How To Escape The Rat Race – 8 Proven Methods That Work

Presented byTom Blake Hours Fresh Since

The idea of the American dream is often contrasted with the nightmare of the so-called rat race. The rat race is the term we use to describe seemingly endless, unfulfilling work that barely covers our living expenses. Over the years, the rate race becomes a grueling existence, almost like a form of corporate slavery.

Many people caught in the 9-5 grind are wondering how to get out of the rat race. And at WebMonkey, we believe anyone can achieve this goal. Between various side hustles and financial tips, it's fully possible to gain freedom back over your time and future.

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How To Escape The Rat Rate

1. Visualize The Kind Of Life You Want

The first step in getting out of the rat race is to visualize the kind of lifestyle you want instead. After all, you want to have a gameplan in mind as you work towards a specific goal so you know which direction you're heading.

Visualizations aren't just hocus-pocus, but are grounded in a particular science called neuroplasticity—the study of how the brain builds and organizes synaptic connections. And it's why outlining the kind of life you want instead of the rat race is so important.

In fact, in a survey TD Bank conducted of 500 business owners, they found that 67% believed that looking at physical pictures of their goals would help actualize them.

So, take some time to outline your goals and the kind of life you want instead of the rat race. Do you want to stop struggling with money? Is locational independence important to you? What are your dreams and goals outside of your career?

Pro Tip: Write these ideas down too and put that list somewhere you'll see it everyday.

2. Reduce Your Cost Of Living

Living beyond your means is another reason why so many Americans are caught in the rat race. And this is why finding ways to save more money and reduce overall living costs is so important.

Living more frugally is also how many people retire early to get out of the rat race. You'd also be amazed at just how quickly discretionary purchases add up. As we buy things like bags of candy or a latte on the go, we tend to think things like “it’s only so much extra.” But saying that a dozen times a month can break the bank.

Here are a few common budget categories and purchases people can often save money on:

  • Vacation
  • Meals out
  • Food delivery
  • Vices
  • Brand name products
  • Subscriptions you're not using

Yes, it’s painful to think of eliminating a yearly vacation. But maybe you can do a “staycation” instead of a cruise that costs 5x as much. Meals out are fun. But pack a lunch and save your splurging for a weekly (or monthly date). You get the idea.

To get started, you can use a budgeting app like Rocket Money or YNAB to easily categorize your monthly spending habits. Setting a weekly budget cap for spending categories, like groceries and entertainment, can then help you live within your means.

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3. Begin Investing

Investing for income is a key to building wealth and escaping the rat race. This is because income-generating assets help you diversify your income and accelerate wealth building. Eventually, your investment income can let you retire or significantly reduce how much time you spend working.

Most people become rich by investing too. And the great news is that you have so many ways to get started, including investing in:

  • Dividend stocks and ETFs (you can start investing easily with apps like Stash)
  • Bonds
  • Real estate (you can use platforms like Arrived to get started with only $100)
  • CDs
  • Mutual funds
  • Money market accounts
  • High-yield savings accounts (we suggest using Current to earn 4% APY while getting a $50 bonus)

If you're a W2 employee, see if your workplace has a 401(k) plan and company matching. Many corporations will match your retirement account contributions up to a certain percentage. If your workplace doesn’t provide retirement plans, you can open your own IRA and begin investing.

The bottom line is it's important to put your money to work to earn passive income. This is how most people build wealth consistently and get out of the rat race.

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4. Start A Side Hustle

If you're working 40 hours a week, there’s a decent chance that you have at least 20 extra hours you can put into a side hustle.

Like investing, creating a new income stream by side hustling can help you grow your wealth much faster. And the great news is there are tons of gig jobs or money making apps you can use to boost your income, including: 

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Even making an additional $200 to $500 per month can make a massive difference for paying rent, bills, and covering expenses. And you can always use the extra cash to begin investing too.

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5. Get Rid Of Debt

Like reducing your cost of living, tackling debt is another vital step if you want to quit the rat race.

The reality is that debt like credit card debt, personal loans, and other high-interest debts can crush your ability to build wealth. Over time, this is how people get in a cycle of endlessly borrowing money to get by.

If you're ready to tackle your debt, here are a few ideas to help you get started:

  • Use earnings from a side hustle to pay off debt faster
  • Adopt a debt-payoff strategy like the snowball or avalanche method
  • Work with a debt relief company like TurboDebt to lower your monthly payments
  • Borrow money from family to payoff some debt
  • Use a balance-transfer credit card
  • Using instant loan apps like EarnIn to borrow money against an upcoming paycheck

Reducing your monthly interest payments as fast as possible is the goal. And once you're debt-free, you can begin investing more money each month to accelerate your journey to financial freedom.

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6. Create An Emergency Fund

Investing (mentioned earlier) is really about saving up for the far-away future (e.g. retirement). But it's also important to build up an emergency fund to cover unexpected expenses so you don't have to borrow money to do so.

Life can get expensive without notice. Maybe your car breaks down, or maybe you lose your job. Whatever the case, it's important to have at least 3 to 6 months' of expenses saved up for a rainy day.

This cash cushion can also earn autopilot income over time. For example, you can park your extra cash in a high-yield savings account like Current and earn 4% APY.

Earning 4% APY might not sound like much. But if you stash away $5,000, that's $200 in free money each year alone. Not bad for a free high-yield savings account!

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7. Track Your Progress

It’s easier to reach your financial goals—or any goals for that matter—if you track them. And this is how you hold yourself accountable too.

We suggest setting several goals to help you escape the rat race. Your annual savings rate can be one of them. You can also track your net worth over time and the ultimate number you need to eventually retire and quit your job.

You can also track smaller goals along the way, like paying off debt or your monthly savings.

8. Switch To A Career Your Love

One of the most overlooked ways to escape the rat race is to stop looking at it like a rat race. That may sound like a tautology, so let’s explain.

If you're stuck doing something you don’t like or outright hate for 40, 50, or 60 hours a week, it’s easy to take on the perspective that you’re constantly sinking underneath your bills. But if you’re alive and thriving, it’s easier to have a positive outlook and enjoy day-to-day life.

By switching to a career that's more fulfilling, you might not even feel the need to leave the rat race anymore. And there are plenty of careers or fields you can consider, including ventures like:

It's never been easier to find a new career either. You can look for opportunities on various remote job sites. You can also launch your own business for free or a small amount with a platform like Shopify or WordPress these days.

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Final Thoughts

To quit the rate race, you’re going to need to have a game plan. You might need to make some sacrifices, such as cutting back your spending and picking up extra work. But the process doesn't have to feel painful and can actually be incredibly rewarding.

Ultimately, if you can find ways to boost your income while saving more money, you're well on your way to accomplishing this goal. Just make sure to actually set goals and track your progress to hold yourself accountable!

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Tom is a full-time blogger and freelance writer with a passion for side hustling, passive income, and making money online. His work has appeared on dozens of personal finance websites like Money Crashers, The College Investor, Forbes, and more.

Tom also founded the blog This Online World - a finance site dedicated to helping people make money online - in 2018. After 6 years, that site merged with WebMonkey, with the goal of helping even more people earn their first dollar of online income.

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