This Is How Much Money You Need to Quit Your Job.
Suppose you are so tired of your job that you are ready to quit out of line. To survive, of course, you will need money to cover the costs – but how much?
Unfortunately, quitting smoking is likely to void your eligibility for unemployment benefits, so you’ll need a lot of your savings before you can apply for a layoff or leave. This is why it is not advisable to quit smoking without another source of income, but hey, it does happen sometimes. Here’s a look at how much it will cost.
How much money do you need to quit smoking?
There is no universally agreed number, but personal finance professionals usually recommend spending six to twelve months in addition to your emergency fund . However, if you are a skilled worker, you may be better off with twelve months’ costs, as for some professions the hiring process can take months rather than weeks.
Sure, six to twelve months of spending is a lot of money, but that’s because you most likely won’t be eligible for unemployment benefits if you quit voluntarily, unless it’s “for a good reason,” such as insecure working conditions. Consider also keeping your expenses to a minimum – quitting smoking is much easier if you can save some money, such as moving in with your parents or finding roommates.
Beware of hidden costs
To find out how much you need to save, you need to list your monthly expenses such as rent, meals, and other bills. Don’t forget that you will need to pay extra for health (and possibly life) insurance if you haven’t already. The Obamacare Bronze Plan could cost you roughly $ 300 a month without any subsidies, including a COVID subsidy that brings the cost down to $ 0 if you got unemployment last year.
Another thing you want to consider is the hidden costs of interrupted retirement savings, especially if your current employer offers 401 (k) s with employer approval. A year of no payments can cost you tens of thousands of dollars in retirement savings, which means you will either have to make additional payments later or retire later than originally planned. (Early withdrawals from retirement accounts are also a bad idea, if not for the penalties.)
Bottom line
Try not to quit your job unless you have another job, as you won’t know when you can get another job. If you do decide to do this, try to save enough money to cover the costs for at least six months, if not more.