Money is better than poverty, if only for financial reasons. — Woody Allen
We’d probably all like to have more money. It gives us choices, and to some, the freedom to choose things – like whether it’s time for a change of career – equals happiness.
But if you’re feeling forced to stick with a job you don’t like because you need the money, what can you do? You might feel like you can’t afford a change of career, even if you really want one.
I thought that intelligently managing finances while pursuing your career change would put you in the best possible position to pull the trigger when the time to make the move came. And who better to give you advice on managing your finances than the personal finance experts out there? So I went and asked some of the more awesome ones to answer this question:
What’s your advice to someone looking to change careers at midlife who is worried about the financial impact of their move?
Here’s what they had to say:
J. Money, BudgetsAreSexy.com and RockstarFinance.com
“The people I find to be the most successful switching careers – at any age! – are those who immerse themselves into the field well before they actually pull the trigger. Those who have consumed the blogs, podcasts, and journals around the subject, those who moonlight on the side to gain valuable real-life experience (and valuable savings to store up for the big move too!), and especially those who have started online presences for themselves to establish their credibility in the field.
If you can point to a blog or social media channel you’ve created to show your passion and knowledge in an area, it’ll put you ahead of a lot of people for a job and fast.
You’ll have to make sure your finances can take the switch when it’s time (so bank as many months’ worth of finances as you can before then – at least 3-6) and then go for the gold. At the end of the day it’s all about heart and hustle.”
Paula Pant – Afford Anything
*Make sure you’re free from all high-interest debt (anything over 8-10 percent APR), such as credit card debt. (Don’t worry if you have a mortgage or low-interest student loan; those aren’t worth delaying your career change). *Save at least 6 to 9 months of your basic expenses. You can live on this money while you’re switching careers. *Downshift your lifestyle: cut back on restaurants, cancel your vacation, cut cable TV. While you’re switching careers, you’ll want as much of a financial cushion as possible. To manage the career change:
*Don’t assume that you need a graduate degree. Depending on your field, you may be able to “break in” through freelance work, internships and networking.
*Create a strong online presence through blogging about your new industry and staying active on social media, especially LinkedIn.
Andrew – Listen Money Matters
You need to take all things into consideration, most notably your happiness and what you expect it to be with any new job. The easiest to consider is pay since it’s easily measurable but that doesn’t mean that less pay means you will be less happy. I’m actually considering taking a large pay cut myself and one thing to consider is will having less money to work with make us less happy. A career change starts with one big decision than after you make that you need to go and do that job every day and live with that decision for possibly years.
I wouldn’t take a job for twice the pay that made me miserable because at the end of the day how can I make my wife, family and friends happy if I’m not happy myself.
There is a big difference between being rich and being wealthy. Being rich means having a lot of money and being wealthy means having a lot of time. I’d always rather be wealthy.
Joe Saul-Sehy, Stacking Benjamins
“I made a career shift at age 40, so this topic is near-and-dear to me. My first piece of advice is this: don’t stay in the wrong career just for money. Sure, you’ll have to build an emergency fund and cut expenses so that your money lasts longer, but don’t let this stop you.
If you know what you want to do in the future, build a comprehensive business plan for yourself before making the jump….even if you’re going to work for someone else.
This will ensure that you think of EVERYTHING before you take the leap. Also, find out what separation benefits your current company may offer. We’ve had readers voluntarily suggest separation and their employer offered a severance package. That’s not the norm….but what’s the harm in asking?”
Start budgeting your finances and reduce your monthly expenses as much as possible. Use a website like Mint for help. Oftentimes a career change involving less money can make sense (especially if you’re current job is rather stressful), but you also need to make sure you have enough cash to get by. Start building your emergency fund now as well, if you can. There’s a chance that the move won’t work out well – and you should be prepared for that, even if in a rather minor way.
Don’t forget about that tax consequences as well – you might be eligible for fewer tax breaks if your move involves a higher salary, on the other hand you might qualify for more of them if taking a position that pays less.
Deacon Hayes – Well Kept Wallet
They should put all of their financial information on one piece of paper to take a snap shot of what the income and their expenses are.
You CAN Afford A Change Of Career
Even the personal finance experts agree – you can change your career. It’s simply a matter of planning your finances, building an emergency fund, and paying down your debt. But the bigger takeaway is that you have control. Control over what you do to promote yourself and demonstrate your expertise, control over how you define your happiness, control over building your future, and control over your finances. You don’t have to let your job or money control you. You can make a plan to break free!