By Sebastian Francis
The Great Resignation, also known as “The Big Quit,” is a recent trend of many workers retiring early or simply quitting their jobs to look for new ones. According to a US Labor Department Government report, over 20 million people resigned from their positions in the second half of 2021 alone – the most significant number of people leaving their jobs in US history.
After months of being at home and reflecting on what is truly important in life, many people are rethinking their long-term plans for work and pondering what they want to do in life. This introspection has led many people to quit their jobs to pursue a different career, lifestyle, or a new locale.
Many workers across the United States have flocked to cities like Salt Lake City, Austin, and Jacksonville, Florida, moving from big cities such as New York and Chicago to smaller cities with lower rent and lower living costs. However, these smaller cities still have job vacancies, suggesting that many workers are a lot pickier in choosing a new job. It is clear that employees are much more concerned with their well-being and quality of life, and value more than just their pay.
At Savvy Ladies, we are here to help you make informed decisions at critical junctures in your life, especially as they relate to big financial decisions such as changing your job. If you are considering joining the twenty million people who have purposefully quit their jobs during the pandemic, here are a few things to consider before, during, and after your own great resignation.
Financial Tips if you plan on joining the Great Resignation
There are some big dos and don’ts when resigning from your job and planning a move into a new field or other company.
- Make sure your financial plan supports an early retirement or a change in salary. One of the singular most important things to remember is that you will not be putting money into your savings, 401K, or social security if you take a break from your job. This can affect your long-term financial security.
- Increase your emergency fund reserves before you leave your job. One of the most common mistakes when leaving a job is not planning. Build up your emergency reserve funds and understand how long these emergency funds will last without your normal income. Without this planning, you may be forced to use high-interest credit cards or take money out of your 401K to fund your living expenses. When withdrawing money from a retirement account, there is a 10% penalty if you are younger than age 59 1/2. In addition to paying this stiff penalty and taxes, you will lose out on the growth of these funds in the future.
- Revise your budget. Consider what expenses will decrease or can be eliminated entirely. Costs for work clothes, commuting expenses, and lunches should all fall significantly. Look for other areas in your budget where you can reduce spending. Several bills will increase, such as medical, dental, and vision-care insurance. Without the help of your employer, you could be spending upwards of $1,000 a month on these insurances.
- Don’t leave money on the table. Understand what compensation you are entitled to if you quit (such as back pay, sick pay, or vacation pay).
- Boost your earning capacity. Consider boosting your skill sets to command an even higher compensation package at your next job. Options to increase your salary can range from volunteering to going back to school for extra certifications or even, in some cases, a new degree.
Written by Sebastian Francis, son of Savvy Ladies’ Founder Stacy Francis. Sebastian is a high school student and is following in his mother’s footsteps to bring financial literacy awareness to women in need.
Do you have any financial questions? Contact the Savvy Ladies Free Financial Helpline today and get free mentoring from a financial advisor.