Changing careers can be a daunting task, both professionally and financially. There are a lot of unknowns when you make the switch - Will I like the new field? Will I be good at it? How long will it take to find a job? - and those unknowns can make it difficult to know how to best allocate your resources. If you're in the process of transitioning careers, here are a few financial tips to keep in mind.
Do Your Research
When you're considering a major career change, it's important to do your research. There are many elements of a career change that you need to consider to support the planning process, including your skills, qualifications, and experience; your goals and values; and the job market. Additionally, you will need to objectively evaluate whether the reality of the new career fits with your vision of what it will be like. With all of this in mind, here are four tips for researching a major career change:
1. Define your goals. What are you looking to achieve with this career change? Do you want to make more money? Have more control over your work schedule? Or are you simply looking for a new challenge? Once you've identified your goals, you can start researching different careers that align with them.
2. Consider your qualifications. What skills and experience do you have that would transfer well to a new career? If you're starting from scratch, what qualifications would you need to attain in order to be successful in the new field? Researching the qualifications required for different careers will help you narrow down your options.
3. Evaluate the job market. What is the demand for the type of work you're interested in? Are there adequate opportunities available in your area? What is the potential for salary growth? Answering these questions will give you a better idea of whether or not making a switch is feasible.
4. Be realistic about the transition. Changing careers is a big undertaking, and it's important to go into it with realistic expectations. Talk to people who have made similar changes and ask about their experiences – both good and bad. This will help you get a better sense of what to expect and whether or not the new career is right for you.
Are Your Finances Prepared for a Career Change
Build Up your Emergency Fund
Picture this: you're finally ready to make the switch to a new career. You've done your research, updated your resume, and landed an interview at your dream company. But then, just days before your start date, you get laid off from your current job. If you don't have an emergency fund in place, you could find yourself in a tough spot financially. Unexpected costs always seem to pop up at the worst possible times, and without a financial cushion to fall back on, you may be forced to take on high-interest debt or make difficult choices about how to make ends meet.
That's why it's always a good idea (if possible) to boost your emergency fund reserves before making a career change. That way, if unexpected expenses arise or it takes longer than anticipated to land a new job, you'll have some breathing room financially until things get back on track again. So before you take the leap and start exploring new career opportunities, be sure to give your emergency fund a little boost. Your future self will thank you for it!
Make a Budget...and Stick to It!
Making a budget is important, but it's only half the battle. Once you've got your budget set up, you need to make sure you actually stick to it. This can be tough, especially if you're used to spending without really thinking about it. But when you're making a career change, it's more important than ever to be mindful of your spending. After all, you may not have a steady income coming in right away, so it's crucial to make sure you don't overspend and end up in debt. One way to help yourself stay on track is to give yourself a weekly or monthly allowance - that way, you'll have some flexibility to spend on things you enjoy, but you'll still be sticking to your overall budget. And if you find yourself struggling to stick to your budget despite your best efforts, there's no shame in reaching out for help from a financial advisor or counselor - they can help you get back on track and make sure you're making the most of your money.
Review your Expenses
One of the first things you should do when making a career change is review your current expenses and make adjustments where necessary. For example, if you're quitting your corporate job to become a freelance writer, you may no longer need to budget for business casual clothing or expensive lunches out with clients. Conversely, if you're leaving teaching to become a lawyer, you may need to start setting aside money for dry cleaning and law library fees. By understanding exactly what your new career will (and won't) require, you can save yourself some money down the road.
Consider How Much Your Career Change is Worth It
Switching careers can be a daunting task. You may have to start from the bottom and work your way back up, or learn new skills that you're not confident in. But before you make the change, it's important to consider how much it's worth to you. What are you looking to gain from this new career? More money? More satisfaction? A better work-life balance? Weigh the pros and cons, and decide whether the potential rewards are worth the risks. And if you're still undecided, remember that you can always talk to a career counsellor to get more information and help you make a decision. Just don't let indecision hold you back from chasing your dreams.