Some may quit their jobs impulsively with the dream of new prospects in their mind while some look at it as a solution to pressing circumstances.
With the appraisal time in most organisations being over, the quest to look out for a better job opportunity will again intensify. Some may quit their jobs impulsively with the dream of new prospects in their mind while some look at it as a solution to pressing circumstances. The reason can be anything, but a decision to quit a job without being financially sound might not be a good idea.
Here is how to be financially ready for it:
– Understanding the circumstances:
Before taking such a step, ask yourself these questions:
Do you have another job or an alternative source of income to rely upon?
How long can you survive without a job?
Why is your current job unbearable?
If there is no answer to these questions, then it is a red flag for you. It means that you are not currently prepared to lose your monthly income by quitting the job.
– Status of emergency fund:
An emergency fund will play a very crucial part during financial emergencies. According to a report by BankBazaar, an emergency fund for six to eight months is a must during the days of unemployment. Calculate your emergency fund before putting down your papers. The contingency fund will help you take care of your utility bills, credit card dues, EMIs and rent, among others.
– Have minimum debt possible:
Try and clear off your debts before you quit your job if you don’t have an alternative source of income lined up. Here are two reasons why it is important:
Excessive debt and the pressure of repayment can be very challenging in the days of unemployment. The stress can hamper your ability of rational thinking and will make it hard to look out for a new job.
Irregular loan EMI/credit card bill payments will not only bring down your credit score, it will also fetch you a bad reputation with banks. This will reduce your borrowing potential, making it difficult for you to get loans in the future.