The year 2021 was marked as the year of Great Resignation. Millions of Americans are quitting their jobs to explore more competitive career opportunities or work for employers that offer a more flexible option to work from home.
As more people these days remain unemployed, a lot of them turn to online life coach services to help them gain a clear understanding of their passions and purposes in life.
Despite countless job opportunities out there, many refuse to quit their dead-end jobs because of financial reasons. If you’re one of them, the best thing to do is to keep your finances in order before making any serious career move. With that in mind, here are ways to prepare your finances before quitting your job.
Grab all the financial opportunities from your job
Resignation is a critical career step that could affect almost every aspect of your life, particularly your finances. That’s why it’s important to be aware of the employee benefits you’re getting from your company before walking away from them.
This means taking advantage of the perks and resources provided by your company before handing in that resignation letter. For example, if your employer offers free access to a variety of training courses or any on-the-job opportunities, you may want to avail of them immediately to help you prepare for your next career move.
Even if your current job doesn’t have all the perks you want, you have to make the most of other benefits before you leave, such as paid time offs, retirement savings, and pension benefits. You may also check out other health-related benefits, such as free eyeglasses, dental check-ups, or braces for your kids.
Get a personal insurance
Employer-based health and life insurance will be a big issue for employees, particularly those whose new employment role won’t cover such benefits. This can be a difficult prospect if you’re raising a family. If you’re willing to sacrifice the insurance benefits to transfer to another company, make sure to look for health insurance to help you factor the costs into your budget.
Getting your own health or life insurance offers more freedom to walk from any job in the future. In turn, you get better peace of mind knowing your family has a financial safety net in case something happens to you unexpectedly.
Avoid getting personal loans
If you end up unemployed for a certainperiod after quitting your job, experts don’t recommend applying for a personal loan unless you have an alternative source of income. This will only add up to your list of monthly payments to cover.
Failure to make regular loan payments can lead to a pile of late fees and a serious impact on your credit score, making it difficult to qualify for future credit or loan accounts. Also, there’s a great chance of not qualifying for a personal loan after quitting your job. Companies have certain requirements for loan applications by taking into account the individual’s debt-to-income (DTI) ratios and minimum income levels. In this case, if your monthly income doesn’t fit into the minimum standards set by leaders, it decreases your chances to qualify for a personal loan.
Consider how you’d sustain a new business
Most people these days are choosing to quit their day job to establish their own business, whether as a solo entrepreneur, a self-employed freelancer, or to just focus on their growing side hustle. Quitting your job as a corporate slave in exchange for something bigger and more self-sustaining is a huge career step, but keep in mind that it also comes with challenges, particularly in handling the finances.
Those who quit their job to start a new business will find it hard to get a business loan, as most startups rarely satisfy the qualification requirements and verification process. For example, lenders award loans to businesses consistently operating for the last one to two years.
If you didn’t qualify for a traditional business loan after quitting your job, you may apply for a credit card. But this option can be a bit risky if you can’t control your spending habits. Ask yourself if you’re in a good position to own a credit card because credit card applications heavily rely on credit scores for qualification. You can also research ways on how to increase your chances to qualify for a credit card application.
Leaving your current company to explore better job opportunities is one of the best things you could ever do for your career. Although it may be a bit risky, the best you could do is to get financially prepared before quitting your job. This will give you a financial safety net as you navigate your next opportunity.