If you’re planning to leave your current job, either to take
a new job or to step out as an entrepreneur, you’ll want to assess your
financial situation.
Consider taking the following steps to ensure you’re in a
good financial place to make the move.
Create a budget. Some studies have shown that about
two-thirds of us do not have a budget. This is an important first step to
determine your income needs and to aid in salary negotiation with your next
job. You’ll want to know how much money you need to make so you can pay your
bills. In addition, creating a budget will help you determine anything you’re
wasting your money on and ways you can decrease your spending so you can take
the following step.
Save. You’ll feel much more confident with your next step if
you’ve built up a nest egg of savings. If you have enough in your savings to
pay your expenses for at least six months you should be fine, depending on your
next plans. If you don’t have much in savings right now be proactive and look
at your expenses. What can you get rid of? Maybe you can go without cable
service for a few months, or perhaps pack your lunch rather than eating out
every day. You can likely find some creative ways to reduce your expenses.
Live simpler, cut back, and sell. To continue with the point
above, make eBay or craigslist your friend. This is a great time to inventory
the things in your home and determine what you can sell to bring in a few extra
dollars. This might be some CDs or DVDs gathering dust, or perhaps that old
laptop you no longer use. Take a look around and see what can be converted into
some cash for your savings.
Evaluate 401k options. If you have a 401k with your current
employer speak with a financial planner about the implications and options
related to leaving your money with your old company’s plan or moving it to an
IRA.
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