Feeling like your career goals don’t match your current job? Don’t worry, it’s okay to switch careers, even if it seems like a big leap. With more jobs available than people to fill them, job satisfaction is becoming more crucial than ever. However, many people find themselves stuck in jobs they don’t enjoy.
Switching to your dream job for better pay, satisfaction, or work-life balance can be scary and seem financially risky. But with some preparation and smart financial decisions, you can make the transition smoothly and successfully. Here are nine financial tips to help you change careers:
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Keep Your Current Job: Don’t rush to quit your job as soon as you decide to change careers. Keep it for now to maintain a steady income. Treat your job hunt like a side project. Your current job can also be a valuable resource for your career transition. Use it to build your skills and seek feedback from your colleagues and manager. You can also take advantage of any training programs or learning opportunities at your current job.
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Budget and Reduce Expenses: One simple way to lessen the amount you need to earn is to spend less. By budgeting wisely and cutting down your monthly expenses, you can save money and reduce the amount of work needed to cover them. This could give you the flexibility to reduce hours at your current job or leave it altogether for part-time work that gives you more freedom to chase your next career.
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Sell Some Assets: To have extra cash on hand, consider selling some of your assets. This could mean selling big items like your home, car, or furniture and replacing them with cheaper alternatives. Or it could mean selling off stocks in an investment portfolio to move the money into a bank account you can access quickly and easily when you need it.
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Build Your Savings and Emergency Fund: Start building your savings account and emergency fund as soon as you decide to change careers. A substantial amount in savings could help you afford to reduce work hours or take a few months off entirely.
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Seek Funding: If your plan includes becoming self-employed or growing a side business, look for grants or startup funding that supports small businesses.
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Arrange for Health Insurance: If you or your family members rely on health insurance through your employer, arrange for health insurance through your spouse’s plan or the health care marketplace before leaving your job.
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Consider Early Retirement: If you’re okay with working in a high-performance career for a while, you could save enough to retire early and pursue a new career path when you’re financially independent or nearly so.
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Invest Your Time Off: Instead of planning vacations, use paid time off from your day job strategically to educate yourself, explore careers, and attend networking events.
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Find Flexible Ways to Make Money: If you can’t manage a career move while working your current job, find something more flexible that uses your skills, like remote work, freelancing, or a part-time position. Or turn to gig apps for ways to make money on your own time without requiring special skills.
Changing careers can be intimidating, even for the most confident and prepared worker. There are no guarantees you’ll land a job or replace your income quickly, and your "dream job" might not feel like a dream once you’re in it. But remember, millions of people change jobs and careers every year, starting new companies and moving in new directions successfully with no regrets. You can pursue your new job without falling into financial ruin if you plan ahead carefully and make the transition deliberately, replacing your current income over time with side gigs and savings, and reducing your expenses temporarily.
