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How to quit your job during a pandemic without going broke

When Jennifer Alsup Caulk of San Jose, California returned from maternity leave in June, she expected to resume her original position at a construction company. Instead, her employer offered her another position with different hours and insisted she work from the office, despite the shelter-in-place order. Instead, she agreed to try to come in every week or two, if necessary. Because daycare was closed, her children would “sit around like little slugs” as she worked, the 33-year-old tells Mic. “This was sad to watch.” Her toddler sat glued to Netflix, while her infant laid beneath his play gym. She asked her employer if they’d let her reduce her hours, so she could engage more with her kids. They refused, which she says essentially forced her to quit.

Plenty of others have left their jobs — despite the shaky economic climate coronavirus sparked — for a variety of reasons. Maybe you’ve considered it yourself. While it might seem impulsive, there are steps you can take to quit your job during the pandemic without going broke. Here’s how, according to experts, and those who’ve done it.

Assess your current expenses

“I would start by getting a plan in place and really listing out all of your expenses right now, and seeing if there’s anything you can cut,” says Choncé Maddox, a certified financial education instructor and personal finance blogger. Determine on a scale of 1 to 10 how much you want to quit your job, and develop a timeline accordingly. If you’re really desperate and want to quit stat, recognize that doing so might require lifestyle tradeoffs, like no longer signing up for fitness classes or unsubscribing from streaming services.

“I would cut down on buying food out and only buy foods I could make many meals from,” like rice, tortillas, and canned or frozen produce, recalls Deirdra Quintana, 37, of San Diego, California, who quit her job during the pandemic in hopes of finding another that would better enable her to care for her three kids. A previous employer recently hired her back.

Creating a budget using pen and paper, Excel, budgeting apps like Mint or Pennies, or budgeting tools your bank might offer, can go a long way, says Caulk, who recently landed a job in stock administration, which she starts later this month. “You can forecast both income and bills to see where you can trim the fat or how much you can start setting aside.”

Calculate your bare bones budget

Based on your assessment of your expenses and where you can trim the fat, determine your bare bones budget, Maddox says. True to its name, a bare bones budget accounts only for what you need to survive, such as rent, mortgage, groceries, gas, and utility and other bills.

Start saving now

Maddox recommends saving at least three to six months’ worth of expenses, based on your bare bones budget. “You don’t want to keep spending like you were when you had a job, since you’re not relying on that income anymore.” Also account for factors unique to your situation, such as whether you have unemployment, a side hustle, a spouse with an income, or whether you have kids or parents to financially support. Kaitlyn Crossley, 29, had prepared around three months of savings pre-pandemic, as part of her plan to relocate with her family to northern England at the end of 2020. She moved forward with quitting from her job as chief operating officer at a London-based AI company, even when the pandemic hit. While she loved her clients and team, her job left her feeling overwhelmed and struggling to spend time with her daughter.

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Live on your bare bones budget for a month or so, and direct the rest of your paycheck into savings, Maddox suggests. Caulk also recommends being smart about what may initially appear to be discretionary funds. “Many people have a rent moratorium right now, but your rent will come due eventually,” she says. “Any ‘extra’ money right now from potentially not commuting or not eating out, going to the movies, etc., should get banked into savings.”

Beyond a savings account, “have a checking account buffer, as well, around $1,000, just in case things pop up, where it’s not technically an emergency and you have easy access,” Maddox says, although the federal government recently relaxed restrictions on the amount of savings account transfers or withdrawals to make it easier for Americans to tap into their savings during this financially challenging time. Still, it never hurts to have some extra cushion.

Start your side hustle now

Before you quit, Maddox suggests starting a side hustle if your employer allows it, especially if you don’t have much saved. “Starting a side hustle before quitting provides some income security to replace what you were getting paid at your previous job.” Even if you plan to switch to another job, “there is no guarantee that you will land another job right after you quit, so savings and diversified income streams are crucial considerations.” You might want to explore whether you can monetize a passion project or work a less stressful part-time job. It depends on your personal situation and goals. If you have a partner who’s still working, and you can both manage to live on a single income, a side hustle might not rank that high on your priority list.

“I had been building up my side hustle, a coaching practice, for a few months,” says Crossley, a coach who aims to create emotional resilience, literacy, and tolerance in leaders and parents. Before quitting her AI company job, she got her certification and built out her network.

If you want to move forward with a side hustle, consider online services you can provide, like writing, virtual assistant work, or transcribing, Maddox says, especially in this age of social distancing. Ariel Lopez, an entrepreneur and career coach, highly suggests creating profiles on the freelancing platforms Fiverr and Upwork.

“If you really need money, I would consider something that is going to pay quickly,” Maddox recommends. Figure out when you’ll get paid for any work you’re considering. On Upwork, for instance, hourly contracts allow you to access your earnings 10 days after the billing cycle ends.

To calculate the monthly overhead needed to run your side hustle, determine your baseline, what you spend on rent, food, and transportation, Lopez says. Then, “maybe add $500 or $1,000 to make sure you have discretion.” That, plus your baseline, amounts to how much you need to earn each month, which you want to consider when you set your rates.

Think of unemployment only as a supplement

Definitely file for unemployment, but “don’t make that your plan A,” Lopez says. Maddox agrees. “I wouldn’t base my financial strategy on getting unemployment, but it could be a nice supplement if you do get it,” she says. “Have many backup plans and income diversity.” Make sure you can cover your bare bones expenses even without unemployment, if possible.

Requirements for receiving unemployment vary state by state, so read up on the rules in yours. Brace yourself for a waiting period. “If you need immediate money, I would not be relaying on [unemployment],” Lopez says. “From what I’ve seen, it’s just taking a really long time.”

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Get your benefits sorted out

If you’re getting health insurance and other benefits at your current job, figure out what’ll happen to them once you quit, Maddox says. Will your employer give you a grace period, for instance? “That’s something to include in your budget, any benefits you’re not going to have.”

As you figure out your next steps, it’s important to trust the process. Leslie Nguyen-Okwu, 27, quit her job at a Taiwanese tech company in July when she learned she got into grad school, only for those plans to capsize when COVID-19 hit. She’s unemployed, and coming from a working-class immigrant family, she has no safety net. “The pandemic has taught me that we shouldn’t put all our eggs in one basket and rely on an employer for our sole source of income,” she says. She’s learning to “lean into ambiguity, and how to sit still in all of this white, unstructured, free space… We are always in a season of transition, pandemic or not — and we have to be okay with that.”

At the same time, remember that the pandemic has left everyone overwhelmed in their own way, so you’ll also need to be strategic and assertive, Lopez says. “No one is going to be looking out for you the way you look for yourself.” You can quit your job without breaking your bank, even in this time of economic precarity, if you not only prepare, but perhaps even over-prepare.