Resigning From Your Job: A Financial & Mental Checklist
The urge to abandon a job is rarely timed with economic convenience. But in a market described as “far less forgiving” than in recent years, a carefully considered exit strategy is more critical than ever. That’s the core message from financial planners and recruitment experts as more workers contemplate a change, even without a clear next step.
Nadine Higgins, writing recently about her own decision to leave a salaried position, acknowledges the inherent risk. “Arguably, You’ll see ‘safer’ choices than resigning when the economy isn’t exactly booming,” she notes, but emphasizes that preparation and growth shouldn’t be indefinitely postponed. Her experience and the advice she gathered, offers a practical checklist for anyone considering a similar move.
Beyond the Emotional Response
David Lacire, Senior Director at Robert Walters NZ, cautions against impulsive decisions. “I understand the temptation to walk away when a role isn’t working,” he says, but warns that the current job market demands a more calculated approach. A reactive resignation, rather than a proactive one, can significantly limit options. Robert Walters NZ provides recruitment services across a range of industries, including financial services, and technology. Their website offers insights into current market conditions.
The first step, according to Lacire, is networking. Even if you’ve been with a company for some time, it’s crucial to “line up conversations, test your value in the market, and craft sure the move is proactive rather than reactive.” Higgins found value in these conversations, even those that didn’t immediately lead to opportunities. The act of articulating her skills and experience proved beneficial, and helped clarify her career goals.
LinkedIn, even as a powerful tool, requires a nuanced approach. The “open to work” banner can be a double-edged sword. While it can signal availability and create urgency in some sectors, it can likewise be perceived as a sign of distress in others. Lacire advises controlling the narrative, focusing on what you’re moving *towards* rather than simply stating you’re available.
The Hard Numbers: Life Costs and Runways
Beyond the professional considerations, a thorough financial assessment is paramount. Higgins recounts advising a client who accepted a new job offer only to discover the remuneration wouldn’t cover their existing lifestyle costs. Another client’s partner took a role in a different region, and the combined expenses of maintaining two households negated any financial benefit.
Calculating your true cost of living – after taxes, KiwiSaver contributions, and student loan repayments – is essential. This isn’t simply about assessing current expenses; it’s about projecting future costs and potential changes. Higgins recommends creating a spreadsheet to track savings and income, providing a clear picture of your financial runway – how long you can sustain yourself without a regular paycheck.
This runway calculation is particularly important when transitioning to self-employment. Higgins notes the need to factor in the full cost of replacing benefits previously provided by an employer. She discovered her health insurance premiums would increase by 82% upon leaving her salaried position, a significant and unexpected expense.
Insurance and the Hidden Costs of Self-Employment
The shift to self-employment also necessitates a review of insurance coverage. Income protection insurance, in particular, may be affected. Insurers may be hesitant to provide coverage to individuals without a stable earning history, or may adjust terms based on the nature of the new work. Income protection can be expensive, but it’s a crucial safeguard against unforeseen circumstances.
New Zealand’s Financial Markets Authority (FMA) provides guidance on income protection insurance and other financial products. Their website offers resources for consumers and financial advisors. Understanding the terms and conditions of your insurance policies is vital before making any significant career changes.
The Psychological Impact of Leaving a Job
The decision to resign isn’t purely financial or logistical; it also has a psychological component. A job often provides structure, community, and a sense of purpose. Lacire emphasizes the importance of establishing a routine, building a support network, and having realistic expectations about the job search process, especially if leaving without another role secured. The search can take longer than anticipated, potentially influencing the types of roles people ultimately accept.
Higgins herself found a new outlet for her skills and experience by joining Wabi Sabi Media Group, a business she runs with her husband. Wabi Sabi Media Group has received industry recognition for its work. However, she acknowledges that this transition wasn’t without its challenges, and encourages others to proactively seek out opportunities and build their networks.
What to Consider Before Resigning: A Checklist
Before submitting your resignation, consider these key areas:
- Financial Assessment: Calculate your cost of living, after-tax income, and potential runway.
- Networking: Initiate conversations with contacts in your field to gauge market value and explore opportunities.
- Insurance Review: Assess the impact on health insurance, income protection, and other benefits.
- Psychological Preparation: Develop a routine, build a support network, and manage expectations.
- Career Goals: Clearly define your objectives and ensure your next step aligns with your long-term aspirations.
Stifel Mortgage and Home Lending highlights the importance of integrated financial planning when considering major life changes like a career shift. Their recent insights emphasize the limitations of relying solely on automated tools for financial advice, particularly when complex factors are involved.
quitting a job in a challenging economy requires careful planning, realistic expectations, and a willingness to adapt. While security can be found in preparation, growth often requires stepping outside of one’s comfort zone.