We need to talk about money! One of the most common things I hear from anyone looking to change jobs is – “I can’t afford to earn less than I do now“. That may feel very true, yet a job that’s not right for you might cost you a lot more than you think.
Money is key for job transitions, because unless we know our financials plus how much we really do need to live comfortably, we’ll always have a reason not to change. Most people don’t think about it this way, but I personally choose to believe that money is simply a tool to open up options, not a sign of success in it’s own right.
Lots of people don’t like talking about money, but it’s a big part of transitioning your professional life, so you have to be willing to spend some time building a relationship with your money. How might you do that?
- Before you dive into any budgeting spreadsheets, take a moment to think about what your current relationship with money is. You might not have any idea about what your financial situation actually looks like? You might have a budget in place, but you keep dipping into your savings every month? Wherever you are at right now is fine, you just have to check in with yourself before you get started with the next steps!
- One of the first things to do if you’re serious about a career change, is to set up a basic monthly budget. You might cringe at this exercise, but once you sit down and do it, it’s actually easier than you think! There are many different templates out there, so let your good friend Google help you out there. If you’re keen to use the same template I use, feel free to email me directly and I”m happy to share it!
- Once you find a budget template that works for you, the key is to work out the basic “buckets” where your money goes. I’ll cover this in more detail in another blog post and video, but top line you need to know in detail what your current lifestyle actually costs. The standard ‘buckets’ of costs to work out are:
A) The fixed costs – these are things that cost the same amount every month and that you have to pay: rent/mortgage, internet bill, phone bill, insurance, gym membership etc.
B) The variable, but important costs – things you need, but the cost is different every month, or some months there might be no cost at all: groceries, transport/fuel, electricity bill, dentist/doctor.
C) The ‘nice to have’s – the things we do that are not essential, but important for our well being/social life: eating out, non essential shopping, holidays, gifts, theatre tickets.
D) Savings – You might not be saving at all right now, but this is a key part of healthy career transitions, so I’ll unpack this one even more in future posts and videos as well. Just make a note if/how often/how much you put money aside in one/several dedicated savings accounts.
- The final step is to look at what you could live without if you had to AND it enabled you to study/work part time/change career direction. It may seem like a sacrifice to move to a smaller place/not take the usual big family holiday/upgrade your car, but in the grand scheme of things it’s not a sacrifice – it’s a strategic alignment to your future.
Not everyone loves budgeting, but once you know what finances you’re working with AND understand what can be unlocked if you manage them well – then you really start to open up your career options.
You don’t need to be on a big income to improve your finances even before you get that new dream job!