While dropping cable subscriptions for streaming services is an excellent money move to save, you could spend money on more than one streaming service, which is even pricier.
Recent research by ZDNet shows that an average consumer spends $273 every month on streaming services.
Eliminating some streaming service subscriptions can save you a few dollars every month.
If you can’t do away with subscriptions altogether, you can consider downgrading the plans.
Another item you can squeeze or cut off from your budget to save money is dining out or ordering delivery. Consider preparing your meals at home — cheaper and healthier— and avoid eating out or calling for delivery services.
DIY-ing is also another excellent way to reduce costs on services that you can handle. For instance, you can mow your lawn and DIY some home repairs instead of paying someone else to do them.
Another excellent way to squeeze your budget is to capitalize on coupons and rewards when shopping.
Why should you pay the total price when you can get rewards and cashback when shopping?
Use Checkout 51 for money back on gas and grocery shopping. You will get cashback on everyday shopping and still purchase the brand items you love.
Another excellent app for rewards is Coupon Sherpa. You can use this coupon app to find deals on stores like Walmart, Target, Amazon, Instacart, and much more.
Whether you’re shopping for beauty products, electronics, clothes, food, or all things entertainment, Coupon Sherpa offers tons of printable and code coupons.
3. Create an Emergency Cushion
Have you built an emergency cushion and have a reserve fund to support you during your unemployment period? If you’ve set aside some money or liquid assets you can access when you need it the most, then resigning from your current job shouldn’t be stressful.
It is crucial to set aside savings for the rainy day and have a fund reserve to cover your financial obligation once you quit your job.
The best way to build your liquid assets is through a high yield savings account.
So what is a high yield savings account, and how do you create one?
High Yield Savings Account
A high yield savings account is a savings account that offers higher interest rates than a typical bank savings account.
The best thing about a high yield savings account is that you can access the funds to meet your financial obligations without a hassle.
Another thing is that this high-interest account is risk-free if you save with an FDIC (Federal Deposits Insurance Corporation)-insured account.
Your savings will earn interest daily, making high-yield savings account best for short-term saving goals.
Furthermore, you can open high yield savings account online with as little money as you can afford.
Transactions can be pretty seamless because you can connect your high yield savings account with your other bank accounts.
Best High Yield Savings Accounts to Create A Nest Egg
1. Alliant Credit Union
Alliant Credit Union is the best online high rate savings account. You can create your high yield savings account with a balance minimum of $5, and you can enjoy 0.55% APY(annual percentage yield) when you have a minimum balance of $100-plus.
You can bank with Alliant Credit Union through their online platform or mobile app.
Furthermore, you can access or deposit money to your savings account through their countrywide ATMs.
And with their eStatements, you don’t have to worry about monthly fees.
With Alliant Credit Union, your savings are secure with the federal insurance by NCUA (National Credit Union Administration).
2. Lending Club
Lending Club is excellent for FDIC-insured high-yield saving accounts. You can open your high-interest savings account in under three minutes, and you only need $100 to create your account.
Once you set up your account, you don’t need an account balance to keep your savings account.
You will earn 0.05% APY on balances between $10 and $2,499. Account balances above $2,500 will attract 0.65% APY.
With LendingClub’s free transfers, zero-fee ATMs, accessible ATMs, and zero monthly fees, you can enjoy high-interest earnings on your savings.
3. American Express® High Yield Savings Account (HYSA)
Saving your money with American Express®’s high rate savings account guarantees up to 0.50% APY.
You can manage your savings account online, make hassle-free transfers, and enjoy zero-minimums requirement.
Additionally, your money earns interest daily, and you will receive a deposit in your savings account at the end of the month.
Furthermore, you can make up to nine monthly transfers and withdrawal transactions. And like the LendingClub, your money is secure with FDIC insurance to give you peace of mind.
4. Chime HYSA
Setting money aside to quit a job you don’t like needs discipline, and Chime’s high yield saving account offers excellent features to help you set automatic savings.
You can set up automatic deposits when your check hits the account or when you do your shopping.
With 0.50% APY, you can be confident that your funds will earn eight times more than what you could get with a traditional savings account.
Another excellent thing about Chime HYSA is the zero-fees offers and the zero minimums or maximum interest requirements.
One thing you should note about high-interest saving accounts is the variable APY.
4. Utilize your job benefits
Quitting your current job without using the benefits is like leaving money on the table.
Before leaving your job, ensure that you maximize your benefits, including your unused sick leave and vacations.
Do you have a Flexible Spending Account with your employer? Ensure that you use it because it is non-transferable and you can’t move it to your new job.
You can also consider if you’re eligible to opt for COBRA with your FSA.
If you don’t utilize your FSA, you risk forfeiting the money once you leave your job.
On the other hand, you can max out your year-worth of FSA contributions even if you’ve made contributions halfway.
You can spend your FSA on routine checkups, elective treatment, new glasses, restock meds, and any health-related expense.
Unused sick leave days and time-off are other job benefits to use before joining The Great Resignation bandwagon.
Inquire from your human resource department about your severance pay and compensation for unused sick leave/vacation.
Another crucial thing to consider is your 401k plan, and the exciting news is that you have options with your retirement contributions once you terminate your employment contract.
The first option is to leave your 401k plan with your current employer after you leave the company—you should check if your company has this option.
Ideally, you can leave your 401k account if you have more than $5,000 in the plan—according to Fidelity.
If your retirement savings is less than $5,000, your former employer might decide to send you a check, or you can move the funds to a new account.
Another option for your 401k plan is to transfer it to your new employer’s plan—that is, if you’re moving to a new job immediately.
If your new employer offers a 401k plan, you can directly or indirectly transfer funds from your old to your new retirement account.
With a direct 402k plan roll-over, you fill out paperwork and have the former custodian move the funds to your new account.
An indirect roll-over means you have to cash out the funds and deposit them to your new plan within sixty days.
Additionally, your former custodian will keep 20% of the funds for tax purposes for indirect transfers.
And this means that you’ll have to raise the 20% before depositing the funds into your retirement account to avoid penalties for early withdrawals.
You can move your savings from the 401k plan to your IRA, available through your bank or a brokerage firm.
Consider an IRA provide that is less costly and move your savings to this new account.
The benefit of considering an IRA is that your savings will grow tax-free.
Whether you’re switching to a new job or quitting the corporate world altogether, it is important to consider options to utilize your employment benefits.
5. Focus on Reducing Debt
Moving out of employment with debt to pay can put you between a rock and a hard place.
It is crucial to evaluate your debt and find ways to reduce debt before cutting ties with your employer.
Do you have unpaid high-interest debt like credit card debt? A recent study by Experian, averages credit card debt to be $5,313.
You can consider paying off your credit card debt before quitting your job, so you don’t have to stress over accruing high-interest rates.
Luckily, there are proven strategies to help you settle your credit card balance faster.
Once you audit your credit card balances, you can use various strategies to bring the balances to zero before quitting your job.
You can use the debt snowball strategy, which ensures that you pay off small debts as you move towards settling bigger ones.
The little victories of paying small debt can motivate you to eliminate the significant credit card balances.
Alternatively, you can use the debt avalanche strategy where you focus on reducing high-interest credit card balances to zero.
This debt repayment strategy can take a while because you’re tackling huge debts. However, the exciting news is that you will save on high-interest charges.
Another strategy to help reduce your debt is to capitalize on the 0% APR introductory offer by moving your credit card balances to a new card.
Taking advantage of the introductory offer means paying off your debt interest-free during the initial period.
Most providers offer a 0%APR intro offer lasting six to twenty-one months, and considering a provider with an extended intro period is an excellent idea.
Lastly, you can consolidate your debt with personal loans.
It would be best to streamline your finances, including debt, once you’re out of work and don’t have a consistent income stream.
Consolidating credit card debt is an excellent way to focus on a single debt.
You could get a lower APR with a personal loan than with credit cards, making it easy to reduce your debt.
6. Create new ways to make money
Another excellent money mover before cutting ties with your current employer is to create passive income streams.
If you’re thinking about launching a side hustle to quit your full-time job, you’re lucky because there are tons of side hustle ideas to create your dream income stream.
The best thing about passive income side hustles is that you can manage them while still working your 9-to-5 job.
You can consider resigning once your side hustle brings in a substantial income to handle your future financial obligations.
Some passive income ideas to try before quitting your day job include dropshipping, blogging, freelancing, affiliate marketing, influencer marketing, teaching English online, etc.
You can also offer consultancy services, social media management, sell photos or do online surveys.
Conclusion
Re-hire survey by CareerArc shows that 6% of unemployed workers will be looking for new jobs.
And although The Great Resignation is creating millions of job opportunities, it can be quite a hassle to secure a gig immediately —thanks to a competitive market.
Don’t make hasty decisions to leave your job before saving enough to cover your expenses.
