Switching your Job? Tips for managing your funds during this time

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After the Pandemic, many people are considering job switches for various reasons. The primary reason would be able to match their work with passions and beliefs that are driving them towards developing a new career path for themselves. However, one aspect that many people overlook while thinking about a job shift is proper financial planning. 

This article is directed toward those people who are considering switching their existing job very soon. One cannot stress enough how important it is to be financially prepared while doing so because it is impossible to predict how long it will take for you to find the ideal position you are looking for in the market. Thus, for the safe side, have funds in your bank account that could cover your expenses for 6-8 months. This way, you will be able to focus on your new career path without worrying about the bank balance, at least for a short while. There are other ways to keep in mind before you switch jobs, such as:

Build your emergency fund: One cannot stress enough the importance of building an emergency fund before you leave your job. It is your savings that will be used for emergency expenses, if it happens, without having to depend on your relatives and friends. Having a backup of funds will also enable you to survive for a few months after leaving your existing job. If you don’t have medical insurance policy and don’t want to depend on an Indian bank personal loan or another line of credit, then building an emergency fund should be your priority to cover unforeseen events. 

Do a financial reality check: For many people, their salary is the sole income source that helps them run their house and save for the future. If you are one of those, you cannot afford to take the decision of leaving your job on a whim. Planning from your side s required before you decide to take the plunge. Sit with your income and expenses sheet and calculate your monthly obligations such as school fees for your children, monthly rent, or other fees you are obligated to pay every month or fortnight. You cannot depend on your emergency fund to pay for monthly obligations. Hence, carefully calculate when would be the best time to submit your resignation and accordingly save money.

If needed, find a side job: Not every dream and passion project can be achieved within 6 months or in a year span. If your whole income depends on your salary, you should consider finding a side job that helps you pay the necessary expenses. It will also help you monetize your skill set. There are many websites offering freelancing projects in various domains– you can sign up there and join such groups on social media platforms. A side hustle will help you develop your talent while letting you earn more money with your job for your career transition fund. 

Having said that, there could be times when your emergency fund might dry up or isn’t enough to cover emergency situations. During those times, availing Indian bank personal loan or from another financial institution can help you sail over. You can make use of the Indian bank personal loan EMI calculator to calculate your monthly outgo. However, while availing of a personal loan, do ensure there are hidden charges that you should know about beforehand. Here is the list of important hidden charges:

Late payment fees: In case you do not pay your EMI on time, the bank you took the Indian bank personal loan form is liable to impose late payment charges on you. The charges can easily swing from anywhere between 2-3% depending on the EMI costs.

 Processing Fees: When processing an Indian bank personal loan or any other loan from a different bank, financial institutions are liable to charge nominal charges to cover the cost incurred during the application process and disbursal. The amount usually depends on the amount you are borrowing from the bank. 

Foreclosure fees: These charges are levied when you close your Indian bank personal loan or any other from a different bank before the end of the tenure. For example, if you opted for a 5-year tenure, but due to the influx of money from other sources, you decided to close your personal account within 4 years, then you become liable to pay for the foreclosure costs. 

Is there any other way to avoid hidden charges?

Yes, there are a few steps you can take to avoid unnecessary hidden charges on a personal loan. 

Carefully assess your loan agreement: Before you avail of a personal loan, it is considered good practice to calculate your monthly outgo using an Indian bank personal loan EMI calculator but before availing of the loan, assess the loan agreement carefully. Banks usually share an agreement with you to sign before they can sanction the requested loan amount to you. It is suggested to read that document carefully as it includes all the terms and conditions relating to the debt and also includes all the hidden charges you should know beforehand. 

Connect with their customer care: The bank from which you are taking a loan will help you in different ways, such as educating you on how to use the Indian bank personal loan EMI calculator and making you understand the different terms written on the document. Understanding the terms will significantly reduce your chances of paying hidden costs in the future. By carefully reading the document, you can avoid hidden processing fees, high-interest rates, and more.

If you have a good credit score and have never defaulted on a loan before then, most financial institutions will easily give you a loan. You can use the EMI calculator available on most of the bank’s websites, such as the Indian bank personal loan EMI calculator, to understand your monthly outgo. By availing of a personal loan, you can carry out your job search without worrying about the urgent expenses that need your attention. Just ensure while you are availing of a personal loan, you are aware of the hidden expenses that are added to the personal loan. While a personal loan can help you fuel your financial choices and offers you flexibility like no other type of loan does so in terms of end usage and not requiring you to present collateral, it comes with several associated charges. If one isn’t mindful of the same, it can cause you to spend more than you thought. While you are in saving mode, don’t forget you are saving up for your dream job. Hence, spend time drafting a blueprint of how you will proceed after quitting your job. This will help you visualize your dream/passion. 

Also Read: Five Things You Should Know Before Building An App

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