Affording Career Change: Cash Flow Management

Affording Career Change Cash Flow Management

This is part 1 of the 2-part series, Affording Career Change, offers 8 tips for managing your cash flow. Part 2 covers the other critical issues of debt reduction, employee benefits, and taxes.

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 might take awhile to acquire new skills and come up to speed on a new job function and a new industry. But in time, your salary can recover and even surpass former compensation levels, especially if you tie your passions to your work.

Some of the questions people ask 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?

To research and write this article, I consulted with the Career Change Financial Planner, Sherrill St. Germain. Together, we have written 15 financial tips, which we have grouped into four major categories. In this article, we’ll cover the first 8 tips on the all-important subject of managing your cash flow.  See Part 2 for the last 7 tips.

Cash Flow Projections

1. Do your research:

Let’s assume you already know the new career or field you want to enter. First, 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 of ways to do this.

There are numerous websites available with salary data; my favorites are,, and

More importantly, however, talk to professionals already working in your desired field, and get specific information on how much you can expect to make moving into the field and what the long-term prospects are for total compensation, job security, and advancement.

2. Determine your training and professional development expenses:

Before you can prepare your reinvention budget, you should determine 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 field how much they spent on training and where they received it. Research professional associations in your new field and see how much they charge for training and certificate programs.

3. Professional association memberships:

Professional associations provide ideal networking opportunities to ease your transition into 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 can be a great way to network and build relationships with senior individuals in your new industry.

4. 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?

If your career change involves starting a business, the impact of these purchases could be reduced if they qualify as business expenses, so be sure to familiarize yourself with related income tax laws or consult with a good CPA.

5. 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 your job sooner?

6. Have a backup plan:

If you have a backup plan or Plan B, you’ll feel much less anxious during the reinvention. Work with your career coach to develop a time line for your reinvention as well as a backup plan, and match that up against the financial resources you have available to fund the change. Is there sufficient wiggle room? What will you do if the transition takes longer than planned? How will you begin to generate cash?

7. 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. One good way to do this is to periodically go back and compare your actual expenses to those you estimated in the Cash Flow Worksheet. (More next month related to this issue.)

8. Think long term:

Before you make your career change decision, be aware that a shift to lower income can affect your other financial goals, most notably retirement, in ways that may not be obvious. For example, if you haven’t already built a solid income history, your Social Security benefits might be reduced. Further, if you are less able to save for retirement, you could find that you need to work longer. On the other hand, you might be not only willing, but happy, to keep working to a ripe old age – as long as you’re in your target career.

Bottom Line

Cash flow is only part of the whole financial analysis you should do before you make your career change, or even after you launch it. In Part 2, learn how to manage the other major issues impacted by your career change: debt, benefits, and (of course) taxes. Better to understand and plan for these issues before you start than to get blind-sided by them later.

Randi BussinAbout the author…

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, including DISC assessments. 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 ( and her own blog, which offers advice on career transition, job search, and labor market trends. Follow Randi on Twitter @Aspire4Success.
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