Christopher Liew: Here’s how much money you should save before quitting your job

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Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

The decision to quit one’s job is often driven by burnout, higher ambitions, dissatisfaction with co-workers or managers, or major life changes like starting a family, going back to school, or moving to a new city.

How much money you should have set aside before handing in your resignation depends on your expenses, career plans, and personal risk tolerance.

Without a solid plan and budget, even a short gap in income can quickly create stress. However, with proper savings in place, you minimize your risks and improve your chances of success at whatever the next big thing is.

Below, I’ll go over how much you should have saved before you quit and some questions you should ask yourself before you take your leap of faith.

What should your baseline safety net be?

According to Mercer’s August 2025 turnover survey, the average voluntary turnover rate across all industries sat at 10.2 per cent. Of course, there’s a lot of variability between different industries. On average, though, this means that one out of every 10 people will quit a job voluntarily and move on to something else.

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A common financial guideline is to have three to six months of essential living expenses saved before leaving a job. This isn’t based on your full spending habits, but rather on the bare minimum costs to stay afloat, including:

• rent/mortgage payment;
• average monthly utility bill;
• groceries;
• transportation costs;
• insurance costs; and
• debt payments (credit cards, car payments, etc.)

Ultimately, the more you have saved, the smoother your transition will be and the more opportunities you’ll be able to take advantage of.

When three months may be enough

For many, three months of savings may be enough to bridge a short job transition.

If you’re leaving one employer to look for a similar role in the same field, your job search may be shorter. Existing experience, references, and industry networks can simplify re-employment.

Having three months of savings should give you enough time to finish your hiring process, go through training (often at reduced pay), and pay your bills while you’re waiting on your first major paycheque to hit.

When six months is safer

A six-month savings cushion offers greater flexibility, reduces financial pressure, and allows you to make thoughtful career decisions rather than rushed ones. This is especially true if you’re switching industries, you work in a highly competitive field, or you have more financial responsibilities.

Changing fields often means additional training, certifications, or time spent building new networks. Job searches in unfamiliar industries typically take longer, and income may not be immediate.

Also, some industries experience hiring cycles, rely more on contract-based work, or have periodic slowdowns. If job openings are limited or competition is high, securing a new position may take time, and a larger cushion will save you from financial stress during longer job searches.

When a year’s savings is realistic

In certain situations, having up to a year’s worth of expenses saved can be the wisest choice before quitting your job. While it may sound ambitious, a cushion this large will give you the most flexibility and allow you to have full confidence in your next path.

If you plan to start your own business, this is especially true. Entrepreneurship rarely produces a stable income right away. Building a client base, developing a product, and establishing a brand all take time, and a 12-month savings cushion allows you to focus on growth without the constant pressure to generate quick money to pay the bills.

Alternatively, if your goal is to step away from work for personal growth, travel, or rest, you’ll need to replace your income entirely with savings. In addition to covering the time you’re taking off of work, you’ll want to factor in travel costs (such as plane tickets, hotels, and visas) as well as the time it could take to find a new job once you’re finished with your time off.

Other factors to consider before quitting

In addition to keeping your basic bills and living expenses covered, it’s also important to consider other factors as you begin the process of leaving your current employer and looking for new opportunities.

Health insurance and benefits

Many jobs offer supplemental health-care or dental insurance. Once you leave your job, those benefits typically end.

Replacing them with private insurance can cost more, especially if you have dependents or ongoing medical needs. It’s important to price out coverage ahead of time if you’ll continue to need it or cash in on your benefits before your coverage ends.

How much debt you have

High-interest debt becomes harder to manage without a steady paycheque. If you’re carrying credit card balances, personal loans, or large car payments, consider paying these down before quitting.

Final thoughts

Quitting a job, especially one that you’ve worked at for a while, is a leap of faith toward a fresh start. Whether you’re chasing a better opportunity, switching careers, starting a business, or taking time to travel, it’s important to have a financial safety net before making an impulsive decision.

While saving three to six months of expenses is a solid baseline, your ideal savings target ultimately depends on your unique situation and how much flexibility you want or need.

Read more from Christopher Liew:

• The easiest way to reset your budget for the new year
• Tips for tackling holiday debt, including what to pay off first
• Five smart money moves to start 2026 right
• Why most financial new year resolutions fail
• Are GICs still worth it? What Canadians are choosing instead