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Quitting your job can be stressful. Not only are you a nervous wreck, staring into the mirror, rehearsing the resignation speech you have to give your boss, but your personal finances can cause an entirely different level of pressure during this time.
The questions sound something like this:
“Is this a stable job? Is this a long-term or short-term move? What about my 401(k)? What happens if there is a time-gap in between jobs? A couple weeks? A month? Two? Can I afford a month without income?”
How are you supposed to prepare yourself? What are you supposed to do? Here are a couple tips you should keep in mind if you find yourself on the move.
Budget: The first thing you need to do before quitting your job is figure out your budget. Once you know exactly where you’re spending your money, you can begin to figure out whether or not you may be able to afford an income-gap and how long you can go before you truly feel the effects.
Having a Savings: I think it’s safe-to-say, you need at least six months of savings for a safety-net, just in case. This will provide a small cushion if things don’t work out exactly how you planned. If you’re only relying on your partners income for the time-being, make sure you have the six months of living expenses in the bank.
Stay Covered: Health insurance is a must. Make sure you contact your ex-employer’s human resources department to find out your last date of coverage. Once your coverage is up, you should be available for COBRA health insurance. If that’s not the plan you prefer, you can get individual health insurance. Make sure you do your research… or better yet, call me and I can refer an expert to you!
Your Retirement: If you participate in a company savings program, like a 401(k), you should have the option to roll it over to your new employer or to an individual plan. Find out if-any, and what plan your new employer has in place. It might make sense to send it to your new employer because of a great company match, or it might be better to open up an individual plan. Weigh your options and don’t be afraid to ask questions. This is your livelihood!
Go With Dignity: Make sure not to burn any bridges on your departure. What if you absolutely dread your new job and want your old one back? You don’t want a fiery storm or grand-exit like in the movies. Just remember to be professional.
Ensuring that you’ve covered these basic steps when preparing to quit your job will take help to ease the anxiety during this high-stress time. Knowing that you’ve prepared yourself financially will help remove the burden from not only your shoulders, but your partners as well.
If you’re thinking about quitting your job and have questions on what other steps you should be taking to better prepare yourself, just give me a call. We’ll make sure there are no loose ends!