Financial Considerations Before Quitting Your Job

Financial Considerations Before Quitting Your Job

Are you thinking of quitting your job? Before handing your resignation letter to your boss, know that it would have serious consequences on your personal funds.

When employees resign, they tend to overlook the possible results of being jobless. They are eager to leave their jobs without considering the struggles they may face afterward. This includes lack of funds, stress, and sometimes, regret.

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Quitting your job is a major career shift. You need time to think about your decision. Weigh the pros and cons of staying with your employer and letting go of your job. To help you with such big step, here are some things to consider financially.

1| Receiving a Better Salary

Global advisory company Willis Towers Watson studied factors when deciding whether to resign or stay in a job. They found out that seven in 10 employees in the Philippines consider higher pay as the most important element.

Also, according to the 2017 Happiness Index Report of JobStreet.com, 33% of Filipinos find themselves happier at work when they receive a pay raise.

The statistics above depict that money matters when it comes to career decision-making. You would want to work in a place where the grass is greener. It may be in a company with a better and higher salary offer, a start-up business, or a freelancing career.

There are reasons you can justify as to why you’re quitting your job but consider the money you won’t be receiving afterward. If you’re resigning because you have issues at work, talk to your manager and try to resolve those matters. This may enlighten you and give you better reasons to stay. But then again, if your choice didn’t waver, then it’s time to pack your bags and go.

2| Experiencing Work Pressure

Other than salary, there are more situations in the workplace which can prompt your decision to leave. Circumstances like sexual harassment and toxic work culture are also prime considerations why one resigns from work. These often lead to stress and inability to perform tasks well. These can also result in a person’s emotional and health problems.

3| Saying Goodbye to Company Benefits and Perks

If your company offers employee benefits like HMO, life insurance, company-issued car or smartphone, paid leaves, and travel opportunities, among many others, you might as well keep your job, especially if other employers won’t offer such perks.

4| An Immediate Job Offer after Resignation

Do you have a job waiting for you the moment you leave your current work? If none, it is not the best time to resign, especially if your family depends on your monthly salary.

Most companies in the Philippines require employees to render a 30-day resignation notice. After resigning, finding and landing a new job can be difficult. A month of attending interviews isn’t enough to acquire a new position. Secure yourself by looking for a new job several months before resignation. The chance of getting a job is low when you’re unemployed. Contrary, finding a new job is easier for employed people, as according to research.

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Planning to be a full-time entrepreneur? Work hard to make your business prosper because that’s the only time you can quit your corporate job. Keep your revenue steady and focus on sustaining the customers’ fondness for your product.

5| Having Enough Savings

Enjoying your free time after resigning is a good idea. Seize your well-deserved rest as you travel and unwind. Do all of these to reward yourself for years of hard work in the company. However, you can only make these things happen if you have sufficient savings on your account. Once you get a job, save money again.

Most employers will grant you a back pay a month after your resignation. Unfortunately, they will also hold your last salary. These funds are usually released upon clearance from HR. Thus, receiving your final payment by the time you resign is quite impossible. You would have to wait.

To ease the distress of sustaining your finances while you’re jobless, save 6 to 12 months’ worth of daily expenses. Deposit it in your savings account or checking account where you can access it easily when in need.

You should also cut down your daily expenses to prolong your remaining funds.

6| Setting a Resignation Date

Everything should be timed right. If you arrive at a decision that will truly make you leave the company, set a definite date for your resignation. But, before doing this, assess its effects on your income and spending. Make sure you’re armed to the teeth.

Say, for example, you’re a single parent who provides and manages finances in the household. Resigning a few months before school starts might ruin your budget. You can prevent this from happening by allocating money for your child’s tuition.

Take note: Most employers will pay back your unused leave credits. Most employees are also entitled to receive a lump-sum early retirement package. Delay your resignation date if these are the cases.

7| Avoiding Major Expenses

Do not purchase expensive assets like a car or a house when you’re jobless. Yes, you have the means to buy such properties but doing this won’t help your budget. When you quit, make sure to find a job that can cover your monthly housing loan or auto loan repayments.

There is another consequence when you leave your job without deep thought. You may not get approved when you apply for a loan. Pag-IBIG Fund, SSS, banks, and other lenders require payslips and tax returns to ensure that you can pay off your loan.

Staying in the company proves that you have a stable flow of income, which is important when applying for a loan or a credit card. Think things over and you still might consider sticking with your current employer.

8| Effect on Your Loved Ones

Your resignation can affect your family’s finances, especially if you’re the breadwinner. The conflict boils down to the problems your family may encounter once the household income decreases.

Explain to them your current work state. Be open to them regarding the possibilities of you leaving your job. Talk to them about cost-cutting measures that the family should follow.

If you’re still single and do not have anyone to support, resigning from work can also be bad for you. Do you still live with your parents? Are you going to depend on them after quitting your job? It’s a bad thing to be dependent on their funds, especially if they’re not well-off. Even if they’re financially secured, the last thing that you want to happen is to be a financial burden to them.

After reading the factors above, are you ready to face such consequences if ever you’re unprepared once you resign your job? Or have you secured everything in order to survive the unemployed life? Resigning from work shouldn’t be a sudden decision. Think it all over.

John Joshua Mascariñas is a Junior Content Writer at MoneyMax.ph, the Philippines’ most comprehensive online platform for comparing financial products.