How to manage your finances when changing careers
Have you considered changing careers but are holding yourself back due to money worries? You’re not alone. According to AMP’s 2019 Financial Wellness Report, they found that 2.44 million Australians experienced financial stress and this has made a significant impact on the economy, with businesses losing an estimated total of $3.1 billion.
Looking at these figures can be worrying, especially if you’ve become comfortable in your current role and don’t have the desire to change careers because you may have to start from square one.
While these fears of change are valid, it’s important to think about your future and set some long-term goals. Besides, we spend most of our time at work, so being happy with what you’re doing matters more than you think. If you’re prepared to make some small sacrifices along the way, managing your finances effectively when changing careers could potentially give you positive outcomes if you have the motivation to invest in your future.
If you’re unsure what steps you should take when managing your finances, here are some worthwhile tips by Inc and Canstar that will help you stay on track with your money while you transition into another career path.
1. Research to see if you need to undertake further study.
While you may be reluctant in hitting the books because you’re either time-poor or doing your best to raise a family, you’ll find that transferable skills gained from your current job may not be enough. However, there are still other options to consider such as online learning, which allows you to study outside of your work schedule to help you balance your other personal commitments.
Upskilled has courses in business, community services and information technology, giving you a variety of choices in a qualification that best meets your career goals. Most courses can be completed within 12 months, giving you the flexibility to study outside of your work schedule and earn a qualification that can help boost your employment prospects.
2. Start setting your salary expectations early.
Going through a career transition can mean taking a pay cut and starting your way back into an entry-level position. Perhaps you may need to gain some internship or volunteer experience to help you make connections in the industry that you want to work in. Implementing these changes can come at a cost and you may need to reduce the hours you spend at work to be able to gain the relevant experience that could help you get a job in the future.
This may mean looking at your outgoing expenses and cutting out any luxury spending or reducing your budget to what you’re used to and living frugally for a while. By making these sacrifices now rather than later will save you from the shock of having to keep your budget tight. Starting earlier also means that you can be prepared to make the career transition. Once you build experience and gain the relevant qualifications, the payoff will be greater. You just need to be willing to put in the work of managing your finances first to successfully change careers.
3. Begin your new career path on a part-time schedule.
Being indecisive is normal when it comes to your career but also knowing where your interests lie can benefit you in so many ways. By still managing full-time work on a part-time schedule can also give you breathing room to manage your finances. This could mean topping up your emergency fund or having a separate savings account that can provide an extra cushion of savings if you do decide to pursue a new career path and quit your full-time job.
Annie Sophia is an ex-journalist and producer for the ABC, and she decided to start her own business working as a coach and corporate stylist. She shares how important it was to build adequate savings before she launched her business.
She says, “It’s important to build a savings cushion so you can go without a regular income while getting your new business or career off the ground. When I switched careers I used some of my savings to support myself and would recommend having a nest egg set aside so you can pursue what you want to do without getting distracted or feeling pressured to take on an undesirable job.”
Sophia also adds that while reducing her spending costs helped her make a career transition, it was doing other jobs on the side that helped her save more money.
“Aside from reducing my spending, I looked for ways to supplement my income. I found there are always small consulting jobs I can do on weekends or after hours to top up my savings.”
Start your career change now
Changing careers isn’t an easy decision but with a bit of financial planning, it can be a smoother process if you have a Plan B when it comes to your money and the motivation to study a relevant qualification to help you make career moves. Upskilled has a range of courses you can choose from in some of Australia’s in-demand industries.
Most qualifications can be completed within 12 months and you’ll have the opportunity to enjoy the flexibility of online learning. Contact an education consultant today and discuss how an online course can help you with a career transition.
This article should not be taken as expert financial advice. Please consult a financial specialist for further advice on your circumstances.
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