How to Financially Prepare for a Career Change

When looking to change careers, there are a number of things you need to consider. While it’s important to not burn any bridges, it’s also important to move on from any job you don’t feel comfortable in. Additionally, you’re going to want to take care of your finances prior to making a big move such as a career change. You never know what may happen in the time between your last day at your old work and your first day at the new job. It’s important to prepare for the worst while hoping for the best.

Here are a couple of ways you can financially prepare for a career change.

Build your savings.

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When changing jobs, you will want to have enough money saved up. These savings will replace your income while you’re on the job hunt. It can also be useful in case things don’t go as planned in your new job. The point of this is to have a safety net or an emergency fund for when things go awry. Your savings should cover at least six months of your expenses. This way, if you’re going through a rough patch, you can rely on your savings to keep you afloat for that time.

Enroll in health insurance.

Your current job may have provided you with good health insurance, so while you’re making a career change, it’s important to not lose coverage. If you know you’re going to be jobless for some time, it’s best to seek an affordable health insurance policy during that time. You may also be eligible for COBRA health insurance coverage if you quit your job. Be sure to also look for other unemployment benefits that may apply to you during this process.

Track your expenses.

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To make an emergency fund, you will need to consider your expenses and income. To track your expenses, you will want to use a spreadsheet or an app that can generate a visual representation of your spending and savings for illustrative purposes. This will help you get a better idea of where you need to cut down expenses or increase your savings. If you’re looking to refinance your car loan to get a lower monthly payment and save more money, you can use an auto loan calculator to determine possible payment amounts considering your interest rate, purchase price, and loan term. You can take this newfound information to a lender or financial institution to see the qualifications, like your credit score, for a lower monthly payment.

Make a new budget.

Now, this is the moment to make a budget. Now that you can see where your money is going, it’s time to bring the bar a bit lower on your spending and make a budget for each area of your life. You’ll have to determine how much money is going into your mortgage or rent, car loan, groceries, entertainment, gas, subscriptions, and even holiday spending. Depending on your lifestyle, you will have various categories. There are many apps that can help with this and can also give you a visual representation of your financial situation.

Make a side income.

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Lastly, you may want to find ways to generate a side income with a side gig or hustle. This can be selling products, offering your skills as a freelancer, or working part-time with a company while you take care of your primary career. You can look into Cisco’s CCNA testing if you are interested in an IT side gig. On the other hand, you can make this your new career and become a network engineer. NexGenT offers online courses and study materials for network engineering that fully prepare you for the workforce and Cisco certification exams.

Life happens, so it’s best to prepare for it while we can.