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One of the most common questions people ask when they start thinking about quitting their job or building their own business is this: How much money do I really need to make to be free?

The answer isn’t complicated, and it’s definitely not a trick question. In fact, it’s something you can figure out very quickly—if you’re willing to be honest with yourself and do a little basic math.

When I started my first full-time business about 30 years ago, this was the exact problem I had to solve. I wanted out of my job, and I needed a clear, practical number that told me when it was safe to make the jump. That number didn’t come from motivation, optimism, or fantasy. It came from a simple budget.

Freedom Start With Knowing You Real Expenses

The first thing you need to determine is how much money you actually need each month to live. Not your dream lifestyle. Not luxury travel. Not “someday” money. Just the basics.

This means rent, food, utilities, transportation, insurance, phone, and other recurring expenses. You also have to factor in taxes, because taxes are an expense whether you like it or not. The number you’re looking for is how much money you need after taxes to cover your monthly bills.

If you currently have a nine-to-five job and want to quit, this step is non-negotiable. If you haven’t done a real budget yet, you’re flying blind. Guessing doesn’t count. Estimating doesn’t count. You need real numbers.

The easiest way to do this is to pull your bank statements from the last 90 days. Go through every transaction, categorize it, add it up, and divide by three. That gives you an accurate monthly average. This is especially important for things like groceries and discretionary spending, which most people dramatically underestimate.

Once you’ve done this, you’ll have a concrete number. That number represents your minimum required monthly income to survive independently.

When I did this back in the mid-1990s, I was working part-time and selling billable hours. I didn’t know then what I know now about pricing, but the principle still applies.

I took my monthly expense number and worked backward. I asked myself how many billable hours per week I needed in order to cover my bills and replace my job income. Once I had that number, everything became much clearer.

What surprised me was how low the number actually was. I wasn’t trying to replace my entire salary immediately. I was trying to replace my expenses. That’s a huge psychological shift.

Even better, I already had a few billable hours per week from part-time work. When I subtracted those from my target, I realized I didn’t need much more to make quitting realistic. It was still scary, but it was manageable. I quit my job, made it work, and within a few years my income had grown dramatically.

The same logic applies whether you sell services, products, or digital offerings. Once you know your number, you stop guessing and start planning.

The 30 Percent Rule

There’s another shortcut that works well for most people, especially if you’re building a business on the side. If your business income reaches about 30 percent of your job income consistently, you’re usually safe to quit.

Why? Because once you leave your job, you suddenly gain 40 to 50 hours per week that you can dedicate to your business. With that kind of time, your income almost always scales up quickly.

If you have savings, you can be even more aggressive. With a financial buffer, some people quit at 20 percent or even lower. That buffer gives you room to handle slower months without panic. The key is knowing exactly how long your savings will last and using that time intentionally.

If 30 percent feels too risky, aim for 40 or 50 percent instead. The exact number matters less than consistency. Whatever percentage you choose, it should be sustained for at least three months in a row. One good month doesn’t prove anything. Three consecutive months shows stability.

One of the biggest revelations people have when they do this exercise is realizing how little money they actually need to live. Freedom doesn’t require a massive income. It requires control over your time and your decisions.

There is a huge difference in quality of life between running your own business with modest income and working a higher-paying job where you have no flexibility, no security, and no control. Making less money while owning your time almost always leads to greater happiness than making more money while being trapped in a job you hate.

This becomes even more obvious when you factor in taxes. Employees often lose a shocking percentage of their income to taxes and payroll deductions. Business owners, by comparison, usually pay far less. That means you don’t need nearly as much gross income as you think to maintain the same lifestyle.

Find Your Number and Make It Your Goal

Freedom starts with clarity. Once you know your monthly expense number, everything else becomes simpler. That number becomes your target. You don’t need to guess. You don’t need motivation. You just need a plan.

Figure out what percentage of that number you need to hit before quitting your job. Decide how much risk you’re comfortable with. Track your income consistently. When you hit your threshold for several months in a row, you’re ready.

It really is that simple.

AI did NOT write this article. The article comes 100% from me and is 100% my content. However, AI was used to transcribe this content from some of my other social media which is why the voice is a little different. It’s still 100% my content and not written by AI. AI will never “write” my content!  Remember that you can always go to calebjonesblog.com and subscribe to my Substack if you want articles physically written by me with no AI involvement whatsoever.

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