Getting Started Financing Your Career Change
Once you have decided that you want to change careers and you have identified what you want to do, you may find that this reinvention could involve a temporary cut in pay. This is a real concern and you are right to be worried, but it does not mean you have to give up hope-it is still possible to pursue your passion!
It may take a while to acquire new skills and come up to speed on a new job and industry. But over time, your salary may recover and could even surpass former levels. Some of the questions I often get from clients include:
- How do you live and prepare for this investment period?
- What are some of the planned and hidden costs?
- If I want to change careers in a year, what can I do now to prepare?
Below are some tips that should help you prepare for this important event and mitigate your worries about finances.
Do your research:Let’s assume you already know the new career or field you want to move into. Firstly, you need to do your homework and determine how much you can realistically make in the first few years of your reinvention. There are a couple ways to do this. There are numerous websites available with salary data; my favorites are www.salary.com , www.salaryexpert.com, and www.payscale.com. More importantly however, talk to professionals already working in your desired field and get clarity on how much you can expect to make moving into the field and what the long term prospects are for compensation and advancement.
Start tracking your expenses:Create a budget for your expenses and start tracking where you are spending your money. Are there places where you could tighten your belt? Also, consider that if you are working in a job you are passionate about, you may feel happier and less stressed, which could result in spending less money on things to help you manage your stress (doctor’s visits, massage, facials, prepared meals, etc.).
Build a cash cushion:Even if you reduce your expenses, it is probably best to have 3-6 months of a cash cushion especially if you expect to be earning less. If you think the reinvention may take longer, and oftentimes they do, consider putting aside additional funds to ease your stress levels.
Determine your training expenses:Before you can prepare your reinvention budget, you need to know how much you are going to need to invest for training and professional development. Do your homework and ask a lot of questions. Ask those in your target new field how much they spent on training and where they got it from. Research professional associations in your new field and see how much they charge for training and certificate programs.
Professional association memberships:Professional associations are critical to switching to a new field so be sure to include the membership costs of joining one or two associations. Also, be sure to include attendance at a professional conference as this may be a great way to network and build relationships with senior individuals in your new industry.
Take on extra work to finance the career change:Is there an opportunity for you now to grab some overtime hours or extra work? You can use this extra cash as your career reinvention nest egg. You could also consider taking on a Saturday job or a one day a week evening gig to bring in some extra cash.
Get a handle on your insurance costs:If your current employer provides medical insurance, calculate the costs of continuing that coverage with COBRA until you have landed a new role with benefits. Also, if you think your coverage may be less in the new field, consider moving up some of your elective visits and procedures while you are still employed.
Technology:Are there any hidden technology costs that you will need to make this transition? Will you need a new computer or laptop at home?
Volunteer to get experience:Is there a way to position yourself for your reinvention so you can be hired more quickly? Can you volunteer or intern to gain valuable experience which will help you land sooner?
Give yourself some credit:It is probably best not to make any significant purchases prior to your transition. But, if you have to, see if you can make payments as opposed to paying in one lump sum. Also consider getting a line of credit while you are employed and have steady income. This will help you feel comfortable about having emergency funds available.
Have a back-up plan:If you have a back-up plan or plan B, you’ll feel much less anxious during the reinvention. Work with your career coach to develop a timeline for your reinvention as well as a back up plan. What will you do if the transition takes longer than planned? How will you begin to generate cash?
Monitor your numbers:Develop a tracking mechanism for keeping an eye on your goals and financial numbers. Know what you are spending to reinvest in yourself, how much you are making and how much you are spending. It is hard to ignore the facts when they are in writing.
This all may seem like a lot to think about, but think about how happy and excited you’ll be doing work you are really passionate about.
© Copyright, 2008, Randi Bussin. Used with permission.
Job-Hunt's Career Change Expert, Randi Bussin, founder and president of Aspire!, is a career coach and counselor with more than 25 years of business, entrepreneurial, and career counseling experience. Randi has experienced several major career transitions (from corporate to small business owner to career counselor to coach) and personally understands the effort and commitment involved. She has appeared on public television’s “Job Doctor,” and is a frequent contributor to Bridgestar’s Leadership Matters newsletter, The Ladders job-search Web site (www.theladders.com) and her own blog, which offers advice on career transition, job search, and labor market trends. Follow Randi on Twitter @MyReinventure for more job search and career tips.