Financial steps to consider before quitting your job

Money is the major motivator for employment for everyone, some manage to make money while following their passion while others work solely for money. Either way, we’ve all had those days when we just want to quit our jobs but the “bill due” slip on our desks stops us. Most Americans live paycheck to paycheck, making it difficult to leave their current employer. All things considered, it might take them decades before they make the move to quit. According to a recent survey conducted by Personal Capital and the Harris Poll which surveyed 933 employed adults, 66% said that they are interested in switching their jobs and 52% said that they need at least $50,000 in their bank accounts to do so. However, fear not, according to experts and financial strategists, by following these simple steps you can go ahead and hand in that notice comfortably.

Emergency/Comfort Fund:

An important aspect that most financial advisors fixate upon is having some emergency fund. The best way to do this is to continuously maintain an emergency fund in a high-yielding savings account. Money expert Delyanne Barros says that having enough to cover your payments for the next 6-9 months will ease your financial panic, because of this fund you will not have financial pressure weighing down your life decisions. 

Get the most out of your current job:

Many of you might not know this but you can secure most of your finances from your current job itself. Financial support doesn't just mean having funds in a bank, it also includes making sure that future expenses are taken care of. Make sure to review your current benefits thoroughly, most of the time there is a chance that you might be able to retain certain provisions like employer-related health insurance coverage, retirement benefits, etc. It is very important to keep in mind to negotiate a substantial amount as severance pay, this will go a long way in financing your next few months. Your company also pays for and provides on-the-job training and skill enhancement assessments, before you leave make it a point to make use of all these perks to uplift your portfolio. 

Health care costs:

An immediate concern or pain point for people considering quitting is insurance coverage. As mentioned before, one of the perks of employment is health insurance which is paid for by the employer. Losing benefits immediately is a concern for many, especially those who rely on it regularly. However, fear not because there is a chance that you can get your coverage extended for a few months or retain it partially. This is why it is very important to go over your contract; also price out all your options, whether it is getting a new insurance package, going on your partner’s plan, or even other national public exchanges. Map out your options and choose the best one. Although you can get a plan through the Consolidated Omnibus Reconciliation Act or COBRA, which extends your current plan for up to 18 months, it can be an expensive option. 

Pay off High-Interest Debts:

When asked about what stopped them from quitting their jobs, one of the first responses that Americans gave was that they have debts to pay and this is a very relevant concern. Therefore, many experts suggest that you handle your debts before quitting; this does not mean paying them all off, if possible then do pay off time-bound debts. Otherwise, start by paying down high-interest debts like credit card bills, you can also transfer the debt to another card with lower interest rates. 

Buckle up for job search:

We all remember the situation before we had a job, constantly applying to vacancies and getting rejections, most of us put up with our current jobs simply because we do not want to go through that hassle again. There is no easy way to say this but get ready to do it all again. Now that you have some experience you can get ahead of the curve, make sure to have job alerts set for all the openings in your preferred field. If an alert pops up do not wait to apply. Keep your resume ready and handy every time, make changes or tweaks to it depending on the job you are applying for. 

There you go! By following these simple planning tips you can now take that leap, hand in that resignation, and work towards fulfilling your passion. 

Sources:

CNBC

Forbes