It can be scary and exhilarating thinking about a career change. But can you really afford it? Making a career change can be a gamble. Will you be living off your savings for a while? Will the next job pay as much as your current one? Or will you be taking a pay cut to pursue something you love? Can you afford that sacrifice?
If you are slightly panicked right now wanting to crawl back into bed, don't worry here are a few ways to check if you can afford a move.
1)Will you actually be losing that much money?
This may seem like an obvious place to start, but I know when we are all bound up in fear our logic isn't the first thing that comes to mind. Generally, it's screaming to ourselves I CAN'T DO THIS. What if it isn't as much of a change in income as you realise? Just because you are changing careers doesn't automatically mean you will be paid less. Some steps to take first include.
• Google the average wage for the job you are looking into. Is it as low as you thought?
• Look at your skills and experience, will they mean you start higher up in the business?
• Do you have an advantage coming from a different field that you could leverage?
• Can you ask for a higher salary than the offered one?
• Have you just presumed you will be paid less without actually looking at the salary offered on the jobs you are going for? Check job availabilities, you may be surprised.
If you still have a drop in pay, never fear here are some ways you can still work out if you can afford the move.
2) Calculate your expenses
Ok, ok I know this isn't fun, but you can’t know how much you NEED to earn until you know how much you SPEND. I'm not just talking about your rent, this is every single expense in your life. I'm talking:
Internet/ phone bill / steaming services
Car Registration/ Gas
Apple / android subscriptions
That credit card bill
Also, consider you're living expenses.
Do you go out every week?
How much do you spend on food?
Are you a shopaholic?
Do you have an expensive hobby?
This isn't about giving anything up but working out how much you need on a bare minimum each payday.
Calculate your total, don't miss out a thing, not even that daily coffee. Once you have a total, break that down into a monthly, fortnightly, weekly amount, and that will be the base amount you need to get by. You may be surprised by how small it actually is. Once you know this amount that's truly all you need to make. The rest is play money.
3) Work out what can go
If you have calculated your expenses and realised that you love fine dining twice a week, but your dream job allows for two-minute noodles, it may be time to let a few things go.
Sure the weekly shopping trip is fabulous, but can you live without it if it means doing something you love? I love my steaming services but do I need 4 of them? No, I do not.
Look at every single expense, can you get rid of any of them? You would be amazed by how much you can save if you cut out even small costs. Making coffee at home instead of buying one it each day saves you $20. Each expense added up.
What can you let go of?
4) Reevaluate your priorities
Let's be real, all of these changes are going to seem too much unless you change your priorities. Sure you can keep spending all your cash and more, but you have to stay in that job you don't like. Is it worth it?
That's a question only you can answer. Think about it, long and hard. I know women who don't like their jobs, but like the lifestyle it affords them, so they see it as a means to an end. They will sacrifice 40 hours a week if it means they can buy another LV bag. Others would rather grow veggies patches and live very simply if it means they don't have to go back to full-time work ever.
You will sit somewhere on the spectrum. Neither one is right or wrong. But my dear, you can't have everything, so now is the time to choose.
Do you want the money? Or happiness? Or is there a way to get a bit of both? FYI not everyone working in their dream job is broke.
5) Save, save, save.
Yeah, I know this isn't glamorous, but it needs to be said. If you want to make a move but can't afford to right now or know that you will need to live off a crappy salary for a while, I hate to break it to you, but you will need back up.
Even if you don't leave your current role yet live as if you have the salary you are going to and save the rest. Save as much as you can so you have security while transitioning to your new role.
You know your expenses which means you can work out how much you need for two months, three months, a year. Save what you need to get by until you are making enough money to cover your expenses again.
6) How can you make extra cash in the interim?
This may seem like it's all too much. It can seem very overwhelming to give up an entire lifestyle you have built and enjoy. No one said you have to. There is more than one way to boil an egg.
• Working a side hustle. Either in your old field to make money or in the new area while you still work at your current job.
• Do work experience or volunteer in the field you want to go into whilst still working in your current role.
• Drop to part-time work in both fields, one fuels your passion, one fuels your wallet.
• Dig into those savings. If you have saved up for a move, make a conscious decision to work out how long you can live off your savings whilst working in this new area.
• This is a controversial one, but there is always the last option of getting a loan to get you through. Use caution with this one, loans need to be paid back. Hence, you want to have the security that your finances will change quickly, allowing you income to make repayments.
Lastly, don't be afraid to ask for help. This won't be an option for everyone. It comes down to having the privilege to have someone to help in your life, but if you do, don't feel guilting about asking for support. If your family or partner can help you, they can be a great anchor while getting your footing in a new career. Most people want to see their loved ones happy if they can help you realise your goal they won't blink an eye at assisting you in any way they can.
Remember, you may not be taking a pay cut. In fact, a career change can lead to more money. Ground yourself in knowing how much you need to get by and remembering that the rest is just a bonus. Maybe one that will buy you that LV bag.