Quitting your job for a life of relaxation and comfort sounds like every employee’s dream. Maybe you are planning on starting a family, taking some time off to travel, or finding a more fulfilling role. However, quitting your current job before you have another one lined up can lead to quite the stressful situation.
Without a plan of action and no cushion to fall on, you’ll end up going into debt as you eat away into your savings. So before quitting your job, ask yourself these questions:
- Why am I quitting this job?
Knowing the objective behind leaving your job and the time period you want to stay away from it are essential first steps in planning accordingly. For instance, if you are planning to take a break so you can find the best job for you, then you may want to can tighten your belt a little and live frugally for a few months till you find your dream job. Or if you are planning to move from one location to another permanently, then you can sell some of your belongings or things you don’t need to make way for additional costs.
- What are my monthly expenses?
Once you have understood why you want to quit your job, the first thing you want to do is to consider your monthly expenses. Include all your major and minor expenses that you will have to make every month. Don’t discount even the ‘small’ Jio or Hotstar payments that you might have lined up. These small payments can often add up to a large number – one that seemed manageable with recurring income, but something a mountain that can seem very large when you don’t have one.
And don’t forget to look into the liabilities side of your balance sheet and check if you have any big expenses that will take a huge chunk out of your pocket. When planning, it’s better to be safe than sorry.
- Do I have enough savings?
This is a no brainer; if you have to quit your job then you need to have some income prepared for the duration of your leave. It is advisable to keep at least 3 months extra (beyond your planned leave from a regular income) worth of expenses aside in advance before leaving your job. Or better yet, 6-8 months worth of extra savings.
If you find that you don’t have enough savings, start building them out today – at least a few months before you quit. The best way to go about this would be to cut back trivial expenses and put those in a smart financial tool like KyePot’s digital chits. This will provide you some reassurance that in case you need to borrow money in an emergency, you’re able to do that at low interest rates.
- Have I cleared all my debts?
If you are ready to give up your monthly income then you should be ready to pay off your debts and credits before doing so. When you don’t have a steady stream of income, the last thing you want is to be paying off debts from the past.
- Do I have other sources of income?
Quitting your job will be easier if you have a side income from other sources. If you have a side-business that provides a steady income or even a freelancing gig that can bring in the cash when needed, then you are perfectly ready to quit your job. If not, then consider investing in group savings which allow you to borrow money when the need arises.
Quitting your job is an easier decision to make if you don’t have a family relying on you. But whatever your situation, make sure you have planned out your finances well and have sufficient amount of money to fall back on when you plan to quit.