Last week, I offered eight questions you should consider before quitting your job, and one of those questions pertained to the preparedness of your emergency fund. A reader, Qixx, pointed out that the decision to quit your job is not an emergency, and shouldn’t warrant dipping into cash set aside for true emergencies. The loss of income generated by quitting a job with no other immediate replacement is a choice, not something that is forced upon you.
Qixx is right. Quitting a job is a choice. Often, an employee who is dissatisfied with his working environment could hold on longer, juggling finding a new job with current responsibilities. After all, it’s easier to be hired somewhere else without any gaps in your work history. If you quit too soon, you could make it more difficult to pick up new employment, especially in today’s job market, where employers have all the power.
Leaving your employer is a process, and it can be a long one. If you are having problems at the office but your working environment is otherwise good, it’s worthwhile to try to address the problems. While you are working with your boss to resolve the issues, you can be looking for a new opportunity as well as preparing your savings account for the inevitable stress of replacing your income for what you hope will be a short time. Quitting a job should not be a snap decision, and as long as it’s not, you have some time to brace yourself by boosting your savings.
Nevertheless, if your situation cannot be resolved and you decide that you can no longer work in your current environment, you might still consider this an emergency, sufficient for dipping into the emergency fund portion of your savings. The emergency fund is just a label for your savings, and if you have more money in your bank account than what you’ve labeled “emergency fund,” you are able to shift money around — or just shift your categorization. Use your emergency fund if you must. Staying in a bad working environment longer than necessary could be more damaging to yourself than using your emergency fund to cover your expenses while looking for a new job.
If working conditions are so bad that you have decided to quit your job, don’t stay there. Your co-workers and supervisors, many of whom can easily tell when someone has already decided to quit and is just hanging on, will appreciate your taking action as quickly as possible. It’s important for the organization to find a replacement for you, as your productivity as someone who no longer cares about their job will surely be damaged. In this respect, once you’ve address the eight questions and have decided to quit, it’s best to do it right away, even if you don’t yet have replacement income.
The danger is going into debt to pay your bills, and you should do whatever possible to avoid this situation. If you haven’t prepared financially at all, and you have no savings, emergency fund or otherwise, you end up in a tough situation. You need to quit, but you can’t from a financial perspective. This is a good reason to always be prepared for the loss of your job. If you haven’t achieved that condition yet, get there as soon as possible in the event your job ever becomes something on which you can no longer spend five minutes while retaining your sanity.
The consequences of dipping into your emergency fund are often less severe than the consequences of spending more time in a job that for whatever reason you are no longer suited for. You may be able to put up with it, but consider your co-workers who must also put up with you. You might be able to put on a brave face and continue to work everyday in a job you hate, but it will eventually wear you out emotionally. Changing your life for the better is always the bravest choice in a difficult decision, and in the future, you’ll look back and think, “I wish I had left that job sooner.” Despite the collateral damage to your finances, it’s better to move on quickly. You can rebuild your emergency fund, but you can’t get back the time you wasted in a bad working situation. Time is valuable when life is short.
If you quit without dipping into your emergency fund, that’s optimal. But if you have the savings and the only thing preventing you from getting out of a bad situation is the desire to leave that money alone in the event of a more difficult emergency, do not hesitate any longer. Use it, change your life, and rebuild your savings when you can.
Published or updated June 4, 2012.