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How To Make A Career Change

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 6 minute read

Your current area of work doesn’t satisfy your professional aspirations, do you see? Don’t be frightened to make a big shift in your professional life. The importance of a job’s quality and the happiness of its employees grows in a labor market when there are more openings than qualified applicants. Many people nowadays are stuck in employment that they find unsatisfying.

Whether you’re looking to improve your financial situation, your level of personal fulfillment, or your work-life balance, it might be scary to make the leap from your present professional path to the one you’ve always wanted to pursue.

And there’s a sense of monetary danger. The key to a stress-free and prosperous transfer is careful planning and a couple of astute financial maneuvers.

9 Financial Moves to Support Career Change

Looking for work can seem like a full-time job in and of itself. There is a significant time commitment involved in doing research, interviewing, volunteering, internships, networking, and studying.

To pay the rent and other expenses until you find your dream job, you may have to take whatever work you can find.

Having a safe financial base to fall back on makes it much easier to change careers. Planning ahead financially will help you remain on top of your bills and devote time to a job search if you decide to leave your current position.

1. Keep your current job.

You don’t have to immediately leave your current job if you’re already employed when you decide you want to switch careers. In the meantime, you should keep your current employment and treat your job search for a new career as a hobby or side business.

There are many skills you can learn and connections you can build at your current work that will be useful in your new field. Lean on supportive coworkers who can assist you in developing your talents in your current employment.

Request as much constructive criticism as possible from your superiors and coworkers. Find out what you’re good at with the help of tests like the CliftonStrengths and the Meyers-Briggs if your company is prepared to foot the money. It’s also possible that your current employer offers training opportunities or study bonuses.

You can still advance in your career even if your employer doesn’t offer formal training by showing initiative and taking on more responsibility at work. If you want to develop marketable talents that will serve you well in your next profession, taking on extra duties is a good idea even if they aren’t directly related to your current one.

2. Budget your expenses and make reductions

Spending less is a simple approach to minimizing your income requirement. You can avoid taking on unnecessary debt like payday loans or credit card payments by carefully planning your monthly budget and cutting back on unnecessary purchases.

If you can reduce your costs, you may be able to work fewer hours at your current job or even quit to explore another line of work on the side.

To save money each month, consider eliminating some of these widespread lifestyle expenditures:

  • Soft Drinks and Other Sugary Drinks. The average American spends $2,238.80 on these delights each year, and that doesn’t include the money spent on medical care related to obesity.
  • A supply of bottled water. In comparison to using a public water supply, the price of bottled water is 2,000 times higher. Do you think you could save money by using a filter or a water cooler service instead?
  • Spent Foods. According to CNBC, the typical American family wastes around $1,500 per year due to discarded food, which is equivalent to throwing away nearly a third of their food supply. To save money and prevent food waste, try meal planning, food preparation, and finding new applications for old products.
  • Get-Togethers For Lunch. The average cost of lunch for a worker in the United States was $11. It is possible to save $1,976 per year by packing a lunch every day.
  • Drinks You Can Get at a Coffee Shop. The price of a Starbucks latte is roughly 13 times that of a cup of Starbucks coffee purchased for home use. If you use the office coffee machine instead of buying your daily latte, you might save over $900 per year.
    If you subscribe to cable TV, dropping it might save you about $1,274.40 each year. If you invest even a little portion of that sum into a streaming subscription, you can save money while still having constant access to your favorite shows and movies.

The savings from making even just a few of these adjustments can quickly add up. Bigger changes, such as reducing your home or vehicle, moving to a less expensive area, or teaming up with another family to trade free child care, can have a much more significant impact on your monthly spending.

3. Liquidate Some Assets

Get your hands on some quick cash by selling off some of your possessions. For some people, this means parting with expensive possessions like a home, car, or furniture in favor of more affordable options. 

Alternatively, you can decide to liquidate some of your stock holdings in order to transfer the funds to a checking account. Similarly, if you’re under the age of 59 and 1/2, you may incur penalties and taxes if you take money from your 401(k), IRA, or any other retirement plan.

Consult a financial advisor or planner before withdrawing money from investments, retirement accounts, or a life insurance plan to help you figure out how to finance your career shift without jeopardizing your financial security.

4. Build your emergency fund and savings

If you haven’t already done so, you should start saving for a rainy day as soon as you decide to make a career change.

If you’ve saved up a significant sum, you might be able to take a few months off work without worrying about making ends meet. Direct deposit or automated savings applications make it simple to put away a portion of each paycheck and build up a sizable emergency fund.

5. Find funding

Find out grants or startup money that helps small enterprises if going into self-employment or expanding a side hustle is part of your exit strategy.

To qualify for a private small business grant, your company will need to have a track record of performance and revenue. However, the government offers startup grants to encourage business development in neglected areas. Watch out for chances like this.

6. Set up health insurance

You should make plans for health insurance through your spouse’s plan or the health care marketplace if you and your family rely on health insurance through your employer.

While COBRA continuation coverage may be available to you for a set length of time after quitting your employment, you should also research your other options in the market.

COBRA requires you to pay the premiums your employer has been covering. Unless you qualify for tax credits to offset the cost, your company’s plan may be significantly more expensive than alternative options.

7. Early Retire

If you don’t mind putting in some time in a high-stress job, you can save up enough money to retire early and start again in a different line of work once you’ve achieved financial independence, or come close to it.

8. Spend your free time.

Use your vacation time wisely by reading, attending workshops, and meeting new people in your field of interest rather than taking a vacation.

The money you would have spent on training for a new profession can instead be put toward enjoying your current employment as you learn the ropes for your next career move.

9. Explore Flexible Income Sources

Instead of trying to switch careers while still employed full-time, look for work that allows you more flexibility, such as freelance or contract work, or a position that allows you to work fewer hours. You can also use a gig app to find simple, flexible, and independent methods to earn money online.

Bottom Line

Even for the most self-assured and well-prepared professional, switching careers can be an intimidating prospect. There is no guarantee that you will find work or be able to immediately replace your income, and there is no assurance that your dream job will actually feel like a dream once you’ve started working there.

However, millions of Americans make job and career switches each year, launching new ventures and going in exciting new directions with great success.

You may leave your current work and pursue your dream job without becoming bankrupt if you prepare well in advance, make the switch intelligently, and replace your existing income with side gigs and savings while temporarily lowering your costs.

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