Here’s how to know if you’re ready to make the leap.
With the pandemic restrictions easing at last, we’ve seen an expected drop in the unemployment rate. But interestingly enough, there’s also been a rise in people quitting their jobs voluntarily.
Nearly 4 million Americans quit their jobs in April, according to a U.S. Labor Department report. Some just don’t like their jobs. Others think they can find better opportunities elsewhere now that more businesses are reopening their doors.
The idea of higher pay and more flexibility is certainly alluring, but quitting your job isn’t always a wise financial decision. Here’s how to decide if now is the right time for you to begin your next job hunt.
Make sure you know how you’ll pay your bills
Quitting your job means cutting off your primary — and often only — source of income. That can create enormous financial pressure on you and your family if you don’t have some sort of backup plan in place.
There are a few ways you can ensure a smooth financial transition from one job to the next. First, you could wait to quit your job until you have a new one lined up. This is probably the best strategy for most people unless you have an immediate reason you need to leave your job.
You could also beef up your savings and rely on this while you look for a new job. It’s up to you to decide how much money you should have set aside. It may only take you a few weeks to find a job, but it’s a good idea to have at least three months of living expenses saved up. If there aren’t that many job opportunities in your field, you may want to save six to 12 months of living expenses to be safe.
Weigh the pros and cons
With so many companies looking to hire right now, many are offering new signing bonuses and other employee perks to attract the best talent. It’s important to weigh all these factors when considering whether switching employers is the right move for you right now.
Salary is the primary concern of most people. This is a good starting point to help you narrow down the jobs you might be interested in. But it shouldn’t be the only factor you consider when evaluating a job offer. To help a job stand out over its competitors, look at:
- Insurance
- Retirement benefits
- Time off
- Work-from-home flexibility
- Bonuses
Consider the whole package when deciding which one is right for you.
You also need to weigh the cons of changing jobs. It means you’ll have to go to a new company and learn all of its procedures. It could mean leaving coworkers or clients you enjoy working with. For some, it could even mean picking up and moving their lives to another town or state, depending on where the job is located.
Make a list of all these pros and cons for any job that interests you and decide whether you feel the benefits outweigh the drawbacks. If not, it might be worth staying in your current position until something better comes along.
Think about the long term
Keep your long-term plans in mind when comparing job offers. If you prefer to minimize the number of times you switch employers over your lifetime, you should look for a job that offers plenty of advancement opportunities.
If you have a plan to start your own business someday but aren’t quite ready to take the leap, look for a job that can help you learn the skills you need to one day strike out on your own. For example, if you want to start a blog someday, you’ll need to learn about search engine optimization and affiliate linking and how to write well. So look for a job that offers you opportunities to practice these skills and learn from others who are more experienced, even if it’s not exactly what you want to do forever.
Just because there are other opportunities out there right now doesn’t mean they’re necessarily right for you. Switching jobs is a big decision that could affect your personal finances now and far into the future. Think through the information discussed above before deciding what’s best for you right now.