Career transition can be a stressful experience for anyone. Finding a job that aligns with your values, career goals and meets financial expectations at the same time is a difficult task. Fear of struggling financially in making a change is one reason people don’t change their jobs. When you are changing your career or even in unexpected circumstances of losing a job, the concern is always about not having enough money to survive. Discover 5 tips on how to plan financial flexibility for a career change.
Changing your career or switching your career completely might require starting from the bottom, and that often means taking a significant pay cut.
Before you make an actual move, you have to spend some time getting it organised. Big part of it is financial planning and financial security during transition time. It’s important to understand how much you spend each month and how much you need to earn your future job to meet your financial goals.
How to start planning your career transition budget?
1. Build up your savings
We all have heard that we should have some savings. But the question is – how much? It is advisable to have at least 6 months of salary. When you don’t have a job for few months, such savings can cover your basic expenses. It also gives you the flexibility to look for the best possible offer, instead of accepting the first one simply because you are under pressure to cover your day-to-day expenses.
2. Understand your expenses and your baseline
Not all of us know how much we spend during a month, and we usually don’t have the habit of tracking it. Build your monthly budget and understand your spendings. Think about anything you can do to lower it down during emergency times and what would be your baseline.
There are also plenty of budget calculators available online:
3. Cover your debts
Make a list of your outstanding debts and create a plan for how you can pay them off quicker. Instead of worrying about them during a change, better to use that energy in the future on finding your next play.
4. Plan your transition ahead
Think about how you can benefit from your current situation, knowing when is the best time to leave. It’s not always possible, especially if you lose your job by unexpected redundancy or another factor. But a good piece of advice was shared by Wladimir Klitschko, during the Web Summit in 2018, who said that “it’s important to prepare yourself in good times for bad times, because the bad time will always go to come up, no matter how good you are at something. Bad times or challenging times always will appear. To prepare for it, you have to do it during good times.”
Take most out of your current role and consider what else you can learn from the current positions. Think about your current employer as your investor, build the right mindset, and don’t feel like you are in prison.
When you are determined to change your career, remember that this will not happen overnight. Use your time in your current role to get the benefits from it. Complete free certification, courses, or ask for additional job responsibilities that can teach you skills useful for your dream career.
5. Increase your financial flexibility- finding a Side Hustle
If you want to boost your finance, you can also consider an additional part-time job, freelancing in the field you want to move to, get valuable experience, and develop your next role skills.
A temporary side hustle can help you gain extra budget to afford career change in the future and create income security during the transition.