How to Balance Your Finances and a Career Change
Photo by Alesia Kazantceva
Originally Posted On: https://www.sarah-j.com/2020/07/28/how-to-balance-your-finances-and-a-career-change/
Are you pondering whether to make a career change and take a new direction in your life? If so, you aren’t alone. Fifty-eight per cent of people are willing to earn less income to make a career change!
You may let personal finances be holding you back from making the leap, but you can change careers by having the right plan in place. Taking the time and effort to do this now will help you well into your future.
Read on to learn how to balance your finances and a career change!
Wants vs. Needs
Before you change careers, consider the things you want versus the things you need in your life.
What are the things in your life that you can’t afford to live without? These necessities include things like your home and vehicle. What are the things you enjoy but can do without? These include things like material goods and other non-essentials.
By having a better understanding of your wants and needs, you will be able to determine what you may be able to cut out of your budget to save money as you make your career move.
Understand Your Financial Comfort Zone
You should have a keen understanding of your financial comfort zone to be more confident as you undertake your career change.
Determine your financial comfort zone by considering the timeline you envision for your life. Where do you see you and your family in six months? One year? Five years? The answer to these questions will help you have a better sense of the income you need to make your dreams a reality.
It’s also important to think about how you can achieve those goals while doing something you love. Would you rather work in a new career in six months by saving money, or continue in your current job unhappy? I know my answer!
Consider Your Risk Level
Balance finances and career change can be a challenging task. Take a realistic look at your risk tolerance before you decide to change your career.
If you are risk-averse, you may need to build up a nest egg or emergency fund before you change careers. Even if you aren’t someone who avoids risk, what will it cost you to make your career change or begin operating your own business?
You may be able to find ways to save money in your personal life to set it aside to grow your business. Otherwise, you can turn to other options like crowdfunding or applying for a small business loan.
Find Other Ways to Cut Bills
You should avoid staying in a career you don’t enjoy because of your monthly bills.
One of the ways to feel more confident about a decision to leave your current career is by finding other ways to cut down on your bills.
For example, you may have current monthly bills like your mobile phone, television package, and mortgage. Are there ways for you to re-negotiate your bills so that they cost you less each month?
You may learn there are much cheaper options for monthly bills that will allow you to maintain a nice quality of life without sacrificing too much.
Discuss Finances With Your Partner
If you are married or in a serious relationship, it’s worthwhile for you to discuss finances with your partner.
Is that person willing to take on some of the extra expenses with their income while you begin your new career? By including your partner in these financial discussions, you will begin your career change by being on the same page together.
It will also help you feel more at ease with the financial uncertainty you may face as you begin your new life.
Consider Other Sources of Income
There may be ways for you to supplement your income during a career change by earning money doing other things.
You may consider mini gigging to do other jobs on the side that will allow you to earn extra money. For example, you could take on contracted work or other freelance opportunities that will supplement your income.
Other effective but unique ideas may be deciding to rent your garage as a storage area, or taking on a roommate to receive rental income to use for your bills!
Thinking outside the box before a career change will enable you to make the best decision for you and your loved ones.
Consume Less, Save More
Overconsumption is at the root of many financial hardships for people across the country. You can make the career change you’ve always wanted by consuming less and saving more.
The average debt for UK households is over £15,400! While you may not be able to avoid taking on some debt, you must forego running up bills that you can’t afford to pay back.
For example, although credit cards can help you increase your spending power, a good rule of thumb is that if you can’t pay off your balance when it comes due, you can’t afford it. Certain emergencies may require you to charge an expense you can’t pay off right away but be sure that it’s not the norm.
By consuming less and making longer use out of the things you buy, you may find that you don’t need to earn as much as you thought you did to live a happy and comfortable life.
Make a Career Change
A career change can be an exciting but challenging time in the life of you and your loved ones.
Despite the obstacles you may face in your personal and professional life as you transition to your new career, the change can be one that makes you a happier and healthier person than you were before.
At Sarah-j.com, I use my experience and training to help people live better personal and professional lives. I am a personal, business, and career coach that helps people find the best way to fulfil their goals.
Contact me today to begin taking the steps toward a positive change in your professional career!