The Costs of Changing Careers
You’ve been thinking about a career change for a long time. You’re bored with your job and you’re not progressing at the office. You’ve considered your career options. Frankly, you’ve wanted to do a particular type of work since you were 20 but it just wasn’t in the cards.
Perhaps this is the right time for a career change. Are you financially prepared to switch?
Ponder these points before you go after the job of your dreams:
1. What don’t you like about your current job? It’s important to clarify why you’re unsatisfied with your job.
· For example, maybe the office moved and your commute is doubled. Or you got a new boss who doesn’t seem competent. Perhaps the company outlawed overtime or changed your job description to add work for you. Be frank about why you don’t like your job right now.
· This step must be done first as it will reveal the true reason(s) you want to quit. Plus, you might realize the issues frustrating you are actually fixable.
2. Will you need training or education for your new career and how much will it cost? What do you need to know to be successful in the work? How will you obtain the knowledge or skills? It might take some time and money, so it’s wise to make an achievable plan.
3. Do you have money saved to help you through the transition? If you’ll require some training or time to hone skills, you’ll be working on those things and not bringing home the bacon. Therefore, you’ll need some cash stashed for living costs.
· If you’ve established a healthy pattern of saving over the years, you can fall back on it. Still, you’ll want to figure out how long you’ll be out of commission in terms of earning to estimate how long you’ll be living on savings.
4. Do your research upfront. Before you leave your current position, do your homework. Find out what people earn who do the work you desire. Will you experience a pay reduction?
· Access online sources to determine average salaries of people in your dreamed-about career. Can you live comfortably on the salary? What are the chances your earnings will grow over the years?
· Try to find someone who does the work now and arrange to sit down with them to ask some questions about their career. In sum, take special care to gather info you need first about your dream career, before quitting your current job and diving in to the unknown.
5. What will switching careers mean in terms of your health insurance? As you know, health care is so expensive that it’s practically impossible for any average U.S. citizen to pay it. Therefore, consider what will change about your health insurance should you switch jobs.
· Is your health care insurance now connected with your job? How much do you pay for it? What will it cost when you switch careers? Your health insurance is a big-ticket item that you mustn’t take lightly, particularly if you’re also covering your spouse and children.
· Definitely have a plan on how you’ll handle health insurance should you decide to walk away from your current job.
6. Is it possible to start saving big now? In the event you’re pondering a job change, you can expect to experience some personal and financial upheaval if you decide to switch careers. It makes sense to start saving extra money now to pad your emergency fund.
· You might not be able to anticipate every single financial demand that will occur because of switching careers, so any extra funds you save will provide protection for you and your family.
If you consider all these points when thinking about making a career change, you’ll be as financially prepared as you can once you decide to take the leap into an exciting, new job.
-Tiffany M. Vaughn, CPA