If you’re ready to say goodbye to a 9 to 5, you’re not alone.
Millions of workers left their jobs in 2021, prompting the term “Great Resignation.” Countless others are considering taking this step. According to the Society for Human Resource Management, more than 40% of American workers are actively seeking or planning to find new jobs soon.
If you’re exhausted or frustrated with things in your current job, it can be tempting to rush to quit it without doing any prep work. But the more you plan your exit, the better prepared you will be to deal with the consequences.
Plus, yelling “I’m quitting” or just getting out of work will burn bridges and may even damage your future job pursuit.
10 things you should do before quitting your job
An employee resignation checklist outlines 10 important steps to take before leaving your job.
1. Select your next step
Unless you are financially independent and don’t need a job to support your lifestyle, you will need a plan to make money after you leave your job. It is best to review your options before you lose your current income stream.
Consider applying for jobs before giving notice of your resignation. You may avoid a drop in income if you can start working at your new job once your old role ends.
If you have entrepreneurial dreams and aren’t interested in working for another boss, check out our ultimate guide to starting a business. This list of home business ideas can help you get started with little capital.
You may decide that you really want to have some time before jumping into your next job. Taking a job leave may mean that you won’t see your paycheck coming, but time off can be energizing and may help you focus better on what you want to do next.
2. Save money for relocation
It’s smart to build a financial cushion before leaving your job. Even if you have another job, it may take an extra two weeks for you to receive your first paycheck — or you may discover that your new job isn’t exactly what you imagined.
Saving at least three to six months of living expenses in an emergency fund is ideal, but it’s best to save that money for a real emergency, such as dealing with unexpected medical bills. Instead, set up a sinking fund to save specifically for the costs you’ll face if you’ve been out of work for some time.
3. Take care of any upcoming big expenses
Big expenses seem to do more harm when you are unemployed and living off savings. Before you leave your job, think about the big expected expenses — like new tires for your car — that you can pay now while you’re still employed.
Also, it is essential to note that job loss can hinder your ability to qualify for financing or credit. If you’re in the midst of a home purchase, for example, losing your job could hurt your chances of getting a home loan, even if you plan to use your spouse’s income to cover payments. You may want to reconsider your plans or time matters so that the loan has already been made before you leave your job.
4. Use PTO or other advantages
Before giving notice of your resignation, be sure to make the most of the benefits your employer offers.
Some companies will pay for accrued vacation and sick days when you leave the company, but others do not. If your company isn’t paying the PTO due, make sure you use your vacation days while you can. Be aware that your employer may not approve your request to use any PTO after you have given your two-week notice.
It’s also best to take advantage of any other employee benefits that you would be missing out on. For example, if your child is about to get braces, you may want to do so while you still have dental insurance under the supervision of your employer.
5. Gather the Information You’ll Need to Undo a 401(k)
Once your employment is terminated, you will lose the ability to contribute to an employer-sponsored 401(k) plan. Of course, you can continue saving for retirement with an Individual Retirement Account (IRA) or 401(k) plan through your next employer — but you may want to carry over money from your old 401(k) so you don’t. You must manage multiple accounts.
If you log into your retirement account from your work computer, make sure you have your login information and that you know your account number so you can easily access your account from home.
6. Find out how to get health insurance
For most people, losing their job means losing access to health insurance, although there are still options to continue or get new coverage.
One of the easiest options may be to get a health insurance plan for your spouse or household partner if they have coverage through their job. Losing your health insurance (even if it’s due to a voluntary loss of employment) is a qualifying life event, which means your spouse or partner can add you to their insurance without waiting for the open enrollment period.
Alternatively, you can choose to extend your existing health insurance coverage for 18 months through COBRA (Comprehensive Comprehensive Budget Reconciliation Act). However, with COBRA coverage, you will have to pay a portion of your employer’s premium costs plus an administration fee.
Since continuing coverage with COBRA can be expensive, another option is to find an affordable health plan through the health insurance marketplace.
7. Find out how to get your last paycheck
Your last paycheck may not come via direct deposit on the schedule you’re used to. Consult your company’s human resources department or employee handbook for information on how to issue final paychecks.
Some companies will mail you a paper check, even if you’ve been on direct deposit in the past. Be sure to update your address and other contact information in your employee records. You should also write down contact information for your manager or HR representative in case you encounter any problems or inconsistencies when it comes to getting your final payment.
8. Drafting a professional resignation letter
Although it’s best to take the news to your boss in person, you’ll want to follow up with a formal resignation letter.
The resignation letter should include the date of your last business day and other important details, such as any project you plan to finish. You may want to include your reason for leaving the company, but it’s better to keep things vague than to slander the employer and potentially burn a bridge.
9. Attach the loose ends
There may never be the perfect time to quit a job – after all, work never ends – but your resignation will be better accepted if you don’t quit during a busy season or in the midst of a big project.
If possible, try to time your resignation so that you can finish the work you are currently doing. You are more likely to get a positive recommendation from your employer if you are able to take the time to train a new employee or provide a transfer of knowledge so that your colleagues can step in to fill your job when you leave.
It is also useful to use this time to collect contact information in order to stay in touch with your co-workers. Don’t forget to ask your manager about using it as a job reference.
If you work in a field where you need to gather evidence of your previous work experience in a portfolio, gather what you need before you place your notice. Your employer may decide to cut ties with you right away rather than wait until the specified end date. You don’t want to lose access to files you might need for your wallet.
10. Prepare for an exit interview
Before you leave, your employer may want to sit down with you to discuss your reasons for leaving. While exit interviews can also be a way for companies to get information about what they can improve, remember to approach things professionally until you leave on good terms.
Prepare to tactfully discuss your reason for leaving, what you think of your time with the company and constructive criticism you might offer to your soon-to-be former employer.
Once you have completed all the things on this list, you will be well prepared to quit your job without regrets.
Nicole Dow is a senior writer for The Penny Hoarder.