The question of money: Planning financially for a change in career.
If there’s one thing I know, it’s that everyone needs money.
Of course, you can always sell up and move to an island Castaway-style and barter the rest of your life away. I’m not saying it’s IMPOSSIBLE to live without money, just that it probably isn’t everyone’s reality.
‘Money’ is the first and most common reason I hear that stops people who are unhappy in their careers from making a change.
When they think about moving forward, ‘current salary’ is a popular benchmark that people set when they start job-hunting believing that they can’t possibly afford to earn less than their current salary.
With this view, before you’ve even started, your finances will put a big fat road black in between you and your dreams.
And I get it.
I need money, too. I’ve got kids, a family, a mortgage, and a big dog to keep in Pedigree Chum. I haven’t always been able to do the things I wanted to do when I wanted to do them.
Unfortunately, that’s just part of being a grown up. But what’s also part of being a grown up is making decisions and putting things in place to help you take your life in the direction you want it to go.
That’s the ‘making choices’ part of adulthood which we can often see as a curse but is actually the biggest blessing.
I’m not a Financial Planner and nor do I want to be (no offence to all the fun FP’s out there!) but if your financial situation is holding you back from living the life you want to do, there are some really simple things you can put into place which will help you budget for the future.
Follow these four simple steps to loosen the grip that money has on your present and make it easier to make a life change in the future.
1) Create a realistic overview of your current financial situation.
The most logical place to start is with what comes in, and what goes out.
Spreadsheets are a great tool for documenting this data. Write down all your incomings and all the outgoings and mark expenditures as either ‘essential’ or ‘luxury’.
Be really truthful here because you might think the Friday night wine and cheese platter is an essential (after all, how else will you wind down after a hard week at work?), but it’s not, it’s a luxury. You might need to go through your bank and credit card statements to make sure you don’t miss anything (those couple of coffees a week can add up more than you realise).
Once you’ve done this you’ll have a better idea of exactly where you stand financially rather than just guessing and assuming you don’t have any spare cash.
2) Make a budget.
Once you have a physical list of your outgoings you’ll be able to see quite clearly if there are any areas you can cut back. The most obvious areas that spring to mind are buying coffees, lunches, and takeaways every day when you can reduce this bill by preparing better when you do a grocery shop at the weekend.
With what’s left over between your incomings and essentials list, create a realistic budget for the luxuries. Now comes the hard part…make sure you stick to it!
3) Make a list of predicted costs for your new venture.
Next, make a list of any expected costs associated with your change in career or new venture.
You might not know all this information at this point but find out as much as you can and estimate the rest.
Include in this cost to study, any loss of current income, and any tools or equipment you might need.
This will show you where you’re likely to stand financially if you take the next step. You might discover that working in a casual part-time role will be enough to cover all your expenditures and give you the luxury of the extra time you need to focus on your next move.
4) Start saving.
Start transferring money regularly to a high-interest savings account and this will quickly become a habit. Whether this is $5, $10 or $500 from each wage, once this starts to build up you’ll see it turn into living your dream life right before your eyes.
I will repeat that there’s no doubt at all that money is important. Anyone who tells you to quit your job and run off into the sunset with no regard for your responsibilities is irresponsible in my book.
But that doesn’t mean that there aren’t ways to make the change happen. It might not be immediate, but you can start preparing financially for your future, and you can start today.