Income+
What you need to do before quitting your job
Tan Jee Yee 
Before making an impulsive decision to quit, one must have at least three to six months' savings to survive before the next job comes along
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THERE was once a time when Esther Leong wouldn’t hesitate to order a glass of iced hazelnut mocha in her favourite café.

Now, as the lifestyle writer sits with FocusM to relate her situation, she orders a glass of filtered water. “My days of buying expensive coffee is behind me. Temporarily, I hope,” she says with a hint of forlornness.

Leong is in a bit of financial trouble. She is jobless and the little freelance writing work she managed to hunt down isn’t paying her fast enough. Her savings are quickly being depleted by rent, bills and her car loan.

A publication may have just offered her a job, but unless she asks her parents for some help, Leong will not have enough to keep her room and feed herself sufficiently for another month.

Her monetary conundrum began three months ago when she quit her job of two years. It was an unplanned decision – her work place had grown increasingly more toxic and stressful after the company was restructured.

Things had gotten so noxious that Leong had to struggle to get up for work daily. Angry and disillusioned, she tendered her resignation before she had even looked for a new job.

 

Leaping without looking

Like most impulsive decisions, this left Leong in a quandary.

“I realised, perhaps a little too late, that my savings were only enough to keep me fed for three months at best, and that’s not even factoring the rent and loans I have to pay.

“I had leaped without looking, and now I’m paying the price,” she says.

Leong doesn’t regret quitting her job as her mental well-being was at stake, after all. But she admits she could’ve planned the exit better.

“On hindsight, if I had stayed for another month, I wouldn’t be facing this problem. It would’ve given me time to look for a job, too.

“But it’s also about how I’ve been managing my finances. I mean, if I had saved properly for a situation like this, it wouldn’t be so daunting,” she says.

Let’s face it, most of us have thought about leaving our jobs at one point or other.

Whether it’s due to burnout or just the idea of moving on to greener pastures, the thought of jumping ship seems almost inevitable. And if you’re a millennial, the thought is even more persistent.

According to Deloitte’s fifth annual Millennial Survey released last year, 66% of millennial employees are likely to leave their organisations in the next five years. In Malaysian markets, the percentage is at 69%.

In 2015, a report by job search website JobStreet.com found as many as 74% out of 631 Malaysian employees are dissatisfied at their workplaces.

It would seem like we’re all ready and geared up to leave our companies, and it shouldn’t be a shameful notion.

Many have pointed out the benefits of changing jobs every three to five years – moves that not only keep you happy and productive, but also teach different things and ultimately helps to grow your career.

And, of course, there are times when you need to throw in the towel as soon as possible, lest the increasingly corroding workplace destroys what’s left of your sanity.

Sometimes, it even means doing so without having a plan ready, or another job lined up.

If you suddenly quit your job, it is best to restructure your debts instead of not paying for months, says Tan

“For the most part, leaving a job without a new one to go to can be considered a very unwise move,” says Jessica Tan, a financial coach and planner for One Advisory Sdn Bhd.

However, she believes there are times when a person has to leave, regardless of whether he is prepared for it or not.

“[This happens when] the person finds that his company is dealing in shady, questionable matters like embezzlement or cheating clients.

“In this case, leaving quickly is almost vital as the employee’s reputation and future career prospects are  at stake,” she says.

Tan says the second situation is if the workplace is too detrimental to the health of the person. Even if he or she might face financial trouble afterward, mental and physical health are more important.

In this case, the old saying of weathering the storm shouldn’t be adhered to. If you ignore your health, the cost to both your finances and well-being will be much, much higher,” she says.

If you intend to quit your job without having another lined up, Tan says the most important thing is to have sufficient savings.

“The golden rule is to have at least three to six months’ worth of your fixed living expenses,” she says.

“It will be a reserve that gives you financial comfort when leaving a job so that you can more comfortably seek a new one or decide where your next path lies.”

The math is simple, Tan says. “You just need to multiply your monthly budget by six. Say you need RM2,500 for rent, bills, loans and your groceries. You will need at least RM15,000 in the bank to be comfortable.”

The budget differs depending on the person’s lifestyle and needs, of course. The challenge now, Tan says, is determining how much you actually require per month to survive.

 

Tracking expenditure

That’s where better financial management comes in hand.

“Most of us end up not tracking monthly expenditure. You need to have a clear knowledge on how much you spend monthly, including your monthly debt payments and other things like insurance costs.

“Note that, after you quit, your employer won’t be paying for certain benefits like health insurance, so make sure to factor those in,” she elaborates.

Additionally, if the person has children and a spouse to care for, it might be prudent to double that savings amount.

But it’s not easy to save up the required amount. Tan says that this is where smarter financial planning and tracking helps. “You need to inculcate this habit to track your finances and start saving.”

Financial planning doesn’t just stop when you leave your job. “Now that you’ve lost a guaranteed source of income, you need to start budgeting to make sure you prolong that money in your bank account,” Tan says.

Lifestyle habits are hard to break and she says more often than not, we may continue spending like when we had the disposable income to spare.

The bigger challenge is to avoid tapping into savings you’ve set aside for other goals. She says out-of-job savings should preferably not belong in the same pool as, say, your emergency funds.

This means having the foresight to start saving before leaving your job, a notion Tan agrees is difficult but manageable.

As the jobless period persists, she says it’s important to start looking for alternative sources of income.

“Part time jobs or freelance gigs may help, especially if you’re experienced in the industry that allows for it. You might want to consider selling off things you don’t need.”

When we talk about planning before tendering the resignation letter, it shouldn’t just be about building your finances.

Lee Mei Foong, a career advisor with recruitment firm A.G.E Consult, says that while some may not be able to find a replacement job before quitting, they should start paving the way ahead first.

“Say a person is too busy to find a job before quitting. They can actually start preparing so that when they do quit, they will be able to find another one in no time,

“There’s also the aspect of quitting properly because if you play your cards wrong, you might be burning bridges,” she says.

Lee says even though a former workplace may have been tough on you, every bridge can benefit you in one way or another.

The first step, she says, is to quit amicably, so don’t start a resignation listing all the problems of the company and fill it with negativity.

“You may even want to avoid stating your health issues if you feel that it’s a sensitive topic. Instead, just thank your employers and say you’re looking towards newer aspects of your career,” she says.

The reason to do this is that your former employer is an important reference source for when you look for a new job.

“You should do your best to leave on good terms, including helping with transitions.

“Doing so, you can at least count on your former employer to give you a good reference when the time comes.”

Securing references should be another priority, Lee says. “If you don’t feel like asking your boss, then colleagues and clients are good alternatives. It’s best if you can secure these references before you leave.”

With this, one can leave a job with one of the few foundations needed to more effectively secure a new one.

The other important aspect involves improving your resume. “A lot of people neglect to update their resumes after securing a job. You ought to dust it off and ensure that it is at its best before quitting.”

 

Build your portfolio

You may also need to “promote” yourself – that is, in building your credentials well enough. This includes using social media connections, particularly through channels like LinkedIn, to let people know that you’re looking for a job.

“You should build your online portfolio to show recruiters what you have, and can, achieve,” says Lee.

If one is more comfortable financially, he can consider making an investment that can further aid in searching for the next dream job – getting further education.

Perhaps the best lesson here is to plan ahead, even if you intend to leave a job with no replacement down the line.

As Leong says: “I don’t regret quitting my job so quickly, but I could’ve certainly done more as preparation.

“My advice to everyone is that if you find yourselves being emotional and angry about your jobs, take a step back to calm down and reassess your situation.

“Maybe you need some extra time to earn more money, or maybe you need a plan so that you can get hired sooner.

“Emotions got the better of me, so I hope you can avoid the same mistakes I made,” she concludes.

Managing finances during unemployment

YOU can be optimistic about your chances after leaving your job, but sometimes luck may not be as favourable. When that happens, you need to start managing your finances more effectively.

“The first thing you need to do is review your expenses to know how much you usually spend and where you can effectively cut costs and avoid wastage,” says Jessica Tan, a financial coach.

If you’re in debt, you might need to talk to your creditors to ask for debt restructuring and reduction in your monthly payments.

“Rather than avoid paying for months, it might be better to explain your situation and ask for a reduction, at least until the storm passes. Personal bankers may even help you create a budget,” she says.

Finding part time jobs or freelance gigs should come next if gaining full-time employment proves difficult.

When things get really bad, Tan advises that the person should consider cutting out some of the more non-critical expenses.

“Do you really need to pay RM200 for the Internet if you can get by with the data plan on your phone?

“Netflix or Astro may be able to keep you from boredom, but the amount you can save from it can feed you for weeks,” Tan says.

Selling off certain things at home or even foregoing certain investments is better than starving and being in debt.

Just know that, if you keep yourself positive and keep looking, the situation that you’re in is only temporary.



This article first appeared in Focus Malaysia Issue 249.