How to Financially Navigate a Career Change

From the moment you receive your first job offer to the time you’re fully immersed in your profession, there may come a time or two when you wonder if there is something else out there. It might be a case where you’re reanalyzing your career passions (“Is this what I really want to do?”). From talking to my kids and younger co-workers in their mid-twenties to early thirties, this is an incredibly common feeling.

Or maybe you crave new experiences and growth within another industry, which is common for some of us more…uh…experienced workers. We’ve been doing the same thing for a couple of decades and the time feels right to move on to that thing we’ve been wanting to do for the last few years but couldn’t — or wouldn’t — take the next step. Whatever the reason, making a career move is an exciting time and involves some planning on your part. Especially for financial planning.

Make your transition to a new career smoother

It’s never easy experiencing a change as impactful as this one, as it creates disruptions in your routine. But, with the right mindset, some organizational skills and planning, plus networking capabilities, you can increase your potential success when immersing yourself in a new venture.

Changing your career involves a lot of steps. There is always the possibility you must go back to school to get the right skills. However, having a thought-out financial plan is important to consider as well. A successful system for your money takes time — establishing a budget, tracking and monitoring your spending behavior, and debt management is all part of this process.

If you’re looking to switch your career goals the financially friendly way, here are four tips to consider:

1. Adjust your budget accordingly

   You’ll probably experience a salary change along with your new career choice, and if you’re heading in a new direction, chances are you might take a dip in salary. Therefore, it’s important to prepare your savings ahead of time. If you know you’ll be adjusting to a new payment plan, act as if you’re living through this change right away and budget the appropriate amount. The more ahead of the game you are with this, the better prepared you’ll be when your saving and spending limits change.

   To keep yourself organized, try a downloadable app for your budget. Some include additional features that can aid this financial transition period too — giving you a way to get paid earlier than expected and prepare for the future through the use of a checking account that automatically contributes to your savings over time.

2. Handle your debt

   If you’re dealing with student loans or credit card debt, for example, it’s important to keep up with payments instead of lessening their priority. Especially with the financial changes that come with a career change. If you’re handling a lot of debt at once, develop a plan, set achievable financial goals and always contribute whatever you can, even if it’s a small amount. Making a written list or creating a calendar schedule for your payments provides a reference to how much you owe and when certain bills are due during a monthly span. Staying on track with handing both your career and financial life simultaneously is the key to a successful switch in careers.

3. Look for changes in payroll policies

   If you’re zeroed in on a new company, think about how they get paid and how it might differ from what you have now. For instance, if you’re used to a paycheck every two weeks, but this new job only pays once a month, your budgeting skill will be more essential than ever. Or maybe you’ll switch from a salary to an hourly wage for example. If this is the case, it could require an adjustment to your finances. If you’re far enough along in the process, it’s okay to ask payroll questions. Another way to gain information about an employer’s payment procedure is through their handbook. This is a more informative reference to a company’s essential information and could provide additional insights that you may have previously missed. It’s never a bad idea to be overprepared, especially when your money is involved.

4. Allocate money for a potential move

   If your new career decision creates the need to relocate, it’s important to think about the possible expenses you’ll have ahead of time. From renting a moving van to driving and paying for gas, and even a possible increase in rent, these additional payments can add up quickly! Due to several additional expenses, it may be necessary to change your budgeting strategy. Whether it’s the amount of money you’re saving, or altering the spending limit you’ve set for certain aspects of your lifestyle, prepare in advance to adjust your move accordingly.

Switching your career may seem like a daunting idea for your financial health, but the more organized and prepared you are for what comes with it, the more your budget and checking account will thank you. Approach your personal finances with goal-setting tendencies and take each of them one step at a time for outstanding success.