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6 Money Moves To Financially Prepare for Quitting Your Job

It may already be 2022, but The Great Resignation Wave is still going strong globally, even in Singapore. In fact, some Singaporeans are so burnt out at work that they are willing to get into debt just to quit their jobs. While it may be tempting to do so, hold your horses and ask yourself if it is wise to do so.

Although it may feel empowering to tell your employer “I quit” on a whim, here are 6 money moves you should take to ensure your financial stability before you quit your job.

1.   Pay off your credit card debts

The last thing you’d want is to find yourself in unemployment and saddled with debt. If you are thinking of resigning, aim to settle your credit card debts first. By doing so, you can work out whether you have enough finances for you to boldly bid goodbye to your employer. If you find yourself having inadequate cash flow after paying your bills, maybe it’s time to reconsider putting off your resignation by a month or two just to stabilise your financial situation.

Although you can temporarily switch to paying the minimum credit card sum per month until you secure a new job, keep in mind that you will leave a balance that will be carried over to the subsequent credit card billing cycle. Additionally, the bank will charge you high interest on the overdue amount plus the outstanding balance.

If it seems unlikely for you to settle your credit card bills, cancel them instead.

2.   Get insured

With the ongoing pandemic, health coverage should be the number one priority on your list. If you are unemployed and do not have health insurance, this could mean paying out of your own pocket if something happens. Avoid the possibility of putting yourself in medical debt by getting insured, so you can achieve peace of mind.

Just getting started on insurance? Fret not, we can help you decipher the differences between whole life insurance and term insurance so you can make a well-informed decision on which to get. If you are accident-prone, you may wish to invest in a personal accident plan to help you manage the risks.

3.   Don’t rely on personal loans

If you are thinking of getting a personal loan to tide your finances over, think twice. Instead of solving your cash flow issues, you may find it tough to make your monthly payments. To make matters worse, missing a payment means you will incur late fees, which could affect your credit rating and your ability to secure future loans or credit accounts.

4.   Track your finances

Your spending habits pre-COVID and now may have changed drastically. For instance, during the work from home period, you may have cut down on eating out and garnering substantial savings. If you are still working from home, see if you can keep up with this habit. Returning to the office? Here are some money-saving tips.

Of course, with things gradually returning to normalcy, do not assume that your spending habits will remain the same as 2021. Instead, start tracking your finances with Planner Bee, an easy way to track your expenses and assets across paper and digital statements.

5.   Ensure you have enough living expenses

By tracking your finances and looking into your spending habits, you can then gauge whether you have enough to comfortably resign.

The best way to work around this is by starting small. Begin planning your personal budget by working out how much you spend each month. You need to know where your money is going.

Create a list of all your regular expenditures, including shopping, food, monthly subscriptions etc. Decide whether you can cut back on any of those expenses – for example, do you really need that Netflix subscription?

Planning to quit your job without another offer can be challenging, but distinguishing your needs from your wants can help to ease things a little. Once you have worked out the amount you need every month, multiply this sum by a minimum of 6 months to ensure you have ample living expenses to survive on in the worst-case scenario that you are unable to quickly gain employment after this resignation.

6.   Get ready for a new job

Quitting without another job offer could mean that you won’t have steady income for a while. As such, you should think of ways to make some extra cash. This could include taking on a side hustle while you look for another job.

Remember that job hunting takes time, so start updating your resume as soon as you can! You can also tweak your resume according to the job’s required skill sets. Also, many career websites allow you to create job alerts so you get notified when there are new jobs. If any of those jobs pique your interest, don’t hesitate to apply.

Plan before you quit

While work burnout is real, take some time to sit down and plan whether resigning now is the right move. There are always unknowns when you are between jobs, with the unpredictable economy and job market. A break can allow you to recharge and think of your next steps, but it can also leave you wishing you had a job to pay your bills. Make sure you have a plan before resigning, so you don’t overstretch your finances before you are ready for this big transition.

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