There are many reasons people decide to change careers. Maybe you chose your career before you found your passion, or the industry of your dreams is becoming obsolete. Maybe you’ve already achieved your goals and want a new challenge. Whatever your motivation, changing careers can feel risky, especially if you have a mortgage to pay or a family to support. Yet, whether you’re just starting out or at the top of your game, there are financial strategies that can make your career aspirations a reality.
Make a plan
Before undertaking a career change, research how much it will cost you and what you can expect to earn in your new field. One helpful resource is the U.S. Bureau of Labor Statistics’ Occupational Outlook Handbook, which offers insights into the median pay, education-level and job-growth prospects for specific careers.
Beth Miller, talent management advisor and executive coach at Executive Velocity in Atlanta, advises her clients to consult a financial advisor to assess their current finances, estimate the cost of retraining, and make a budget to reach their career goals.
According to a June 2012 CNNMoney article, 46 percent of Gen Yers plan to start their own businesses in the next five years. If you count yourself among this group, Miller says it’s especially important that you prepare for a period when you may not make an income. “It can take much longer than you think to become established in a new business,” she says.
All change involves stepping outside your comfort zone. “There’s a period of sacrifice that comes with changing careers,” says Brian Braudis, executive coach and consultant with The Braudis Group in Oceanville, N.J. This may include giving up leisure time in order to attend school or cutting costs to prepare for a lower income after changing jobs.
If you’re looking for ways to significantly pare down your expenses, Braudis says some options include:
- Downsizing to a smaller home
- Relocating to a less expensive neighborhood
- If possible, renting out a portion of your living space
- Finding less expensive transportation options
Consider sources of income
If you’ve built a record of success in your previous work, find ways to use your expertise and reputation to supplement your reduced income. Offering private consulting services, serving on boards or teaching can provide you with part-time work while you break into a new profession.
When you know how much money you need and how much money you can bring in, it’s time to consider other sources of funding that can cover the gaps. The good news is that you’re never too old to take out federal student loans, if education costs are a factor. You may also want to meet with your personal banker to decide whether it’s wise to consider a private student loan given your goals and circumstances.
Changing careers takes patience and perseverance, but it can be done at any age. When Braudis’ clients shrink back from the challenge, he helps them see the bigger picture. “It’s a matter of creating what you want instead of taking what you get,” he says.