Before Quitting Your Job, Make Sure You Do This
It used to be that people talked a lot about feeling resigned when it came to working jobs they didn’t like or didn’t want. But nowadays the talk has turned more to handing in resignations, owing to the COVID-19 pandemic and workers reevaluating their work and career choices.
According to the U.S. Bureau of Labor Statistics, nearly 4 million Americans left their jobs in June 2021 alone. Surprisingly, many who left jobs or are planning to quit don’t even have other jobs to go to – they just want out. Out of the office. Out of the dead-end career track. Out of the rat race. And into a different way of living and working.
If you’re thinking of leaving your current job and you don’t have another job lined up, consider making the following financial moves before you tell your boss “I’m outta here.” The more solid your current and financial plans are, the better prepared you’ll be to pursue the kind of work – and lifestyle – you want.
Line Up Health Insurance
Although you won’t have health insurance as an employment benefit anymore, you can enroll in COBRA, which allows you to continue coverage under your employer’s plan for up to 18 months. But there are two caveats: COBRA is expensive, and you’re not eligible for government-paid COBRA premiums if you voluntarily leave your job. As an alternative, check the federal health insurance marketplace. You can find a variety of health plans offering multiple coverage levels at different price points.
Roll Over Your 401(k)
If you have a 401(k) through your employer, you might be tempted to cash it in when you leave your job. But making that money grab isn’t the best idea, as you’ll incur penalties and taxes while also reducing your retirement savings. A better plan of action: Leave your 401(k) account as is until you get a new job, then roll it over into your next employer’s 401(k) plan. Considering the self-employment route? Roll your 401(k) money into an individual retirement account (IRA).
Reduce Your Monthly Living Expenses
A significant change in your monthly income might necessitate taking a closer look at how you can reduce some nonessential bills, including cable, takeout meals, streaming services, subscriptions, grocery delivery service, and the like. In addition, you could save hundreds of dollars annually by reviewing your car insurance and homeowners insurance policies. By shopping around for the best deal, you can ensure your coverage is sufficient and that you’re not being taken for a ride financially. The website Insure.com lets you compare car insurance prices and options just by entering your ZIP code and age.
Beef Up Your Savings Account
Financial experts recommend that you have enough savings on hand to support yourself for several months, with enough money to cover six months being optimal. Before you leave your job, consider funneling some of your current income into a separate savings account that you can tap into once you’re unemployed. With the Aspiration account, you can earn up to 20 times the average interest on your savings balance; the FDIC reports that the average account earns just .05%. An Aspiration account, like most savings accounts, is FDIC-insured.
Look Into Other Income Sources
These days, side gigs are plentiful – you just need to decide what you’d like to do, and where to look. Consider employment options such as elder assistance, contact tracing, food delivery services, Uber, freelancing, and homeschool assistance, just to name a few. You can also look for work-from-home gigs such as InboxDollars, where you could earn up to $225 per month just for watching news clips and then answering a few questions about them. In effect, you’ll be getting paid to simply watch the news.