You may want to quit your job permanently or leave a job you hate.
But before you quit, you’ll want to make sure your finances are stable.
Not only will it help you survive unemployment, but it will also help you focus on finding your next role.
“You want to feel stable and secure so you can achieve what you want,” says Krista Aliga, a Denver-based certified financial planner and senior financial advisor at Personal Capital.
In fact, a survey by Personal Capital and The Harris Poll found that 66% of Americans are interested in switching careers, and 52% said they need at least $50,000 in the bank to be comfortable doing so. The online poll was conducted from July 29 to August 2 among 933 employed American adults.
This trend, dubbed “The Great Resignation,” is being fueled by people reassessing their lives and careers amid the Covid-19 pandemic. Americans are also exhausted. Nearly two-thirds of workers have experienced career burnout, and 41% say it happened in just the past few months, according to a survey by HR tech company Workhuman.
In addition to being financially stable, you should also make sure you’re making the right career moves. Here’s how to make sure you’re ready to say, “I quit.”
Have an emergency fund
If you’re planning to quit without another job, make sure you have an emergency fund that covers three to six months of living expenses, says Aliga. To determine that, evaluate your spending habits. If you’re planning on moving, make sure you factor in the cost of living in that area.
She suggests putting that money in a high-interest savings account so it’s easy to access.
Still, CFP Diahann Lassus, managing director at New Providence, New Jersey-based Peapack Private Wealth Management, recommends setting aside six to 12 months of living expenses.
“If you need money, the last thing you want to do is take it out of your retirement account and pay all the taxes and potential penalties to do it,” says Lassus, a member of the CNBC Financial Advisors Council.
Pay off high-interest debt
If you have a high-interest credit card, start paying it down. Consider transferring that debt to a lower-interest card if possible.
Consider health care costs
If you leave your job without another job, you’ll need health insurance. Evaluate your options, whether it’s a partner’s plan or through the nation’s public exchanges. While you can get COBRA, which will extend your current employer health insurance plan for up to 18 months, it can be expensive.
However, not having any insurance can really cost you. Credit Karma saw its members take on an additional $2 billion in medical debt between September 2020 and April 2021.
Determine Your Desires
From a career perspective, the most important things to figure out are what kind of work you want to do, who you want to do it for, and the salary range, says Vicki Salemi, a career expert at Monster.
“Now is a great time for people thinking about changing careers,” she says.
“A lot of companies are hiring and looking for transferable skills, so you don’t necessarily need experience in that specific job.”
Once you know what you want to do, make a list of target companies and include the type of company, type of work, company size, and revenue.
Be Ready to Search
Create job alerts through career sites so you’re notified when new jobs are posted.
Also, update your resume and tweak it each time you submit a new application so it matches the job description.
How to Negotiate Salary Before You Take a Job
If it’s a large list, pay most attention to the first three to seven tasks and the three to five skills the company is looking for, says Tejal Wagadia, a profession coach and recruiter and career coach based in Chandler, Arizona.
If you’re making a career change, highlight your transferable skills in your summary.
Networking is also important. Reach out to people you know who might be in the industry or company you want to join.
“You’re looking for a fit, not just the actual job but also the company’s values, what they stand for, what their benefits are,” says Salemi.
