How to Survive Financial Drought During a Career Change: Managing Risks and Becoming Better Positioned

 

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Ever thought of making a career change? 

If it's going to be your first time, this article will help you weather the storm. 

A career change could be one of the most difficult decisions in your adult life. It could turn out to be a life-changing decision if enough thought is put into it. The only problem is that going through the transition period is more challenging than most people prepare for. 

What is a Career Change?

A career change refers to an individual's decision to take on a new/distinct role in terms of their profession or occupation. 

Usually, a career reflects a person's means of livelihood. So a career change is a sensitive topic that indicates one's readiness to perform a new type of activity, towards earning a better living. 

The Three Phases of a Career Change 

Changing careers might be the result of a newfound passion or some drive to achieve a particular goal. Whatever the reason, it is never an easy undertaking. 

Your friends and family may try to talk you out of it, especially if your current career is paying nicely and appears promising. But if you're going to be stubborn enough to follow your dreams, then we're here to guide you! 

The career change process happens in three phases. Each of these phases requires careful planning and execution. 

Before The Career Change

This is, let's say, the exact moment you realise that you need a change of career. It is where the mental pivoting occurs; the beginning of your fascination and determination towards your new career pathway.

During The Career Change

Here is where you likely start to question whether you've made a wrong decision. You envisaged that the journey would be tough. However, you're now realising that you failed to ask how tough it would be. 

After the Career Change

Now, you've somehow made your dream career. Whether it's a job or an internship, you've successfully gotten someone to trust you in the role of your choice. 

How to Survive Financial Drought During a Career Change

Assess Your Financial Situation: 

Before making any career changes, you must carefully assess your financial situation. Think of what is possible and what is not. Also, consider what sources of income are available to you, your financial obligations, and the resources or tools at your disposal. 

Based on assessment, you may decide that it's a good time to begin your transition or that you need to wait a couple of months to get everything in place. The point is that it eliminates hurried decisions and wrong actions.  

Create a Budget: 

Creating a budget is one thing. The other is being prepared to follow it strictly. Remember, no budget padding - you're not some federal government!

Your budget will come in two parts. The first will outline essential expenses, such as rent, utilities, groceries, and toiletries. At the same time, a second part will reveal discretionary spending such as outdoor dining, entertainment, and the like. 

It is important that this budget matches all available funds and equally takes into account every income you're expecting. Like a painting on a canvas, this will help show how reasonable your plan is. 

Build an Emergency Fund: 

Having an emergency fund is crucial, especially when changing careers. Aim to save at least three to six months' worth of living expenses to cover unexpected costs or emergencies during the transition period.

A common mistake people make here is putting this money where it is difficult to access. If it's an emergency fund, it should be quick and easy to withdraw. You shouldn't have to wait all the way till Monday or go around town in search of your co-signatory. 

Upskill or Obtain Certifications: 

Invest in further education, training, or certifications related to your new career path. This can enhance your qualifications and make you more competitive in the job market. Ultimately, it increases your chances of securing a job sooner.

Seek Mentorship and Network Extensively: 

Brewing new connections by networking with professionals in your desired industry is a great start. Next, you'd want to find a reliable person to play the role of a mentor. Having both a mentor and lots of relevant new connections speeds up your career change process.

It ensures you make fewer mistakes. Moreover, these individuals provide potential job leads from time to time, reducing your search efforts and easing the transition.

Seek Compensation Packages: 

If changing careers involves leaving your current workplace, which is usually the case, you should explore severance pay or compensation packages. Your office will likely have this system in place. It is designed to provide financial support for staff leaving the fold.  

Accessing this benefit will help you stay afloat during the transition period. 

Downsize Your Lifestyle: 

We don't mean to say you should suffer. Just "cut your coat according to your size." Go through your list of expenses and pick out things that stand out as non-essential. They could be subscriptions, memberships, and luxury purchases. 

This way, you'd free up more money to cover essential expenses during the transition period.

A big part of downsizing your lifestyle is recycling. You want to retain reusable products, such as plastic containers, rather than buying them repeatedly. 

Rent Out Unused Space: 

Of course, you're familiar with Airbnb - and there is a list of alternatives just in case. These platforms allow you to rent out unused spaces in your home. It means that a free bedroom could become a source of income overnight, bringing in much-needed funds.  

On the plus side, you won't be all alone at home. Talk about sharing and earning!

Utilise Government Resources and Programs: 

Government-backed programs like training, unemployment benefits, and continuing education are usually available at every point in time.  You can utilise this in addition to free resources to build your skills or rapidly advance towards your new career.  

Monetize Skills and Talents: 

In that moment when you're in the midst of it, trying to change careers, remember that you can monetize your skills.  

Hobbies and natural-born talents are two things you can apply to earn an extra income. They don't have to be a hard skill before they are useful. For instance, if you're really good at speaking and quite convincing, you can apply to charge a group of students at a graduation event. 

Tip: Consider using gig platforms to find jobs requiring your talent/skills. Also, consider providing freelance or part-time services to have better control over your time and activities. 

Barter or Trade Services: 

There's the option of trade or barter. Indeed, this is old but still very useful. 

The idea here is to engage friends, family and even total strangers by giving out a product or service in exchange for one. A good example would be taking the time to teach someone a hard skill and in return, have them teach you one too. 

Cut Commuting Costs: 

Commuting costs sometimes make up a small but significant portion of our budgets. You can slash that - and save up more funds - by biking, walking, or using public transportation. 

Also, planning your route and activities is important. It will help you avoid double trips and unnecessary back-and-forths as much as possible. 

Discounts and Coupons? Yes, Sure: 

Both physical and digital services offer discounts or coupons to get more customers to patronize them. Since you're out to manage funds, it will help to scout for these and other promotional offers. The search will lead you to all the best prices.

You may also want to take advantage of preorders and make early bird purchases (of new products) to access discounted prices and other perks. 

Tip: Be sure to confirm the quality of the products you purchase as some fraudulent sellers may use discounts to sell damaged or low-quality goods. 

Conclusion 

We want to share two pieces of advice. One. Stay flexible. Two. Stay positive and patient. The journey through a change of career proves harder than a regular job search. Understand that it takes time, be ready to change campaigns or tactics, and finally, keep your head up and trust the process.