How to Minimize the Costs of Changing Your Career Path?￼￼
Life is too short to perform a job you hate. Of course, it’s not always possible to be picky, but if you’re unhappy with what you’re currently doing, take a step back and determine if there’s really nothing you can do about your situation.
The most common reason why people are afraid to change their job or entire career path is the disruption in the steady income stream. But what if you could minimize the financial impact of this transition?
While you can’t remedy every problem, especially if you switch from a high-end position to a junior, there are things you can do to save money and minimize expenses. For instance, you’ll need to determine your income. That figure—when used in conjunction with a thorough cost of living calculator—can help you determine your living costs based on where you live. From there, you will need to review your savings, as well as differentiate between your wants and needs. You can also work on lowering your regular expenses. Ultimately, the goal here is to think through the transition carefully and thoroughly. Join us as we go through some helpful tips below.
The first step is to take a realistic look at your current situation and make a plan. This process begins with understanding your current income, living situation, and job role. If you are employed, will you need to quit your job before starting the new one? How much notice will you need to give?
Sometimes it’s possible to start training for a new role while keeping your current position; maybe you could grab some Udemy coupons and do some online courses in the afternoon or enroll in evening classes. Alternatively, you could start networking now and look for opportunities that fit with the skills and experience you already have.
You’ll need to think about how much it costs you to live every month and what kind of lifestyle you want to maintain. Make a list of all your current expenses, both essential and non-essential, and try to find areas where you could cut back. One way to do this is by looking for cheaper alternatives for the things you spend the most on.
If you’re not sure where your money goes every month, track your spending for at least two weeks, so you can get a better idea. There are many budgeting apps and websites that can help with this, or you can simply write everything down in a notebook.
Once you have a good understanding of your monthly expenses, compare this to your current income and see if there’s anything you can adjust. If your current salary covers all your costs and leaves some extra, great! But if you’re struggling to make ends meet, it’s time to consider other options.
If you have savings, consider whether this could cover any initial costs associated with changing your career. For example, if you need to retrain, could your savings cover the cost of courses or qualifications?
It’s also important to have an emergency fund in case anything unexpected comes up. This could be anything from losing your job to an unexpected car repair bill. As a rule of thumb, experts recommend having enough saved to cover three to six months of living expenses.
If you don’t have any savings, don’t panic. You may still be able to make a career change, but it will require more planning and may take longer to achieve. You could start by setting up a budget and cutting back on non-essential expenses, so you can start saving each month.
When changing careers, it’s important to have a realistic idea of what your new salary will be. Use online tools or speak to people in similar roles to get an idea of salaries in your chosen field. Keep in mind that your income may be different in the beginning as you build up your experience.
It’s also worth considering how long it will take to achieve the salary you want. If you know it may take longer to achieve, you might need to consider other ways to supplement your income in the meantime, such as taking on freelance work or investing in property.
When making any kind of change, it’s important to differentiate between your needs and wants. This is especially true when it comes to finances. Your needs are the things you can’t live without, such as food, shelter, and transportation. Your wants are the things that make life more enjoyable, such as vacations, nights out, and new clothes.
Of course, it’s important to enjoy your life and treat yourself occasionally. But when changing careers, it’s necessary to be more mindful of your spending. This may mean cutting back on your wants so you can save more, or it could mean finding cheaper alternatives. For example, instead of going out to eat, you could cook at home. Or instead of buying new clothes, you could shop second-hand.
There are many ways to lower your regular expenses, especially if you’re willing to make some lifestyle changes. Here are a few ideas:
- Get rid of your car: This may not be possible for everyone, but if you live in a city and rely on public transportation, getting rid of your car could save you a lot of money. Think about the cost of insurance, gas, and repairs. Could you get by without a car?
- Cut back on nights out and vacations: Nights out and vacations can be expensive, so if you’re trying to save money, it’s worth considering cutting back. Instead of going out for drinks or dinner, invite friends over for a potluck or have a movie night at home. And instead of taking an overseas vacation, consider exploring your own city or country instead.
- Lower your grocery bill: groceries are one of the biggest expenses for many people, so there’s a lot of potential to save here. One way to do this is by meal planning and cooking at home more often. You could also try shopping at cheaper stores or online.
- Reduce your energy consumption: Another way to lower your monthly expenses is by reducing your energy consumption. There are many ways to do this, such as turning off lights when you leave a room, unplugging electronics when they’re not in use, and insulating your home.
- Review current bills and subscriptions: Finally, take a look at your current bills and subscriptions. Are there any areas where you could save? For example, could you switch to a cheaper phone plan? Or cancel a subscription you no longer use?
Changing your career can be a big decision, but it doesn’t have to be a scary one. If you’re unhappy with your current situation, take the time to review your options and make a plan.
Think about how you can transition without disrupting your income, understand your living costs, and review your savings. Consider what you need and want, and look for ways to lower your regular expenses. With some careful planning, you can minimize the financial impact of changing your career. It will be worth it – good luck!