Let's talk about the elephant in the room - MONEY. Not enough of it to be exact! With many individuals struggling to save enough to secure their financial future, taking the leap into self-employment seems an additional burden and impossible dream.

It’s a startling fact approximately 20% of Australians have less than $1,000 in savings. Together with rising living costs and insufficient superannuation balances, this puts a lot of individuals and families in a precarious position in the event of economic downturn or personal financial crises.

But saving six months' expenses is just the beginning, not a signal to quit your day job immediately. It’s the foundation of what we call your financial runway—the length of time you can sustain yourself without any income while still covering all your expenses.

Building a financial runway will ensure you have the resources to sustain your new career or business. So, what do I recommend for a safety net? Aim for a minimum of six months’ worth of expenses saved. The more, the better, especially if you're more cautious.

For example, if your monthly living expenses amount to $3,000 and you have $20,000 saved, you can theoretically go over six months without any income and without altering your lifestyle.

Let’s break down how to calculate this financial runway with a quick financial lesson:

1. Determine values for these key metrics: Savings, Debt, Net Savings, Monthly Income, Monthly Expenses, Savings Rate and Months of Runway Desired. Let’s assume:

   • Savings: $25,000
   • Debt: $15,000 (loans, credit cards, etc)
   • Net Savings: $10,000 (Savings - Debt)
   • Monthly Income: $4,500
   • Monthly Expenses: $2,500
   • Savings Rate: $2,000 (Monthly Income - Monthly Expenses)
   • Choose the number of months of financial runway desired: 12 months

2. Calculate your Target Financial Runway:

   $2,500 monthly expenses x 12 = $30,000

   This financial runway can be reduced by the value of your Net Savings:

   $30,000 - $10,000 = $20,000 (instead of $30,000); or

   To put it in terms of months, this financial runway of $20,000 divided by your Savings Rate:

   $20,000 / $2,000 = 10 months (instead of 12 months)

In just 10-12 months, you could be financially prepared to take that leap and ensure you have a year’s worth of expenses covered. This planning not only boosts your confidence but also solidifies your financial security as you fully transition to entrepreneurship.

Along with building your financial runway, diversifying your income streams and finding opportunities to work on your own terms will further strengthen the shift away from your traditional 9-5 grind and toward the freedom you crave.

Freelancing is the gateway to achieving this. It allows you to offer your services on a project-by-project basis whilst still working in your current job. You can choose to offer services in the field you currently work in or find another marketable skill you can help others with.

The top freelancing jobs at the moment include Content Creation and Copywriting, Graphic Design, Web Development, Digital Marketing, Virtual Assistance, Online Tutoring and Coaching, IT Support and Cybersecurity, and Video Production and Editing.

But be warned that freelancing will require you to get out of your comfort zone and can easily turn into a different version of your current 9-5 trap - you are now managing all aspects of marketing, sales, client onboarding and administration.

So, why consider freelancing at all?

The answer lies in the flexibility it offers. It is a practical, low-risk way to build skills, understand the market, and grow your network—all while building an income stream to replace a significant portion of your monthly salary. You can work for multiple clients simultaneously and decide when, where, and how you work. It is a means to your end goal.

There are several platforms where you can showcase your skills and connect with clients – Fiverr, Upwork, Freelancer, Airtasker, Seek, Weploy, Workfast, Toptal, Oneflare and LinkedIn are some of the popular ones.

To stand out in these highly competitive platforms, you’ll need a portfolio that highlights your expertise and builds trust with potential clients.

So, how do you build that portfolio when you’re just starting out?

Start by offering your services at a discounted rate or even for free to a few initial clients.

Why? Because this isn’t just about making money right now; it’s about gaining experience and, more importantly, testimonials.