Now that we are settling back into our normal lives, you may think it’s time to start looking for your next career. Whether that is a new profession altogether, finding a company that will support your personal life balance, or setting out as an entrepreneur, this blog has something for you.
Making a career change is certainly an exciting life event, but it doesn’t come free of stress. I want to share a few tips that may help you avoid unnecessary stress while you go through this life transition.
I also wanted to write this article because I recently made a career change when I launched my fee-only financial planning firm. These are some of the main things I found helpful in thinking through when I was about to make the leap.
I have a soft spot for career changers and new business owners, it’s a really fun group to work with and I am sure you will find something valuable before the end of this article.
While there are many components of life we should be focused on, preparing financially for a career change can make the whole experience much more enjoyable. You won’t be in a rush, you won’t be asking the “what-ifs”, and you’ll be 100% in on your new venture. Let’s get started.
Get a landscape of salaries in your new career or company:
Thankfully with the internet-driven world we live in, this should be pretty easy to do with free websites such as www.glassdoor.com, or simply leveraging your social network.
When you begin your search, making use of LinkedIn to see if you have any connections to, or at the type of company you hope to be working with after making your change can be a great start.
It is also a great idea to identify what your career trajectory might look like. Many times, you may have to take a temporary pay cut when changing professions, and understanding how long the pay cut may last is just as important as how much. We will come back to this towards the end.
Even if you can’t find anyone in your network who can help you, leveraging the power of search on LinkedIn to find employees who may be willing to help you out and provide some information can be invaluable.
It may take a few different tries to find someone willing to chat with you or hop on a quick Zoom call, but any information can be an incredibly useful asset to you.
Continuation of Healthcare:
Healthcare can be one of the most disruptive expenses in any person’s financial life regardless of age if coverage isn’t present, or adequate. It is incredibly important to know what your healthcare options are when making a career change.
Before we go too far on this topic, if you are married, be sure to check the eligibility for you to get coverage through your spouse’s employer plan, if allowed. You can still evaluate your other options, but it is a great place to start.
If your company has more than 20 employees, you are more than likely eligible for COBRA, which in some cases may be more beneficial to you instead of seeking coverage on the marketplace.
Even if COBRA is an option for you, you may want to seek out some information on healthcare through the government marketplace at www.healthcare.gov, since the premiums can be much higher than you are used to paying. I would strongly consider getting as much information as you can on your COBRA plan first though.
Just for some context, even as a decently healthy 28-year-old as I write this, I am paying just over $250/month for coverage that really is just in place for a catastrophic issue, carrying an $8,500 deductible. This definitely isn’t ideal, but based on my medical needs it will get the job done for now.
If the company you hope to work for has benefits, you still may want to have a plan for this just in case of a gap in employment. Knowing the variables of the cost will be an additional peace of mind for you going into the transition, before pulling the trigger on leaving your current employer.
This piece is going to depend entirely on your medical situation and what you feel comfortable with taking on as a health-related risk. I certainly don’t feel as indestructible as I did in my teenage years and have some ongoing costs, which is why I opted to get coverage.
Planning for the unplanned:
Just like with the medical decisions above, having a plan for the unplanned can help you feel less anxious in the transition to your new career. Having some cash on the sidelines to dip into in the case of an unexpected expense, or a longer gap in employment than you were hoping for, can eliminate the hurried feeling while on your search.
I was recently talking to a friend who started their new job 2 weeks after they were scheduled to start because HR totally dropped the ball on getting their manager up to speed. They were sent home on their first day, and waited around anxiously before finally getting onboarded. Ultimately, they decided to go work elsewhere, which delayed their full-time employment even further.
Before making the leap, it is a great idea to focus on building what we in the financial planning world call an Emergency Fund.
This is usually between 3-6 months of cash on hand for extended periods of income interruption, or large, unexpected expenses. Typically, dual-income households can sit closer to the 3-month end of the spectrum, with single-income earners having a larger 6-month buffer of expenses.
Having this built up before you initiate departure from your current role is a great foundation to have. You may even want to add a month onto that and take a small sabbatical before landing in your new career if that is something you can arrange after landing a role at the new company.
Best case scenario, you don’t need to tap into this at all and can get yourself set up for a strong financial foundation, which you can read about more here in our blog post from last week.
What else should I consider when making a career change?
Money isn’t everything, right? There are many other things you have probably already started to think about as you plan for your career change.
One reason I love working with career changers as a financial planner is that your search for a new job can truly be something that works well with all areas of your life. It’s why I started my own firm versus staying in an employee role.
Even if you don’t start your own business, going into your career search with your non-negotiables can help you navigate and evaluate the nearly unlimited work opportunities out there. Especially in the connected world we live in, finding the right fit can be a bit overwhelming when you are choosing from so many options.
Our next blog post will have some tips for how to navigate all the opportunities you will find during your search, the interview process, and even on how to negotiate when you get an offer from a company.
I broke my initial blog post rule by starting with “how” instead of why on this topic, but wanted to make sure you could start researching and executing on these items that could take some time.
Next time we will get more into the “why”, and get you one step closer to finding harmony in your career.
Until then, happy searching!