they don't love while plotting their next step. Simms herself worked as an actress earlier in her career, and then realized she wasn't happy. "I went through an unguided, uncertain period, and started writing about what qualities I want in my work. I knew I wanted to work with people in a coaching capacity, and to make a real difference." She started studying coaching while earning money through part-time work as she built her client base.