New Year, New Job? 8 Reasons You Shouldn’t Quit Right Now
The new year is often a time when we reflect on where we are in our lives and what we want to change about it. And since our work is often a big part of our lives, it’s natural to reflect on your career and whether or not you want to make a change. With so much talk of “The Great Resignation,” you may be tempted to throw in the towel if you’re no longer happy with your job, but this is a huge decision that shouldn’t be taken lightly.
Before quitting your job, consider these reasons why that may not be the best idea for you right now.
You Don’t Have a Financial Plan for What’s Next
You shouldn’t quit your job if you don’t know for sure that you’ll be able to stay afloat without that income.
“Before you consider leaving your job, it’s crucial that you understand both the short- and long-term financial impacts,” said Amy Richardson, CFP with Schwab Intelligent Portfolios Premium. “Take the time to make sure you will be financially secure and able to meet all your obligations, including rent, utilities, groceries, insurance, etc. This may require you to reevaluate your budget and figure out what you need to spend money on — i.e. your fixed expenses, such as housing — versus what you would like to spend money on — i.e. your discretionary expenses, such as entertainment. You may need to reprioritize and tighten up discretionary spending to make sure that you don’t overspend and run out of funds.”
You Don’t Have an Emergency Fund
It’s imperative to have three to six months of living expenses saved up before quitting.
“If you don’t plan on seeking other employment, make sure you have enough in your emergency fund to meet your budget needs,” Richardson said. “You may need to cut unnecessary spending to keep your emergency savings fund at a healthy level.”
You Will No Longer Have Access to Healthcare
“The biggest consideration that you do not want to overlook is the cost of healthcare,” Richardson said. “Unexpected healthcare costs can become a major financial burden, so make sure you factor these expenses into your budget before making any changes in your employment situation.”
Be sure to look into your options to ensure that you will have access to health coverage without your current job.
“Before making the leap, do your research so you know what other options for healthcare coverage are available to you and what the cost will be,” Richardson said. “For example, you may be eligible to extend your healthcare coverage for up to 18 months with COBRA, be added to your spouse’s healthcare plan and/or take advantage of the U.S. public exchange programs. The key is to avoid any surprises when it comes to your healthcare coverage, as it can be a major expense.”
You Are Carrying Debt
Will you be able to keep up with debt repayment if you quit your job?
“Review your debt obligations and make sure that you will still be able to pay them on time — mortgages, student loans and other types of debt are all important to consider before leaving a job,” Richardson said. “In particular, it’s crucial to have a good understanding of your credit card debt. Credit cards often carry high interest rates for outstanding balances, and the interest rates assessed can have a big impact on the total balance that you owe. I like to suggest paying off your credit cards before you leave your job, if possible, and that you spend only as much as you can afford to pay off in full each month. This is key to managing not only your money, but also the emotional and mental impact that carrying debt can have. Remember, debt has many implications on our livelihood other than just the dollar signs we see.”
You Don’t Have a Retirement Savings Plan Outside of Your 401(k) or 403(b)
“Many companies offer employer-sponsored retirement savings programs. These can be very impactful in helping you save for your future retirement years,” Richardson said. “Before you quit or change jobs, carefully consider if you will still be able to save enough for your future through other means, such as contributions to your IRA.”
You Don’t Have Outside Life Insurance
“Something that is often overlooked when making a career move is employer-provided life insurance,” Richardson said. “Often, this is the only life insurance coverage people have. You will want to research options to replace this coverage, as it serves as a good financial safety net for you and your family in case something happens unexpectedly. This is even more critical for those with young children to ensure their futures are financially secure.”
You Don’t Have a Good Reason To Quit
It can be tempting to pull the trigger after a hard day of work or a disagreement with a colleague, but before you do, think this decision through.
“It’s important to take time to evaluate why you are truly considering leaving your job — and be honest with yourself,” Richardson said. “You don’t want to make a decision in the heat of the moment when your judgment is clouded. So, if it seems like you are making an impulse decision that you may regret, it could be a sign to hold off until you’ve had time to seriously consider all the consequences of quitting and are confident about your path forward.”
You’re Already Worried About Your Potential Financial Situation
“If you think you will constantly be worried about money, that could be another sign that quitting perhaps isn’t the best idea,” Richardson said. “In that case, it’s worth thinking about whether there are other, smaller changes you could make to help you feel better about your work. If the desire for greater flexibility, career growth or a more challenging/fulfilling position is driving your decision to quit, consider negotiating with your employer first to see if you can reach an arrangement that works better for both of you.”
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