Manage Money

6 Best Tips To Managing Your Money in a Career Transition

It is never a good thing to be stuck in a job or career stream you no longer love. Maybe your professional growth is stalled or maybe you just want to change into another career stream of your choice. At such points of time, changing your career may seem like a no-brainer, and yet you still need to get your finances your order before doing so. 

For instance, this will be a grave mistake if you make such a huge transition without having an emergency fund on hand. A career change can easily disrupt your finances. If you’re not careful, you may have to settle for a low-paying job in an industry sector you loathe while having considerable expenses on top of that.

In this article, we are going to show you that it is easy to make such a transition. 

Here’s how to do it!

  1. Set a realistic but ambitious expectation about your next paycheck: Most people change careers for the money or paycheck. Yes, you do want your dream job in a fantastic company, but keep it realistic. For instance, you want your dream job, but do you have any plans for achieving it? Making castles in the air can be very harmful, especially when changing jobs.
    Know what salary you’ll be asking for in your next job interview. What is the existing salary level for the position you are applying for? Do you have the skill the position asks for? At this point, you also have to think whether you’ll be able to handle making the transition. You may not find a job for a couple months. Can you financially handle that? 

  2. Start living according to your new salary: If your new salary is less than what you were making, it means you have to readjust your finances. Thus, right from day one, you need to make small steps right from day one. For instance, you have to make a budget based on the new salary. You might not be able to make the same expenses you are used to. 

  3. Make a career change a part time job: Making a career change is not just a big decision, but it takes considerable time. It does not happen overnight, but that’s a good thing. You get enough time to prepare for a new role. You can make the transition easier by knowing which certifications and training you need for the new role.
    It is important to know which certifications and training you need for the new role.
    You can pursue these after your current job or over the weekend, whatever works for you. If the new position requires some experience, you can gain that with part-time gigs and internships. 

  4. You may miss a few month’s salary: You may miss a few cheques so be ready for that. So before you actually quit your current job, find out how much savings you really have. If you can’t find a job even after a couple of months, can your savings carry you through this transition phase? You have to plan this ahead. You don’t want to be caught by surprise, end up spending all your money and having to take a high-interest loan.

  5. Make sure you have your own health insurance: When you quit your current job, you may also be forfeiting employer-given benefits like health insurance. This is why you need to get your own health insurance, no matter if your new employer gives you one or not. It will be of much use in case there is a sudden medical emergency.

  6. Build a strong network: While waiting to make the switch, why not use the time to build a professional network of people who can help you in making the transition. Connect with industry leaders for their advice. 

A career change can be risky, but if you plan it well ahead, it won’t be a problem for you at all.

 

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