How to prepare your finances for a career change
With the recent downturn of the economy, more and more Americans have had to take lower paying jobs. Some individuals have even found themselves working two part-time jobs just in order to make ends meet. However, some individuals switch to lower paying jobs in order to get away from stress and long work hours. Whatever your reason for switching, you are probably going to notice a big difference in your end of the year pay. This might mean it is time for some cutbacks or financial adjustments.
Take Advantage Of Savings Where You Can
Your previous career might have carried expenses where your new career does not. For instance, in your previous line of work you might have had expensive dry cleaning bills or longer commute times. If these expenses no longer apply in your new chosen field, think about how you can use this extra money in the most effective way. Maybe store it away for savings, or use it to make a final payment on one of your bills.
Also, be sure to check out the money-saving benefits that might be offered by your new employer. For instance, maybe your new employer offers discounts on cellphone plans or gym memberships. Whatever, you can take advantage, especially when it comes to savings you very well should.
Do Not Touch Your Retirement Fund
According to Better Credit Blog, when things get tough and tight, most individuals start cashing out of their retirement fund. However, this is a major mistake because it is only going to hurt you in the long run. Instead, of looking to draw money out of your retirement fund, you need to look for other places where you can cut money, like disconnecting your TV or LAN line.
Look For Opportunities To Supplement Your Income
Of course, when it comes to switching to a lower paying job the first thing that most individuals think about is cutting expenses. This is an excellent strategy, but instead of cutting expenses you can also look for other ways to supplement your income. For instance, do you have a pool house that you are not using, or an extra room upstairs that is not getting any use? Well, you can consider renting those rooms out.
Maybe you can use your expert knowledge in your chosen field to consult and provide information to startup companies. Whatever the situation is you should not let these new extra sources of income distract you from your new career change, as this will be one of the most important things in your life.
Separating Your Needs And Wants
When switching to a lower paying job, one of the first things you want to do is sit down and look at exactly where you are spending your money. Do you have the large amount of money that is going daycare costs and nanny care? Do you have a huge portion of your income that is going towards expensive cellphone plans? You really need to sit down and consider if these are things that are wants or needs. Do you really need all that extra cellphone coverage? Are you really utilizing all those extra TV channels? These are all things that need to be considered.