You may be contemplating to quit your job. But it’s not an easy decision as it will have a huge impact on your personal as well as financial life so don’t make hasty financial decision that turn out poorly. It does not mean that you are not intending to work but you think you want to move on. If that is the case, then give yourself some time to think it over. Make sure that it’s the right choice and you’ve exhausted all your other options. If you decide to go ahead and quit. Then, take a deep breath. You’ll get through this, though it may appear pretty gloomy at the moment.
In fact, quitting a job may actually turn out to be an opportunity to land a better job or a new career. In that case, your financial planner professional can help you sort out your alternatives while structuring a plan around your short and long-term goals. Early key moves and decisions can make the difference between surviving financially until you’re successfully employed again, perhaps even surviving comfortably and making financial mistakes that could jeopardize your financial well being for years to come.
Psychological Trauma
Whilst quitting job, firstly you may have to be confronted with your boss, for a reason unbeknownst to you, have taken away many of your responsibilities. You would be treated like the invisible man/woman and are not included in important meetings. It may be very stressful and it may be giving you headaches, backaches and insomnia. Quitting job stress can cause all these symptoms which can lead to even more serious health issues. If you can’t work out the problems, you have to put your well-being first. There isn’t any job worth getting sick over. Because you quit your job your life will change in many ways, some for the better and some for the worse. You must have to be sure that you won’t have to deal with a difficult boss anymore or a job you don’t like, but you will have a whole new set of challenges.
Announce Publicly
Now, it is not time to be shy or embarrassed about your quit job. Announce it to everyone you know: friends, colleagues, old high school chums. Especially, tell your children and spouse or other family members who depend on you financially how the job loss will affect family spending. Ask them for budgeting suggestions. This can help ease anxiety they may have, especially if you have to make a major change such as moving.
Join or make use of a trade association membership to circulate your resume and learn about jobs. Because, quitting a job may be a good opportunity to reassess your career. Other job sources include the newspaper want ads, online sites, professional job search services, government employment agencies, job fairs, and job-hunting services offered by your former employer. Your former employer may even have openings in other departments or divisions.
Review your employee retirement benefits
See what benefits are promised to departing employees from your employer. Make sure that what your company pays you for unused vacation or compensation time, and perhaps a pro-rated year-end bonus, especially if you’re near the end of the calendar or fiscal year. Learn what fellow earlier left employees have been offered. So in the immediate wake of your quitting job, don’t cash in your retirement plan, sell off long-term investments or move until you’ve worked out a realistic plan for dealing with your reduced income. Your employer may offer upgraded package, probably before you leaving the job. This package typically may extend your salary and perhaps benefits for a certain rupee amount or period of time.
Don’t sign on the dotted line until you take it home. We recommend that if you get any offer in writing and don’t sign it immediately. Take it home and review it closely.
Maintain Your Health Insurance Coverage
When you quit your job, your employer will stop paying for your group health insurance cover. Incurring major medical bills without health insurance would be financially disastrous. To maintain existing health cover, consider the option to be able to convert a group health insurance or term life policy at work to individual coverage. You may have to pay the additional premiums but it’s important to continue these types of insurance. Otherwise, you must find it less expensive to buy a short term health plan or high-deductible catastrophic policy on your own.
Develop an emergency spending plan
Like many people you may be struggling, with limited finance resources, to balance your job and your family regular expenses. Your limited sources might include leave encashment, gratuity, and superannuation and funds from a cash emergency account, a working spouse’s income, or perhaps temporary work. To cope up the paucity of fund, you may rent out a room in your home or take in a roommate or more drastically can move in with relatives or a friend and rent out your home or sublet your apartment, if the lease allows that.
Prepare the list of expenses in order of priority: mortgage or rent, groceries, utilities, car payments, transportation, insurance premiums, clothing and so on, down to the least important discretionary items. Don’t forget to include expenses such as resume preparation, job-hunting transportation, education or retraining, and so on. On the other hand, you may be able to temporarily reduce some expenses such as childcare and transportation because you’re home.
While subtracting all said expenses from your income, you still need to cut more to balance expenses with income, consider such strategies as deferring any major purchases you were planning, refinancing your mortgage, shopping for less expensive insurance premiums, reducing eating out, swapping child care services with friends, and talking to creditors about delaying or stretching out payments.
Short-term Investment Decisions
In tough times, the temptation is to become more conservative with investments. Some movement into more liquid assets and cash may be called for. This certainly isn’t the time to take hasty decisions on some hot stock in the hopes of generating a quick profit to help make up for lost income. However, investing should be for the long term, while your unemployment, hopefully, will be only short term. Consequently, try to avoid selling stock in a panic. Often this results in selling during a down market at a loss, and perhaps incurring taxes on capital gains that you can’t afford to pay or that eat away at spendable cash.
You may reduce or stop contributions to retirement plans such as PPF and EPF temporarily, if absolutely necessary. You may need to cash out some or all of your EPF funds to help pay for living expenses during this difficult time, but do not withdraw all funds already in your retirement accounts.
Moving On
Once you have come to terms with all matters emotional and practical, it is time to move on. You must decide where to go from here. First you must look at why you quit your job. Was the company downsizing? If so, is this a trend in the industry? Do you want to stay in the same field? Is a career change in order? If not, maybe this is a good time to blow up some skills in order to make you more marketable. Before quitting job, you should consult a qualified financial planner, such as a CFP professional, can help you assess your unemployment situation, suggest strategies for conserving your financial resources, and perhaps most importantly, help you avoid costly mistakes that could harm your personal finances and your ability to find a good job.