How to Finance your Career Change

Leah Lambart, Director of Relaunch Me Career Consulting and a Career Money Life certified supplier, shares some important points to consider when planning a career change. 

Before transitioning from one career to another it is worthwhile reviewing your financial situation and putting some plans in place

Have you had a rewarding career for twenty-plus years, but are now feeling unfulfilled? Perhaps you are looking for something more creative? Maybe you wish to start your own business, or want to contribute to the greater good of society and make a difference? Maybe the catalyst for change has come through a life-changing event such as an illness or a death of a loved one. Or you may just seek a better work/life balance.

If any of these sounds like where you’re at right now, you’re not alone. Many people share the desire to throw in the job in order to study a new course or start their own business. But how is this possible when you have a mortgage to pay off, children to put through private school education and a certain lifestyle to maintain?

The first thing to accept is that most career changes will require a step back financially, at least in the short-term. Many career changes will potentially require a reduction in income in the long-term as well.

So, what should you do? Here are seven tips for you to begin working towards your new career goals.

1)   Research your dream career.

It pays to thoroughly research your dream career. A careers counsellor will help you assess whether your dream career will be a good fit with your personality, values and transferable skills. They will also give you current information regarding the average salary range as well as current and future job prospects.

It is also advisable to organise ‘informational interviews’ with people already working in this field to confirm the above. Speaking with someone embedded in this field will also determine how likely you’ll secure a job after re-training.

Research the labour market using SEEK and other specialised job boards or recruitment agency websites to see how many jobs are advertised in this field and what the salary range is for entry-level and senior roles. This will help you budget for now and in the future.

2)   Create a Budget.

Review your financial situation starting with your day-to-day expenses as well as your long-term financial goals.

If you are not already using a budget, start tracking your income, expenses and savings using something like the MoneySmart budgeting calculator.

Most of us can reduce costs in some areas. Think about cutting back on expensive work clothes, city lunches, gym memberships, and travel expenses.

3)   Consider downsizing.

Changing careers can come at a price but for many people, it is worth modifying their lifestyle to find a career they are truly passionate about.

Consider whether you can downsize for a few years whilst you set yourself up. Can you move further out of the CBD or to a country town? Rent a smaller house or survive with one car?

4)   Transition slowly.

You may be desperate to make the career change now but it is usually wise to make it slowly. It is very difficult to transition from full-time work to being a full-time student.

Look at part-time or online courses, such as Open Colleges that will allow you to keep working whilst studying.

Maybe you can later reduce your current work hours that will allow you to complete the course faster or dedicate 1-2 days to networking or volunteering in your new industry.

5)   Build a buffer.

It is advisable to save as much as you can before attempting to transition to a new career.

For those starting their own business, aim to have equivalent to 6 months take-home pay to allow you time to get established.

If you are looking to transition to a new career, allow 12 months take-home pay to give you enough time to secure the job that you really want rather than settling for anything.

6)   Alternative income.

Consider ways you may be able to earn additional income to supplement your drop in salary.

Do you have skills that would allow you to pick up some freelance work on freelancing websites such as Freelancer or Upwork.

Could you start an online business or eBay store from home to generate some extra cash each month?

7)   Get FEE HELP.

FEE HELP is a loan scheme that assists eligible fee-paying students pay all or part of their tuition fees. It cannot be used for additional study costs such as accommodation or textbooks.

You are eligible for FEE HELP if you:

  • are studying at an approved FEE HELP provider (approved provider*);
  • meet the citizenship and residency requirements:
  • are enrolled in an eligible unit of study by the census date for that unit;
  • have not exceeded the FEE HELP limit**.

* Approved providers are categorised as universities, approved private higher education providers, Open Universities Australia (OUA) or an approved Vocational Education and Training (VET) provider.

** For 2017, the FEE HELP limit is $100,879 for most students.

View the original article here.

Career Money Life offers a wide range of services that can assist you with your career change. Contact us to learn more.

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