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How To Quit Your Job

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Introduction

I can’t tolerate holding a regular job for long, so over the years I’ve quit dozens of them. But most former bosses told me I was welcome to return, an offer I’ve accepted more than once. And I’ve never been in financial trouble after leaving a job.

So as a job-quitting expert I offer you this guide to how to quit your job.

But before you quit, slow down! Maybe there are some things you can do to make your job more tolerable.

Okay, so you’ve tried that and you’re still humming, “You Can Take This Job and Shove It” (ironically sung by Johnny Paycheck). Well don’t sing it to your boss. Quitting impulsively and out of anger may feel good for a moment, but it’s rarely the best approach.

Instead, do these three things:

  1. Position yourself so you don’t need any particular job.
  2. Make specific preparations to quit your current job.
  3. Leave gracefully.

Let’s look at them one at a time…

1. Position Yourself to Quit

Times have changed and job security is dead, so you should always be prepared for job loss. And if you are positioned properly, you can not only afford to be laid off, but also to quit any job when you want to. Here’s what you need to do to get ready…

Have Money in the Bank

Amazingly, a Bankrate survey found that 29 percent of Americans have no emergency savings at all. Financial experts recommend that you have enough to cover three to six months’ living expenses, but to be completely ready to quit a job I suggest you have enough money set aside to pay the bills for a year.

You could quit now, with no savings, if you already have a new job lined up. On the other hand, if you’re quitting to start a business you may want enough money in the bank to cover the bills for much more than a year.

But in any case, it’s always good to have some savings, because money buys you time to make the right moves, whether that means finding your ideal job, growing your business, or literally moving to a place with better opportunities.

So set aside something every time you get paid. Don’t wait until the end of the week or month to see what’s leftover to save. Instead first put money in a savings account, and then figure out how to live on the rest.

If you really have nothing to save you may have to find ways to make more money. I’ll return to that in a moment.

You can also spend less in order to free up money to save. An added benefit of this approach is that when you live more frugally a year’s expenses will be lower, so you can save that much even more quickly. That brings us to your next positioning step…

Minimize Your Expenses

For all of my adult life I’ve been able to quit any job and still pay the bills. How? I habitually set aside money and I controlled my living expenses (and fortunately my wife also likes to have the job-quitting option always available).

But some expenses matter more than others.

We used to pay for a house cleaner, stay at nice vacation resorts, and go to movies when we felt like it. What happened after our business income dropped and I quit several jobs? We cleaned the house ourselves, used credit card points for hotel stays, and got Netflix. Life is good, and our core expenses are easy to cover because they’ve always been low.

If you want to be prepared to quit a job when you feel like it you have to minimize any expenses that can’t be quickly and easily eliminated. Think of these expenses as your “core cost of living” or “life overhead.” The lower that overhead, the easier it is to cover, and the more freedom you have to quit any job you don’t like.

Find as many ways as possible to reduce or eliminate every fixed expense you have. Here are some examples of regular expenditures you might have…

  • Rent
  • Renter’s Insurance
  • Mortgage Payments
  • Property Taxes
  • Homeowners Insurance
  • Electricity
  • Heat
  • Water and Sewer
  • Garbage Collection
  • Car Loan Payments
  • Car Insurance
  • Car Expenses
  • Student Loan Payments
  • Credit Card Payments
  • Phone Plans
  • Health Insurance

It may not seem like it at first, but there are many ways to reduce each of these fixed expenses. Rent the cheapest apartment that’s comfortable and safe. Buy a smaller, cheaper home to shrink your payments, insurance bills, and utility bills. Pay cash for a used car instead of borrowing. Shop for cheaper phone plans, health insurance, and garbage collection.

Get creative. Challenge your property tax assessment. Share an apartment with a friend. Get rid of the car and use public transportation or a scooter. I once shared a garbage bin with a neighbor to cut the cost in half.

You get the idea. Do whatever you can to reduce any or all of your fixed expenses.

Create Other Streams of Income

Quitting a job is easier if you have other income sources. I invest, I write part-time, and I collect thousands of dollars in bank bonuses annually. My wife and I typically have at least a dozen sources of income in any given year. That makes jobs less necessary.

I did have a job a few years ago, and my wife had one a year ago. Jobs do have their advantages, so we’ll probably have a few more in the years to come. But the extra income streams will make it easy to quit when the time comes, as it always does.

You don’t need other sources of income to quit a job. You can just save enough money to quit and live from your savings. But the extra income makes those savings last longer. For example, when I bought my first home I rented out rooms to generate half of my life overhead, so whenever I quit working my savings would cover the bills for twice as long.

Having more than one source of income puts you in a much better position to make decisions about employment.

2. Prepare to Quit

Once you’re in a good position to quit any job, and you know you want to quit your current job, it’s time to make specific preparations. Depending on your circumstances, you’ll want to do some or all of the following before you actually give notice to your employer.

Make a Plan

Setting firm goals doesn’t work for everyone, and circumstances can change without warning, but it does help to have a plan, and a few contingency plans. Here are a few questions you might want to answer when formulating your plans…

Should you get another job before you quit?

How long will you wait before you get another job?

What if it takes longer than you think to find the next job?

Do you have a career change in mind?

Are you going to move to a city with better opportunities?

How will you pay for health insurance?

Will you be able to get your job back if necessary?

Is your spouse okay with the plan?

Start Your New Lifestyle Now

Once you quit you may have to temporarily live on a lower income to make your savings last longer. Or you might have to adjust to a less-expensive lifestyle permanently if you choose to do lower-paying work that’s more satisfying. Either way, start your new lifestyle at least a month before you quit.

This is your “trial run.” If you find you’re not able to live as cheaply as you thought, you have the option to wait longer and make more preparations before quitting your job.

So cancel your cable now if that’s part of the plan. Get used to eating out less often. Start carefully watching what you spend.

Update Your Resume

If you’re going to look for another job, either right away or after a break, update your resume. If you don’t already have one prepared you can review examples of resumes online.

Whether you take a two-year mini-retirement or just spend a few months finding the next job, you’ll create a gap on your resume. Employers typically don’t like these gaps in your employment history, so have an acceptable explanation. Saying “I just wanted to relax for a while” isn’t usually acceptable.

There are several ways to deal with this. For example, if you plan to keep another job where you work one day per week, you can use that to fill the gap, without mentioning that it’s part-time. Taking all of your remaining vacation time after your last day at work can delay your official last day of employment and so minimize the gap.

My favorite trick is to have a side-business (freelance writing, in my case), and use it to fill in work history gaps. This works best if you have an LLC or other business structure so you can be “employed” by your company. Don’t mention that it’s your own company until and unless you’re asked directly, at which point you can explain your situation (it’s better to do this in person than on an application).

Buy a House

Buy a house just before you quit your job? Been there; done that. It may seem counterintuitive, but if you are prepared for leaving your job, buying a house that fits into your new frugal lifestyle is not a problem.

More importantly, if you have any plans of owning a home and getting a mortgage loan in the near future, you have to do it before you quit. Lenders don’t make loans to the unemployed. They also want you to have two years of continuous employment before they’ll make a loan. And if your next job will be at a lower wage that could be an issue too. So buy now.

Increase Your Credit Limits

This advice is for readers who handle credit responsibly. If you’re deep in credit card debt you probably shouldn’t be quitting your job anyhow.

On the other hand, if you are responsible and you plan to quit your job, it can be useful to have bigger credit limits in case of emergencies or longer-than-expected future job hunts. The credit card companies will not increase those limits once you’re unemployed, so call and ask for the increases now.

And if there are any new credit cards you need, apply for them now.

3. Quit Your Job Gracefully

I’ll admit that I haven’t always left employers gracefully. I even quit once because I thought I would be fired for not following unreasonable and unsafe instructions, and I figured quitting looks better on a resume than being fired. (Interestingly, even that time I was told I was welcome to return.)

In any case you should try to leave on good terms. You may need the job back, after all. Also, a prospective future employer may call your current employer to ask about you. And people talk. So do the following…

Put It in Writing

Even if you’re doing menial labor you should write a formal letter of resignation. If you haven’t written one before model it on one of the many examples of resignation letters available online. Quitting without a letter is unprofessional and can leave an employer with a bad impression of you.

Give Two Weeks or More

How much notice to give depends on the situation at your workplace. Two weeks is probably the minimum you should consider. I’ve given a month’s notice when I knew an employer was short-handed. Be reasonable and it will be remembered.

Quit at the Right Time

Don’t announce that you’re quitting in the middle of a company crisis (unless there is always a crisis). In fact, don’t even quit when your supervisor is having a bad day.

Some sources (like this one and this one) suggest that you hand in your resignation letter on a Friday. This gives your boss time to get used to the idea over the weekend, so there may be less awkwardness.

Common sense suggests it’s even more important to choose a time when your boss is in a decent mood and not stressed out. That might be on a slow day after she’s had a good lunch, for example.

Give Thanks and Compliments

Even if you hate your job and the supervisors, the work helped you pay the bills, right? And there must be at least a few other good things you can honestly say about your work and your employer. So say them.

Thank your boss for the opportunity you were given. Relate what you enjoyed about working for the company. Make it clear that you’re leaving for your own reasons and don’t mention any of the failings of your employer (it’s too late for complaints to be useful at this point).

Thank the boss again and ask if there is anything else you can do before your last day of work. For example, you could offer to complete a project or help train someone for your position.

Then say goodbye.

Please tell us about your own job-quitting experiences in the comment section below.

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