4.4 million Americans quit their jobs in Sept. How much to save to quit yours

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American workers are experiencing an unexpected side effect of the COVID-19 pandemic – the desire to quit their jobs. Whether they’re feeling burned out, dissatisfied, overwhelmed, or underpaid, in 2021, workers have been walking away from their employers and seeking new opportunities in record numbers. “The pandemic has forced us to be alone with our thoughts and to reassess where we are in life and what our personal values are,” said Pam Capalad, a financial planner and founder of Brunch and Budget. If the desire for flexibility, better work/life balance, or frankly, a break from unending pandemic dreariness is killing your spirit, you’ll need to have some savings socked away to do it. And that’s not all. Experts recommend taking a few professional and financial steps before you hit the escape button and quit. 

Quit, with a plan

Do you want to quit tomorrow or in six months? If you can bear your job for a while longer, you can put some financial strategy in place instead of letting your emotions rule. Experts recommend putting your quit date on a calendar to help you shore up your finances ahead of when you pull the trigger. 

“Creating a realistic timeline for yourself can help you get used to the idea of leaving and give you space to really think about your next steps,” said Capalad. “I’ve found that people who do this tend to leave with fewer regrets and are less likely to jump to another job that they may hate.” 

During this time, you’ll want to think about what you’ll want your life to look like and begin to nail down the specifics of what you’ll want from your post-job life.  

“Do you want to take a 6 month sabbatical, work part-time for a year so you can spend more time with your kids or care for an aging parent?” said Sophia Bera, a financial planner at Gen Y Planning. “Do you want to start your own business or take a coding bootcamp so I can find a job in the tech sector? Now is the time to start thinking about these things.” 

Examine your finances

The next step is to examine your current finances and see where you can cut back or prioritize so you can be in the best possible shape when you exit. “If you’re really set on quitting, then try to pay off debt, reduce your recurring expenses, and build up savings so that you’re in a good position and not stressed about money after you quit your job,” said Bera. 

How much should you actually save ahead of your quit date? While the conventional wisdom is three to six months of savings, Capalad says you can drill down on that number to make it more achievable. “People look at the three to six month amount and they say, ‘I can’t do that, it’s too much!’” she said. “Instead think about your bare bones monthly number, the money you need to pay rent or your mortgage, food, and basic bills.” 

On top of your savings, If you’ve got a side gig or you’re able to freelance or have another stream of income, that money can supplement the “bare bones savings” you’ve accumulated before quitting. 

Take advantage of your present job

While you’re planning your goodbye and good riddance, Bera suggests taking a look at the benefits that your present company offers you to see how they can factor into your quit plan. “Many full time jobs come with a ton of company benefits that people don’t realize how cushy those benefits are until they’re not there,” she said.  

Bera recommends taking advantage of everything you can while you’re employed, including maxing out your 401(k), an HSA or FSA, a dependent care FSA, company stock, bonus income, reimbursement for a gym membership or cell phone. 

“It might be worth it to wait until your next bonus hits your bank account or company stock vests before making your exit,” she said. “If you’re a couple, you might want to explore what your partner’s healthcare plan costs are or if you’ll need to purchase a medical plan from healthcare.gov.” 

Think before you quit

When it’s time to go, you know. That said, it’s helpful to think about what it is about your job that you hate so much and if there’s anything that your employer can do to keep you from quitting the job. Bera suggests asking yourself these questions: 

  • Is there a work conflict that could be resolved that would make you happier at work?

  • Am I not being challenged and want to move into a new role? 

  • Do I want more flexibility or to work less while I spend more time with family? 

  • Am I underpaid for my position? 

  • Do I just need a few months off and then I’d return to this job or do I want to switch careers and need a sabbatical first? 

“If there’s any reason that you would stay, it’s worth talking to your boss before quitting, to see if you can figure out a solution that works for you and for the company,” said Bera. “It’s less expensive for them if they don’t need to hire and train someone new at your role.”