MINNEAPOLIS — Have you ever heard the saying, "life is too short to stay at a job you don't love?" Now millions of workers across the country are taking that to heart and leaving their current jobs for new opportunities.
But before you march into your boss's office with your resignation in hand, there are some financial factors to consider to make sure your pursuit of a dream career doesn't turn into a nightmare for your bank account.
A recent report from the U.S. Labor Department said that 4 million people quit their jobs in April, breaking a 20-year record. More than 740,000 of those people worked in leisure and hospitality industries.
Another report, conducted by Monster.com, found that 95% of workers reported they're considering changing jobs.
There are many factors playing into people's plans to rework their jobs and their lives. Burnout from working long hours during the pandemic and a reevaluation of work/life balance are two things workers say are prompting the change.
Whatever the reason, Justin Halverson from Great Waters Financial says you need a have a plan in place before you leave your current job.
"If you are going to make that move, you have to have your budget in order. Know how much is coming in, how much is going out, what could you cut if you had to if it took you longer than you expected to find that next job," Halverson said. "Part of that is now going to lead you into the emergency fund. Making sure you've got enough money, three to six months at minimum to bridge you through that next position."
It's also crucial to make sure you don't dig yourself into deeper debt while you search for a better job.
Halverson suggests two methods to pay down what you owe:
1. Snowballing: Put all of your extra money towards knocking out your smallest debt, and then moving on to the next smallest debt until it's all paid off.
2. The Avalanche Method: Tackle your debt by paying off bills with the highest interest rate first, then shifting down to pay the debts with lower interest rates.
With both of these approaches, remember to keep making minimum payments on everything else.
One more thing to consider in your financial plan is your retirement savings.
It's important to know how much of the 401K match you would be eligible for from your employer if you left your job today.