Take These Financial Measures Before Quitting Your Job
In what has been called the Great Retirement, 95% of workers are considering quitting their jobs in a recent poll, with a third citing burnout as a major factor. If this applies to you, you need to have a financial plan before leaving the ship, especially if you are not going to another job. Here are some tips to follow if you are about to leave before another show awaits you.
Look for alternatives to actually getting fired from your job
For the sake of financial security, you should ask yourself if you really need to quit smoking at all. In most states, you will most likely not be eligible for unemployment benefits if you quit voluntarily, unless it is for a “good reason,” such as unsafe working conditions or accepting a firm job offer that will not work later. In addition, quitting smoking gives you less flexibility in finding a more desirable job, as you will be in time rush to reduce dwindling savings. If you feel like you can’t handle it in your current work environment, talk to your boss about what can be done to change or reduce your workload – the worst they can do is say no, and if they really value you as an employee, they may be willing to do whatever they can to keep you. And while staying at work, your job search can last as long as you need to, allowing you to quickly move to the desired job.
Make sure your debt is manageable
Reconsider quitting your job until you have paid off any high percentage of debt from credit card balances or other loans, especially if there is any chance that you might miss a payment when they stop rolling regular salaries. Otherwise, you want to take a list of your expenses and see how you can maintain debt payments while you are unemployed. Student debt gives you more room to maneuver right now as the moratorium on payments and interest has been extended until January 31, 2022 .
Have annual living expenses in the bank (if you can)
Sure, this is not an easy task, but financial planners usually recommend that you agree on expenses for twelve months (rent, car, insurance, all that) before quitting your job, if not more. Sure, the job market is hungry for employees right now, but you also have to consider the uncertainty. Many people leave their jobs planning to find a new one right away, but this does not always happen, even if you have relevant in-demand experience.
Reduce fixed costs
Just because you have money saved up doesn’t mean you definitely want to spend it, either. Try to stretch every dollar by redefining your spending and reducing your monthly maximum costs. For example, could you save on rent by living with your parents? Do you really need multiple TV streaming services? Since you will not have any income, you will want to keep costs to a minimum.
Don’t let your insurance expire if you can avoid it
Life, health, and disability insurance is often included in an employer’s benefit package, and if you drop coverage after you leave, you will need to already have a plan on how to close the gap between coverage periods when looking for a new job. Also, avoid the temptation to cut back or cancel other important insurances , such as renter’s insurance or auto insurance (if you no longer need a car). When it comes to health insurance, at least consider enrolling in the cheaper Bronze Obamacare plan to protect yourself from excessive health care costs that could ruin your finances in the event of a natural disaster.
Plan to roll over your 401K (if you have one)
It may be tempting to cash out your 401 (k) when you quit your job, but this carries immediate penalties and severely limits your ability to save for retirement. Consider leaving your existing 401 (k) plan with your current employer (if it exceeds $ 5,000) until you get a new job, at which point you can request a direct transfer to your new employer’s 401 (k) plan. If the new employer does not offer 401 (k), or if you are starting a new business, consider transferring your existing 401 (k) to an Individual Retirement Account (IRA) .