Money moves to make before leaving your job for another
SEE ALSO :Why your dream is in your handsYour new employer might be offering similar benefits, but make sure that it will be enough for your needs. Also consider that there will probably be a health insurance gap. Even if you move seamlessly from one job to another, it might take a few months before the health insurance from your new employer kicks in. Speak to both you old and new company’s human resource departments to find a way to mitigate this if possible. Refinance your mortgage Employment history is one of the key factors considered when approving candidates to refinance their mortgage or a home equity line of credit. While a job in the same field and similar salary might not have a significant negative effect, going for a significantly lower salary, changing careers, or going into self-employment might raise a red flag to loan underwriters.
SEE ALSO :How to be a happy millionaireTo be safe, make sure you handle your debt financing 2-3 months before making the transition. Stock shares or options Did you acquire company shares as part of your employee benefits? Some companies might have restrictions on when you can sell your shares. You can also use your stock shares or options to negotiate for a better salary or benefits at your new job. Stock or options represent real money, especially in publicly traded companies- don’t forget that. Save six months’ worth of salary What if your new job turns out to be a bad fit? Or the promising startup company fails? This is why you should build up an emergency fund before leaving your job. This money will come in handy in case you’re suddenly rendered jobless, as you search for another job. Once you’ve determined that you’d like to look for another job, look for ways to keep your expenditure under control so you can boost your savings. You can also look for a side hustle to help you increase your cash cushion before you head to a new job. Gather your statements You have found another job and are ready to make the transition. Now is the time to ensure that you have all the financial documents from your current job- such as payslips, retirement plan statement, tax reports and so on- are in order and easily accessible. Many employers can get unhelpful and dismissive with employees who quit, especially if you’re joining a competitor. It is best to ensure you have all your documents together before leaving. Don’t make lifestyle changes yet When you get a bump with your next salary, you might understandably want to update your lifestyle. However, financial advisers say that the prudent move is to continue with your current lifestyle. Try the 80/20 plan where you use 80 per cent of the extra money on paying debt or long-term financial goals (such your children’s education funds or retirement plan) while 20 per cent goes into your checking account to spend as you please. This will allow you some lifestyle updates while also ensuring long term goals are not forgotten.
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