5 Financial Moves You Should Make If You Plan To Quit Your Job Soon
Written by
Nicole Spector
Edited by
Molly Sullivan
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There are several reasons for wanting to quit your job. Maybe you are underpaid or overworked or just feeling like this career path is no longer your calling. Whatever the reason may be, you must have a rock-solid financial plan in place before quitting.
What are some financial moves you must make so that you can safely quit? GOBankingRates spoke with financial experts to find out.
Beef Up Your Emergency Fund to Cover A Year’s Expenses
Having an ample emergency fund in place is never negotiable. You need this regardless of whether you’re planning on quitting your job. However, if you intend to quit and don’t have a backup plan for earning money, you’ll need an even heartier emergency fund.
“While many suggest having three to six months of expenses, everyone should save at least nine months to a year’s worth,” said Ohan Kayikchyan, Ph.D., CFP, founder of Ohan The Money Doctor.
Analyze Your Current Budget (With an Emphasis on Healthcare)
Your next step if you’re planning to quit your job is to analyze your current budget and spruce it up to make room for this radical change.
“Consider any costs that must go, and make appropriate adjustments,” Kayikchyan said.
Chances are you’re getting your health coverage through your job. If that’s the case, you’ll need to be informed about how much this expense will cost you out of pocket and adjust your budget as needed.
“What will be your health insurance expenses unless you qualify for either government assistance or are subsidized to get one from the Health Insurance Marketplace?” Kayikchyan said. “Health insurance coverage through COBRA or a spouse’s plan can be something to consider.”
Pay Off High-Interest Debt
You should always be focused on paying off high-interest debt, particularly that associated with credit cards. But now you really need to double down on this.
“It will be ideal to pay off any high-interest debt before quitting and budget monthly payments for current obligations, such as car payments or student loans,” Kayikchyan said.
Align Your Financial Mindset With Your Plan
Alejandra Rojas of The Money Mindset Hub said aligning your mindset with your plan to quit is important.
“Leaving a job challenges the idea of financial security that is socially accepted at large,” Rojas said. “It’s normal that your points of view and behaviors get challenged during this time.”
Put Your Emotions in Check
Before quitting your job, it’s necessary to put yourself in check. This is, in essence, a financial decision. Are you sure you’re in the right frame of mind to make it? Emotions and money do not mix well.
“Identifying and managing the emotions that can lead to poor financial choices are crucial,” Rojas said.
After identifying triggers, make an emotional plan to face situations.
“How would you like to behave in case of something happening, what reaction would you like to have?” Rojas said. “What kind of moves with money would you make? Getting one step ahead of your own unconscious behavior will allow you to manage your funds wisely and get to the vision you want after your job.”
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