One of the most common questions I receive from my clients about their career reinvention is about how they can afford switching to a new job or profession, and how they can afford all of the interim costs during this process.
Here are three tips that can help you prepare for this career transformation and help you through the transition period:
• Build a cash cushion: Even if you reduce your expenses, it is probably best to have more than the normally recommended emergency fund of three to six months of living expenses as a cash cushion. This is especially true if you expect to be earning less. If you think your career reinvention might take longer, as they often do, consider putting aside additional funds. Doing this will lower your stress levels, and ensure that your transition efforts won’t get derailed.
• Take on extra work: Determine if there is an opportunity for you now to work some overtime hours or take on extra work for extra pay at your present employment. You can use this extra cash as your career reinvention nest egg. You also might want to consider taking on a job during the weekends or a do a one-day-a-week evening gig to bring in some extra cash.
• Give yourself some credit: A great way to do this is to pay down or pay off some of your existing debt. You will be in a better place financially and find some peace of mind if your monthly expenses are lower and your available credit is higher. For the same reasons, it is probably best not to make any significant purchases prior to your transition. Also, try to secure a line of credit while you are employed and have steady income. This will help you feel comfortable about having additional emergency funds available.