Changing careers – How to be Financially Prepared
The idea of changing careers can be incredibly daunting. Despite a desire to move forward, it’s often difficult to make the leap, even if a new field is more satisfying and lucrative. To change fields successfully, it’s important to be mindful of the financial considerations that go into a career change. While the thought of dealing with possible financial blips can be stressful, with proper preparation, you can feel empowered to make the switch. Here’s how to get financially prepared for a career change.
Create a Financial Emergency Fund
A financial emergency fund is important for having financial security and stability when you’re changing careers. Financial emergency funds can help cover expenses if you find yourself out of work unexpectedly or transitioning from one job to another within an industry. As a general rule of thumb, you should aim to save anywhere from six months to one year of living expenses before making a career switch.
Building an emergency fund is one of the best gifts you can give yourself before making a career change. It can provide a measure of security as you go through a period of job transition and give you peace of mind as you explore new employment options.
Understand the Cost of Education
If your career change involves retooling, you’ll need to consider what education and certifications may be needed. Depending on the field, tuition costs and certification fees can add up quickly, so it’s important to understand what the costs are and research your financial aid options.
Many employers offer educational reimbursement programs which may cover the cost of tuition and certifications. And there are other options available, such as scholarships and grants, so be sure to explore those as well.
Research the Salary Range
Understanding what the salary range will be in your new role is also key to better prepare for a career change. As you transition to your new field, you’ll want to ensure you’re earning comparable compensation to what you had been earning in your previous occupation.
Fortunately, there are several ways to research salary information. Job postings, recruitment websites, and salary database sites are all helpful resources. For even more in-depth salary information, you can use professional associations and online communities in the field to learn more about the industry and average salaries.
Analyze Your Potential Career Change
If you’re planning to make a career switch, it’s important to analyze the potential financial outcome of the transition. Before you make any moves, bring together all the information and resources that you’ve gathered and consider what it all means. Create a financial spreadsheet and start to look at how your career change might affect your finances.
Analyze the different scenarios and consider what you think is most likely. Be sure to include factors such as cost of education, salary potential, potential job market and other risks. When you complete your analysis, you’ll have a much clearer understanding of how everything matches up to one another and how you can best financially prepare for the change.
Prepare for the Unexpected
Life is unpredictable and it’s important to always have a plan B. Even with the best of financial planning, there’s always the possibility that things can go wrong when switching jobs. So, it’s important to prepare for any potential scenarios.
The most important thing is to remember that the most successful career changes often take several months, sometimes even years. So, even if you create a financial plan, it’s essential to keep it flexible and be ready to adjust your budget to fit changing realities.
Other Ways to Help Your Career Change
In addition to financial preparation, there are several other things you can do to better prepare for a career switch. Here are a few tips to keep in mind:
Stay Positive
Making a career change can feel overwhelming but keeping a positive attitude can be a great way to stay motivated and stay on track.
Network
Reach out to friends, family, colleagues and even alumni of your former college or university. The more contacts that you have in the industry, the better your chances for success down the road.
Be Patient
The career change process can take quite a bit of time, so it’s important to remain patient. Take the time to build a job search plan, make sure you’re prepared for job interviews, and commit yourself to staying focused on achieving your goals.
Changing careers can seem daunting, but with proper financial preparation and proper knowledge of the industry and job market, you can make the transition successfully. Making a plan for your finances, understanding the cost of an education, researching salary ranges, and analyzing your potential decisions are all key. Furthermore, it’s important to remember to network, stay positive, and maintain patience. All these things taken together can help you securely transition to your new career.
