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Planning a Career Change? 4 Ways to Financially Prepare

Career Change

Changing career paths requires a lot of thought and planning especially financially. When planning a career change, do as much research as possible first. Make sure you understand the education, certification and experience required. Most importantly, research the income potential for the new career field as well as within that industry. If you may earn less than you do now, make sure that you financially prepare for the possible pay cut. If you are considering going back to school to enhance your education or obtain a degree, financially preparing for the possible added expenses is critical.

Here are four important things to do when planning a career change.

Save More Money

Make sure you have enough money saved for when you decide to leave your current job or go back to school. Put extra bucks in your savings account to help with maintaining your current household expenses should your existing income reduces or stops. Although most financial advisors suggest having up to six months of income in an emergency savings account; the amount of money to save may vary based on a person’s household expenses and lifestyle. Saving as much money as possible during the planning stages will help you maintain your family’s current financial stability when you make your career change.

Reduce Nonessential Expenses

Cutting back or cutting out certain expenses will be a big help during your career transition. Doing things like lowering cell phone plans, reducing or cutting out cable expenses or minimizing dining out can save you hundreds of dollars per month. Also, reevaluate other expenses like auto and homeowners insurance or reduce excessive usage of utilities to reduce expenses.

Estimate Your Education Expenses

Invest in your training and development prior to leaving your job, before entering into a new career field. If you are considering going back to school to prepare for your new career, take classes related or required to that field or industry. Investing in specific classes or certifications may yield higher income potential in the new career field. Research and write down all the education expenses involved with going back to school or getting the necessary certification. Once you know the estimated education expenses, you will be better prepared to include them in your household budget or spending plan.

Start Networking

It’s not only what you know, but it’s sometimes who you know when it comes to a successful career change. Most people do not include networking in the financial planning of a career change, but networking can become costly if not done wisely. Start networking with other professionals by going to networking events or conferences related to your new desired career field. Networking doesn’t have to cost lots of money. Start off by attending targeted events where people in your new career consideration will be in attendance. Look for industry associations and start with their small events. The professionals you meet may become great resources of information and connections for possible job openings and other career field referrals.

Although changing careers can sometimes be stressful and intimidating, it can also be an exciting journey to a new career when properly prepared for. Best wishes on your new career!

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