Budgeting for a Career Change

Wednesday, October 17, 2018

There could be many reasons why you are about to change your career. It could be as simple as you are not happy in the one you have chosen and have decided to pursue another. You could have started a family and not be able to dedicate the time needed to your current career, or it could be that you have received a promotion that will make your job totally different, or that you simply want to make more money to help with your situation. Maybe you have decided to seek further qualifications and need the time to complete the work, or it could be that you are moving to a new company. Regardless of the reason, there could be a gap where there is a reduction in income, and you may need to budget for this.

Look At The Whole Situation

You need to consider your whole financial situation if you are thinking of changing career. For instance, if you want further education, can you really afford to give up your current job? If the answer is no, perhaps you should consider something like an online msn fnp program, or an online MBA course. In fact, there are online courses in just about every industry and profession, and this could be the way for you to go. With further education online, you can fit the course into your lifestyle, and work at your own pace.

If you are thinking of changing from an employed worker to a contract worker because it pays, more money, consider the perks that contract workers do not get. They do not get paid vacation time, sick pay or health care as part of their package. When you add all this up you might still be better off employed.

Moving companies can leave a gap between the last paycheck at your old company and the first one at the new one. You will need to be aware of this and budget your finances accordingly. Hold on to as much cash as you can until that first new paycheck arrives.

For those that have started a family, you may want to spend more time at home at less in a workplace. You need to speak to your current employer to see if you can reduce your hours and if not look for another job.

All of these scenarios may mean you could end up doing a similar job to what you do now, and you may feel that that is not exactly a change of career. But changes can happen within your current career that have just the same effects as if you had gone from being a motor mechanic to a hairdresser. Changes need budget constraints if they are to work.

Never Be Afraid To Negotiate

Whatever changes you are making, you want to end up with the highest salary you can get. If your career change is a new job or promotion, check out the salaries being paid for that position online. There are lots of resources to help you in this respect, and they will give you a good idea of how much you should be earning. Do some research and then do not undersell yourself. If there is an industry norm, you should expect to be paid at least that, and if not you should want to know a good reason why. You should never be afraid to negotiate for more money, as although success is never guaranteed, you may get more than you were first offered.

If you are offered a raise without asking, ask for more. One of the perks in some jobs is financial aid to obtain more qualifications. If your employer wants you to gain a new certificate, ask them to pay all the fees, not just a portion of them.

Reduce Your Spending

Not all career changes are for monetary gains, and in fact, many of them are just for a more satisfying work life. You could well find yourself in a position where you are earning less money, but that does not matter if you are a happier person.

You just need to adjust your spending accordingly. Look closely at what you spend each month and see what expenses you do not really need. Do you have old subscriptions still leaving your bank account, or could you do with the book club membership?

You should start by listing essential expenses such as rent or mortgage, utility bills, food, transport and possibly childcare. You should also allow something for clothes that will need replacing and family entertainments such as days out. Once you know how much you need to cover all these things, then you will know if you are going to have a shortfall of money after your career change.

There are often ways of cutting back that on their own do not seem much, but add them together and you could be saving quite a lot of money.

You should also look at any savings plans you have. It is not being suggested that you stop saving, as that would be foolish. Perhaps you could reduce the monthly amount a little though, just to help with your economy drive.

Do Not Increase Your Spending

If your career change will mean you earn more that is great. However, do not fall into the trap of increasing your spending so that it all disappears. A good way is to make a 50/50 split between spending and saving. This will mean you will have more disposable income to spend as you wish, but your savings will grow at a faster as well.

There can be advantages and disadvantages to making changes in your career, but you have to cope with the bad things and enjoy the good ones. For instance, if you have taken on extra responsibilities, you may find the job more stressful, or like some people, you may thrive on the extra duties you have. No one really knows how he or she will react until they have made the change, but always remember that if you are not happy with the way your career is going, you can always move on again.

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