(This article was first published in Times of India.)
No one likes notice periods, do they? Those 1-3 months are honestly boring. You’re eager to start a new job or take a break, and the notice period feels like you’re stuck in time.
But it doesn’t entirely have to be wasted time. You can actually make good use of the notice period by getting your personal finances sorted before your next gig.
Here are 2 things I have always done during my notice period and 1 thing I wish I had done during my last one.
Note down all the info you’ll need
There are certain details that we don’t really pay a lot of attention to when we’re working with a company. But we’ll need these details when we move to a new job. Details like our EPF UAN and tax-saving declarations.
The UAN is an uninversal account number for our Employee Provident Fund account. It is a unique 12-digit number that is allocated to you by the EPFO. Your UAN, just like your PAN, can remain the same throughout your career.
Your EPF is your retirement savings, a part of which goes out of your salary whether you like it or not. The corpus that gets accumulated in your EPF account can be accessed through your UAN. It’s best to give your new employer your existing UAN so that you can have one EPF account to track and use.
At the same time, make a note of the tax-saving declarations you’ve made at the company you’re leaving. More so if you’re leaving in the middle of a financial year. You’ll need to declare your tax-saving investments to your new employer as well and having your earlier declarations handy will help.
Plan to add more to your emergency fund
In most cases, people see a hike in salary when they change jobs. In such instances, one thing I’ve always done is beef up my emergency fund. I keep 6 months worth of expenses in an emergency fund that I can access in case I’m unable to earn for some reason.
With an increased salary, I increase my emergency fund as well. Because more money invariably leads to a change in lifestyle and higher expenses. So the older emergency fund wouldn’t eventually be enough.
If you don’t have an emergency fund, you should start building one right away and maintain it in line with your increasing income.
Plan to have 3 months of expenses handy
This is one thing I didn’t do when I changed jobs earlier this year. Every company has a different Full-and-Final settlement (FnF) policy. Most companies usually settle an ex-employee’s pay in around a month, but you should be prepared if it takes longer.
Sometimes FnF can get delayed, as has happened in my case. Your expenses can still be managed if you’re starting a new job right away. But if you’re not, then delayed FnF can be a stressful experience.
What you should do is have at least 3 months of expenses accessible. I didn’t plan for a delayed FnF and had to dip into my emergency fund, which is something I didn’t like because this doesn’t qualify as an emergency.
You can borrow money from a family member for a short period or cut back on expenses and save more till your FnF is sorted. Whichever way you choose, do plan for the possibility of your FnF getting delayed.
Of course, you can also splurge on something before you start a new job. If you’re getting an increase in pay then why not treat yourself to something you’ve always wanted? You come first, after all.
But make sure you plan before you do that. Managing money is as important as earning money.