3 Financial Preparations You Need To Make Before Quitting Your Job
If you’re feeling unfulfilled at your current job, stuck in a toxic work environment, or looking for a career change that will challenge you, here are 3 financial preparations you need to make before you send in your two weeks’ notice.
An emergency fund is money set aside for unexpected expenses and financial emergencies such as unemployment. Before you quit your job, prepare at least three to six months’ worth of living expenses in your emergency fund. Having an emergency fund will give you the confidence you need to live without an income for a few months while you look for a new job. An emergency fund can also significantly reduce financial stress and will ensure that you don’t go into debt while you’re unemployed. The more money you set aside in your emergency fund, the more secure you’ll feel while writing your resignation letter.
If you’re quitting your current job without having your next job lined up, it’s wise to reassess your budget. Your emergency fund may be able to cover your expenses for a few months while you’re looking for a new job but it’s still best to live within if not below your means for the meantime. Just in case something unexpected happens down the road! Prioritize your necessities like groceries, bills, or any debt you may have. Most likely you’ll be cutting down on the “fun” expenses or your “wants” like shopping, travel, or hobbies. Don’t worry, you won’t have to live this way forever! As soon as you find the best offer for you, you should be able to add your wants back into your budget again.
Before you make any major life decisions that may affect your finances it’s important to book an appointment with your financial planner first. Your financial planner knows your current financial disposition, your financial goals, and has a clear understanding of the actionable steps and strategies you need to take to achieve your financial goals. When you quit your full-time job you will lose your main source of income which can potentially disrupt your current financial plan so it’s important to flag your financial planner about this. During a career transition your financial planner will ensure that you’ll stay on track with your financial plan despite the disruption to your regular income, and at the same time, provide you with insights that can really benefit your career shift.
If you don’t have your own financial planner to consult with yet, avail of our financial planning services and work directly with a financial planner trained by the Registered Financial Planners®️ of the Philippines. Our financial planner is ready to guide you in this pivotal phase in your life!
