People often assume that changing to a more meaningful career means taking a major pay cut. The reality is that this may not always be the case, at least not in the long term.
I have known people to change career or industry and earn MORE money. In other cases, career change often accompanies a rethink in life and priorities, meaning that some financial sacrifices are made for other things that are considered more important such as time, health and personal meaning.
When I started the process of changing my own career, seven years ago, it was a gradual process, so I kept my corporate salary coming in for as long as possible until we were ready, as a family, for me to quit. We also reassessed our life and realised that the Sydney rat race wasn’t serving our careers or our family life. Cutting costs by moving to the South Coast enabled us to make my career change dream a reality, but just as important it meant a better life for the whole family.
Now I’m not suggesting that everybody who wants to change career should relocate but I have seen far too many people dismiss the idea of career change for financial reasons, based on assumptions that might not be true. If you’re one of those people, then read my tips below. I have also created a FREE planner to help you get clear about the financial aspects of your career change. Click here to get access to my FREE career change planner.
Know what you want
If you don’t know what you want to do then how do you know that you can’t afford it? Many people assume that if they want more meaningful work then they’re going to have to take a massive pay cut but that might not always be the case. Meaningful work doesn’t always mean working for a charity or NGO and it doesn’t always mean you have to start at the bottom rung of the ladder again. First you need to work out WHAT YOU WANT and not just from your career but from your life. Start with Part One of my Working Mum Career Change Plan and at the very least do the final exercise where you create your vision for your life and work. This will help you get crystal clear on what you want. Who knows you may not have to take a pay cut at all. You may even get a pay rise.
Work out what you really need
Once you know what you want from life and work then it’s much easier to know what you really need. And this is where the really meaningful change can happen. Ask yourself do you have to have that $80,000 car or will a $30,000 (still not a little amount of money) do the job just as well? Is driving a fancy car really that important to you? Do you really need to buy that flash TV with surround sound when your life vision is that you and your family spend time playing games together or going camping at the weekends? Work out what you need moving forwards, not what you’ve always had in the past, or what you think you should have.
Simplify and declutter
If you can strip down your “stuff” to that which is most essential and valuable to you then this frees up both money and time for the things that are most important, like being happy in your job. One of my favourite sayings, but I’m not sure who said it, is “Between the calendar and checkbook, ones priorities are laid bare.” Very often there is a misalignment between the way we spend our time and our money and the things that we say are most important to us. Try decluttering your home, removing some of the things you don’t need or that you have doubled up on and donating them to charity and then commit to not buying more. Do the same with your calendar. Politely say no to invitations or requests that are stopping you from doing the things you value most. Whilst this might not seem like a financial action, it gives you the space to witness what is important to you.
Develop an exit strategy
If you’ve done the above work and you know that your career change is going to entail a pay cut or a temporary drop in income then you will need to prepare for it. I would never recommend that anybody changes career without having a well-thought out exit plan in place. I once got to the point where I was so miserable, back in London, that I quit my job without having another one to go to and no real plan in place other than “get a marketing job in the charity sector.” I also had a mortgage, my then partner was also out of work and we were approaching Christmas. Somehow we muddled through but I returned to professional services marketing four months later. I also realised, looking back, that this period marked the start of our relationship breakdown.
So you need to develop a plan. If you’re going to take time off work to study then you’ll need to have some savings behind you to get you through that time. How much? And how long is it going to take you save it? Or perhaps you will need to go part-time at work while you build up a side hustle into a business? That may mean making some reductions in expenditure. Or maybe there are other options like refinancing and releasing equity from your home (if you have one) or renting out a spare room. I have even known people to move back in with their parents to save money.
Work out what you want to do, how you are realistically going to afford it and put dates against all of it, so you know what you’re aiming for. You may need to spend two more years in your job if you’re going to save the money you need for your career change. Pin the date that you’ll be free on your desk so you can refer to it during the hard times and get working.
Cut your costs
If your career change entails a pay cut or temporary drop in income then you’re going to need to cut your costs somehow. I’m not going to tell you to cut the avo on toast but maybe you can eat it at home occasionally instead of eating out. The real savings though, come from cutting your fixed costs as much as possible. We’re talking rent or mortgage, insurances, utilities, phone, internet and those other regular payments for things that might not be absolutely essential like a gym membership (how much do you use it?) or Foxtel. Examine these costs and see where savings can be made. Doing this helps you realise how much you actually need to live on and that will enable you to assess job opportunities further down the line. You may think you can’t afford a pay cut but when it comes down to it how much do you actually need to live?
Build your support team
Finally build your support team. You need to surround yourself with the right people who will support you in your career change dreams. If you’re trying to save money but your friends insist on going to the latest fancy restaurant and ordering a $200 bottle of wine then you may need to consider meeting those friends for coffee instead and going for dinner with others who are more like minded. Of course, if you’re going to take a pay cut it is essential that you have your partner on board, particularly if they are going to shoulder the financial burden for a while. They will need to know that this is important to you and that you are committed and have a plan in place to make it work.
Please don’t let your finances and your lifestyle hold you back from being happy at work. One of the greatest regrets of the dying is not having the opportunity to do work that they loved. Please don’t let that regret be yours. After all, you can’t take your lifestyle with you.
To help you move forward, I’ve developed a FREE career change financial plan toolkit. This will take you through some steps to get clear about your current financial situation, what your career change and life goals are and how you might bridge the gap, if there is one, financially.
Please bear in mind, I am not a financial planner. The advice I provide here and in my toolkit is general in nature. If you need more personal advice about your own financial circumstances then I suggest you contact a financial planner or counsellor. However, my toolkit takes you from some of the steps that worked for me and that have worked for my clients.