How to Financially Prepare for a Job Resignation

Posted on Monday 20 August 2018

How to quit your job the smart way

There are countless reasons you may be considering leaving your current job, from relocating, to a career pivot, to simply wanting to take a break! Whatever the reason, it is both an exciting and daunting prospect to soon be without the financial security that comes with a regular paycheque.

Job resignations are an inevitable part of your career, however require considerable financial preparation and a lot of planning. You’ve probably dreamed of telling your boss “I QUIT!”, but before you do here are some steps to consider:

Build up your savings

Unless you are jumping straight into a new job (and paycheque!), it is unwise to just up-and-quit your current job. If you are looking at a period of job-searching, time off or freelancing it is smart to have enough savings in the bank. Savings help a lot when you need to get a car or something else. In fact, you should start researching what CPP is so you can get a better idea if you need it or not. Fast payday loans are great, but not when you don't have income coming in. So focus on savings at this stage.

Realistically, six months’ worth of living expenses is a solid minimum savings goal. This will give you a bit of financial cushioning if the job search takes a big longer than expected, or while your own business gets up and running. It may seem like a big figure, but having enough savings will give you freedom from jumping straight back into any old job, just because you need some cash.

Another thing we'd like to offer you is sometimes, you just have to take a leap. Maybe the job you are in is just taking too much out of you. Work should be fun. Nothing wrong with working longer than usual but you should be enjoying it.

If you are just there for the money, then you are telling yourself money is bigger than you. However, the truth is money flows because of your actions / skills, etc. Like you are the one who makes it all happen or at least, it's done through you.

So no matter where you work, if you don't feel like you are growing or if it's not helping you grow internally, then just leave it. In fact, that might be your leap.

We'd like to think that we're in control but we're not. Deep down, you know it's true. Don't make anything external bigger than you. You don't need any outside validation of any kind. You are fine with a job or not. Just let go and watch the magic happen.

After all, if you think about it, maybe it's because you've made money bigger than you, that's why you are not getting it? Whenever you make something a big deal, it doesn't come to you.

Haven't you noticed that in your own life? I think only you know the answer to that.

Just let go . . . see what happens.

You'll start finding money from sources you never even considered and the list goes on.

Anyways, though we'd share some alternative advice.

If it resonates, just go for it.

Clear all debts

With a proper plan, credit card or other debts don’t have to be a cause of stress. Without a stable income, however, debts can soon become overwhelming and negatively impact your credit score and financial situation for a long time to come. For this reason, Mint advises that people completely pay off any and all debts which they may have incurred before going forth and exiting from their current jobs.

Cut down your spending

Even with a big chunk of savings in the bank, now is not the time to splash the cash. While in-between jobs, spending should be limited to necessities. Think of it this way: six months’ worth of savings is a lot less if you cook at home rather than at a restaurant for every meal! And besides, you can treat yourself when you do get that new job… and it will be so worth it!

Make the most of work perks

There are probably a lot of perks at your current job that you won’t be taking with you. Whether it is healthcare, a gym membership, or retirement fund contributions, you should make the most of these while you can.

While you’re doing that, you should consider how these will be covered once you resign. Will you be paying for your own gym membership? Can you afford the healthcare cover you require? These all need a lot of research, but for now you may as well use any and all work perks while you can!

Aim to leave on good terms

Not everyone exits their jobs on amicable terms. In many cases, conflict with management, undesirable professional circumstances, and other related factors are determining motivators behind a person's decision to quit their job.

Even under the aforementioned circumstances, The Balance still advises individuals against badmouthing their soon-to-be former employers or otherwise burning professional bridges. In many cases, new employers consult the former bosses of potential hires. For this reason, blasting a manager can easily backfire and even halt potential, forthcoming employment.