To hitch the “Nice Resignation” some employees are prepared to enter debt
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“The Great Resignation” is apparently still playing across America.
In fact, some people are so desperate to quit their jobs that they are willing to go into debt for it, according to a survey by Credit Karma.
According to the survey, 38% of US workers are currently looking for work elsewhere and 41% are considering leaving their current job within the next six months.
The majority (52%) of employed workers who are considering quitting say they are financially willing to do so. However, 28% are not. Of those unprepared, 57% expect to take on debt while looking for their next job. The nationwide representative online survey was conducted by Qualtrics in July and interviewed 1,512 adults in the United States.
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The Covid-19 pandemic has caused many people to reassess their lives and the time they spend at work. Some may be burned out, others may be tired of going back to the office and want to continue working from home.
“People are feeling empowered and more confident than in the past,” said Colleen McCreary, chief people officer at Credit Karma.
“They are ready to take on debt for it,” she added.
In June alone 3.9 million people said “I quit,” according to the US Bureau of Labor Statistics. That’s a little less than the record-breaking 4 million that stopped in April.
A separate survey by financial services website Personal Capital and The Harris Poll found that 66% of Americans are now interested in changing jobs.
More than half (52%) of respondents said they would need at least $ 50,000 in their bank account to be able to do this conveniently. Additionally, 59% of respondents said they could survive for three months or less without a regular paycheck, according to the survey. The online survey was conducted from July 29 to August 2 of 933 American working respondents.
“It’s always good to have a financial plan before you quit your job because you want some sense of stability and peace of mind to get what you want,” said Krista Aliga, Denver Certified Financial Planner, Senior Financial Consultant at Personal Capital.
In this way you ensure a certain financial stability.
Have emergency savings
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If you’re looking to quit without another job, make sure you have an emergency fund to cover the cost of living for three to six months, Aliga said. Set it aside in a high-yield savings account for easy access, she suggests.
However, CFP Diahann Lassus, executive director at Peapack Private Wealth Management based in New Providence, New Jersey, recommends deferring living expenses for six months to twelve months.
“When you need money, the last thing you want to do is withdraw it from a retirement account and pay all those taxes and possibly fines for it,” said Lassus, a member of the CNBC Financial Advisor Council.
Evaluate your expenses
Your spending habits may have changed during the pandemic. When you’ve found that you can save money by cutting out some expenses, such as: For example, eating out frequently, try to maintain some of your new-found behaviors.
Don’t assume that your expenses will stay the same, however. Instead, look back at your 2019 cash flow when it comes to deciding whether to quit comfortably, suggests Lassus.
If you’re looking to move after you retire, you should also look at the cost of living in this area as it can change the amount you need to save on your living expenses, Aliga said.
Don’t forget health care costs
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“The ability to continue to have health insurance in a global pandemic should be high on the list for people,” McCreary said.
If you quit without another job, you may be able to avail your partner’s plan or purchase coverage through the country’s public exchanges.
COBRA will extend your current health plan for up to 18 months, but you pay for the entire plan, which can be expensive.
Not having one at all can really get you down the drain if something happens. Credit Karma has seen its members take on an additional $ 2 billion in medical debt collection efforts from September 2020 through April 2021.