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Erika Kullberg
One day, Erika Kullberg was earning over $200,000 at her job as a corporate lawyer. The next, nothing. "My salary after I quit was zero," she told Business Insider in 2021.
Kullberg left her law firm after she was denied an extension on a work assignment despite being in the middle of a family emergency. "It was heartbreaking, and I always say I don't blame the boss ... but in that instant, I knew I was going to quit," she told Business Insider.
Kullberg worked for years to get to the point she was at. Her job was intellectually stimulating, and she got to work on billion-dollar deals daily. But it was also a lot of hard work, wasn't always fulfilling, and often came with long, unpredictable hours.
"I never made plans in the evenings because I never knew if I was going to get done with work at 7 p.m. or 2 a.m.; there's no predictability in that type of life," she said.
It all came to a head when she was denied the extension, and no matter how much she had once wanted this life, it was no longer serving her. So she left.
Still, these choices always come with practical considerations; very few people get to take a 100% pay cut without planning how they're going to do it. When Kullberg left her law firm — and her salary with it — these are the steps she took to ensure she'd still be financially secure.
"The biggest thing was assessing my financial situation," she said. "Taking a look at my net worth and figuring out how much I have in cash, retirement accounts, in my emergency fund."
Kullberg had already paid off her student loans and had no other debt. "It's really a mathematical thing. How much am I spending each month, and how many months can I last based on that?" she said.
After assessing her personal financial situation, she reviewed what types of benefits she could receive from her company before her last day.
"I also did things like calculating the number of vacation days I had not used and looking at health benefits," she explained. She recommended others do the same before quitting a full-time job. "Look at the policies: Are they going to pay you out for those vacation days, or is it better to use them up?"
Knowing she would lose her company-sponsored healthcare plan, she also used those benefits before she left. "Go get your teeth fixed, go for your annual check up," she said.
Kullberg said she built up enough of an emergency fund to sustain her for a number of months that she felt comfortable with. This number will vary for everyone, she noted, but experts recommend saving a minimum of three to six months of expenses.
"I had a number based on my risk tolerance," she explained. "I had a number of months I was very, very comfortable with, and so I made sure that that was saved up."
Some call this a "walk-away fund," a specific set of savings put aside for situations such as the one Kullberg was in. They can be built long before a person needs to use them, but the point is to have the money to "buy" the freedom to leave a job or situation that isn't working for you anymore.
Kullberg had built her savings over time by living a very frugal lifestyle, even when she was making a high salary. "Right from the beginning, my mentality was always going to be pretending like I was still a broke law student," she said.
After leaving her law firm, she made certain lifestyle changes to save money while working toward her next job. Kullberg had plans to start her own company, but it took time before she was earning income from it.
The biggest thing for her was moving out of an expensive apartment into one that was a little more affordable. "You want to cut expenses quickly; cutting your rent is the quickest way to do that," she said.
But for the most part, even when earning a high income, Kullberg didn't live excessively. "Ever since I was at a law firm, I was really frugal," she said. First, she was a student; then, she was working to pay down her student loans, and finally, she was building her emergency fund.
Even while her income was growing, her lifestyle was very similar. When she left her job, she didn't have to readjust too much.
Kullberg now runs a successful YouTube channel about personal finances and is the founder of Plug and Law, a legal service company.
"Not everyone will necessarily be supportive of your decision to make a drastic change," she said, "but staying true to what you want, why you are making such a drastic move, and what's on the other side of it for you."
This story was originally published in September 2021.
