4 ways to fund your career change transition
Money. Sometimes the scary prospect of funding your career change can stop you in your tracks. Will I earn less in my new career? If I take time off to figure out a new career path, will I be eating pot noodles for months?
Savvy planning can reduce your risk of long-term pot noodling. Scope out ways to fill the financial gap between leaving your ‘old’ job and launching your new source of regular income. Start here.
1. Run the numbers
In other words - ‘do a budget’ although that sounds much less exciting. Your goal here is to know how much money you’ll need each month to cover your basic needs.
Begin this enlightening and occasionally terrifying exercise by reviewing the last month of transactions in your bank account and on your credit card.
If you’re an Excel whiz, make a smart spreadsheet to categorise all your outgoings. If, like many ordinary mortals, you’re not spreadsheet savvy, use one of ASIC’s free budgeting tools or choose from these well-reviewed alternatives.
Try seeing the art and science of budgeting as a creative way to show your smarts at a time when you can feel less competent and in control of your life. Done well, budgeting can be surprisingly satisfying. It can also free you from financial anxiety long after you’ve secured your next reliable income.
Here’s a dead straightforward bit of inspiration on the value of budgeting and calculated risk-taking from career changer and photographer Milton Gan.
2. Review your savings
Will your accessible savings cover your costs if you want to do a course, take some time off between jobs, or work at a lower rate to get some experience?
If a career break is on your mind, measure the number of months your savings will sustain you while you take time out to prepare for your next move.
If you decide your funds fall short, estimate how long you’ll have to stay put to save enough to make a comfortable leap. Having a precise figure and time frame in mind can keep you focused on your imminent escape.
3. Separate needs and wants
A brutally honest budget will show you where you can cut non-essential spending. Look for ways to simplify your spending. Can you defer the gratification that goes with buying new ‘stuff ‘while you make a momentous and meaningful career change? Can you sell ‘old stuff’ you no longer need?
Switching to a less ‘stuff’ driven lifestyle can be a liberating change in itself. The relationship between money and happiness is debatable and ongoing. Beyond a threshold, more money does not necessarily mean more happiness.
Once you’ve covered the basics, take one small financial step towards career change. Set up a payday direct debit to a separate ‘career change’ savings account. The amount isn’t important; it’s your intention that counts. Committing your ‘small change’ to support your grand one can boost your career change morale as well as your finances.
4. Hedge your bets
Think about what you can do without ditching your day job. Consider starting a side project if you have a highly marketable skill and the energy to work long hours. Sell something you love to make at your local markets. Freelance one evening a week at whatever you do during the day.
Alternatively, negotiate to go part-time in your current role while you try out a new area or start a business. That way, you have steady money in the bank while testing the waters on your next move.
Finally – a word on managing your inner money monsters
Like all life-changing shifts, career change is likely to unleash your inner demons. Some of the loudest voices amongst this heady horde of doomsayers belong to the money monsters. They’re the ones shouting about impending financial wrack and ruin. They’ll be keen to convince you that you’ll never earn a decent crust again if you leave your current gig. Quieten them up with a combination of the carefully calculated financial risk-taking I’ve outlined here and this selection of demon calming strategies I prepared earlier.
By Jo Green, Career Change Coach
I know what it feels like to be lost in your career. I also know that when you find what you love, heart and soul, your life changes. I work every day with people who are reshaping their current careers, starting new enterprises or searching for a new direction. Basically I help people who don’t like their job to figure out what to do instead!
As a Careershifters and Firework Advanced Certified Coach and experienced career changer myself, I can help you figure out what fulfilling work looks like for you.
Drop me a note to organise a free 20 minute consultation to chat about your career change and how coaching could help.
