If you’ve been at your current job for a decade—or far longer—you may think you’re ready to try something new. And you’re not alone: the Bureau of Labor Statistics estimates that Americans change jobs an average of 11 times during their lifetime1. Making a switch can be thrilling, but it can also raise as many questions as hopes.
“It’s a matter of taking a look at your current job situation and seeing what’s best for you, not just financially, but also in terms of balancing your work environment and quality of life,” says James Heilman, first vice president at SunTrust Investment Services in South Miami, Fla.
Consider the following four points when contemplating the big change:
Before settling on a new career, find out what kind of background you will need to make it happen. This may be as simple as doing some online research and having exploratory conversations with people who work in the industry. Or you may need to go back for a few classes or even a degree. That can mean spending a lot of time and money before you start seeing any payoff from your new profession. Ask yourself, “How will I support myself during that process without taking on an unmanageable amount of debt?”
A new career can mean a change in income, and often a substantial pay cut, particularly if you are wandering far afield. “You need to be sure your new income is enough to support your budget,” says Heilman.
Develop new spending and savings plans based on your anticipated income so you can identify (and resolve) any shortfalls before you take the plunge. You may also want to consider boosting your emergency fund before switching careers. Heilman suggests saving at least three months’ worth of expenses to help you through the transition.
Do some research to see what benefits you can expect at your new workplace. If employers in your new career typically offer fewer benefits, you may need to budget more money for health insurance and retirement savings. Take this into account when budgeting, and determine how you’ll have to change your lifestyle to accommodate these new expenses.
4. Personal life
Any career change will lead to changes in the rest of your life, so be prepared to take time to make adjustments. Heilman suggests making a five-year plan to give yourself some direction. “Sometimes you have to take a step back to put yourself in the right direction. That’s something you should be prepared for and acknowledge,” he says. “The grass isn’t always greener, so make sure you know what you’re getting into before you make the switch,” cautions Heilman.