Are you contemplating leaving your job? There are a lot of things to consider before submitting that resignation letter. Here are 5 financial strategies that you can implement prior to leaving your job.
1. Have a Plan
So, you want to resign from your job, okay…regardless of what led you up to this point you must have an action plan. How will you supplement your income? Will you be working another position? If you are leaving to pursue another opportunity, then great! Ensure that you have a firm offer letter in hand and that your new employment is guaranteed. Are you willing to work odd jobs to supplement your income if need be? If your other job doesn’t pan out, you will need to ensure that you can still make ends meet. This may require you to dig deep and hustle whether it’s delivering takeout orders or joining a ride share service. Will you be going to school? In some cases, you can receive funding to supplement your income if you are a full-time student. These are all important questions to ask yourself before you submit your resignation. Unless you have an abundance of financial resources at hand to where you don’t have to work, it isn’t the smartest decision to leave your job on a whim.
2. Establish a Healthy Savings Account (6 Months of Living Expenses)
Having an established savings account is paramount. It is recommended to have at least 3-6 months’ worth of living expenses to float on in event of an emergency. If you are leaving a position without anything lined up, ensure that you are taking the proper precautions to guarantee your bills continue to get paid. If not, perhaps you should hold off on resigning until you have saved up enough cash to protect you in an emergency. There are so many easy ways to save money, some save between 10-20% each paycheck until they reach their goal. There are also apps out there that will round up what you spend and automatically save it for you. Whichever method you choose, do yourself and your family a service by having some emergency savings.
3. Pay Down Debts
Before giving up guaranteed income ensure that you pay off as much high interest debt as possible. Interest alone can skyrocket a monthly payment and it can cause a lot of uncertainty. If you have a high amount of debt you can check out what your options are for consolidation. There are various personal loan services out there that will pay off your credit card debt and guarantee a low interest rate as well as flexible repayment options. You can utilize the debt snowball method where you put larger payments toward your lowest debt amount and minimum payments to your other debts or you can use the avalanche method where you pay as much as you can toward your highest interest debt and pay the minimum on everything else. Devise a plan and stick to it, you don’t want to be stressing about paying off a debt that is only accruing more interest when you can sacrifice for a little bit and get rid of it completely.
4. Reduce Unnecessary Expenses
One of the best things you can do for yourself in preparation of leaving a job is to take a close look at your spending. Are all those shopping trips necessary? Probably not. In effort to save as much as you can and become a conservative spender you may want to consider a bare bones budget. This budget focuses solely on necessities, and if you must include some guilt-free spending money please do so because you know yourself and your habits best. If you want to succeed financially one of the best things you can do for yourself is create and stick to a budget.
5. Understand and Take Advantage of Employer Benefits
If you are currently enrolled in savings or investment options with your current employer, you may want to check to see if they can roll over to your new position. Will you be penalized if you make any changes or lose any of your contributions? These are important things to inquire about so that you can prepare. If you are currently insured by your employer, take advantage of that, and get as many checkups as you can, refresh and refill all your prescriptions and try to get an ample supply to last you for as long as you are able to. Prescriptions and doctors’ visits are expensive, so please take care of your health while you are covered.
Bonus Tip! Always Leave on Good Terms!
You never know where life may lead you. Your new position may not work out and you may want to come back to your old job. Do you think that you would be a candidate for rehire based on how you left? It’s a great rule of thumb to try to leave your position better than it was. If that includes creating written standards of procedure for how you completed certain tasks or training a colleague so that your duties can still be continued in your absence, then do so. It may require some extra legwork on your end when you were trying to coast during your last days, but your coworkers will appreciate that effort. Besides, you never know who will be across the hiring table in the future.
Set yourself up for success and take these tips into consideration before you leave your current position.
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