So, you are thinking about quitting your job. Whether this has been on your mind for years, or it has recently taken hold of your imagination during the pandemic, you are joining the millions who are entering what is being dubbed as “The Summer of Quitting” or “The Great Resignation.” I get it. I’ve done it. But I also made mistakes, and I would do things differently. If you are considering making a big move, these are the five steps to take before you quit your job.
If you need to move, do it before you quit your job.
There is no doubt that I should have moved before I quit my job. I was shouldering a significant rent payment each month, and while I had substantial savings, that monthly rent check took a big chunk out each month. When I realized that my next work chapter was likely to involving freelancing, I knew I had to move. But I couldn’t. Why? Because I didn’t have a guaranteed income. Yes, the savings helped, but management companies and landlords want to verify that you can pay the rent.
You would think that after all the outward migration, city landlords would be excited to get you into their vacant apartments. Alas, not so. In fact, the pandemic, and the resulting financial upheaval, means that landlords in big cities (like Los Angeles) are actually even more likely to institute tighter financial requirements. I keep seeing “must have 3x the rent in income” on rental listings. So, even though some are offering “1 month free” as an incentive, they are very picky about who they choose as tenants.
Bottom line: if you know that your finances are going to take a big hit, move while you have proof of income.
Empty the storage unit.
As I mention in an early blog post, if you quit your job without having another one lined up, you need to downsize your monthly costs as much as possible, as soon as possible. If you can do it before you quit, that means you will be able to add more to our “quit the job” savings account. Unless you absolutely need a storage unit to house family heirlooms that don’t fit into your current (or near future) living situation, it’s time to unload it. Storage units are a significant drain of cash. Often billed automatically, you are saying goodbye to $100 or more every month to store things you don’t use. You may not even know what is in there. Do an inventory. Sell the things that can help build your savings. Donate the items that are useful but not worth selling.
Stop unnecessary recurring credit card charges.
After you get done reading this blog post, sit down with your credit card history and figure out where the money is going every month. When I quit my job, I realized that I had subscriptions to online newsletters and magazines that I never read but paid for automatically each month. I realized that I was paying for streaming services I rarely watched. Were they huge bills? No. But $10 here and $20 there added up to a lot of money going out the door every month for things that I didn’t want or use. Start canceling those recurring credit card charges now and free up that cash for something you will actually want or need down the road (in fact, do this even if you aren’t preparing to quit your job).
Get that business loan now.
About a year after I quit my job, I realized that I wanted to pursue a screenwriting/writing career. I was also enjoying producing small projects again. I had a film company, and what I really needed was a cash infusion to seriously focus on it, option projects, and maybe hire someone to move the company forward. I talked to my bank manager about changing some accounts, and she asked if I needed a business line of credit or thought about commercial loans. For a good 20 seconds, I was very excited about the possibility. And then she found out that I didn’t have a job. Without the guaranteed income to pay back the loan, the process of getting a “start-up” loan was going to be much more difficult.
Yes, it makes very little sense. When I worked insane hours and had no time to pursue the business, I could have gotten the lines of credit or a loan fairly quickly. But once I had time to spend on the project, not so much. If you are thinking about starting a business or putting more resources into an existing side gig (or dream career), apply for the loan now.
Make those doctors’ appointments before you quit your job.
Before you quit your job, take peak advantage of all the benefits you have. If you have robust health insurance, dental insurance (oh the luxury), or a medical savings plan, make use of it now. While you should never be without insurance, your reduced income may mean that you have to increase your deductibles on your private insurance. I get it. We’ve all done it. But that means that you should get all of your annual checkups done now. Get those teeth cleaned and fillings done. Use your medical savings plan to get an eye exam and new glasses. Whatever you need to do, do it before your out-of-pocket costs rise. And if you land in another job that has terrific health benefits, that’s great. And you won’t have to stress about getting that root canal when you have only been on the job a week.