Did you know that the average person has 12 jobs in their lifetime? When you make the brave decision to pursue a career transition, your job isn’t the only thing that will change. Many will be relocating to a new state, bringing in thousands of more dollars each year, or even adapting to an entirely different lifestyle.
In such a dynamic time, your finances can be a major concern, especially should you experience a gap in employment. To make for a smooth transition and sidestep some of the financial challenges that career shifters typically face, consider the following bits of financial advice.
Consider cost of living
If you’ve received a job offer in a new city or state, it’s important that you truly understand your new salary, whether you’re receiving an increase in pay or taking a pay cut. Everything differs in value city by city, from the prices of homes in the area to the costs of groceries. This directly influences the average salaries in the area and how far your money ultimately goes in supporting your lifestyle.
Before you relocate for a job, research the cost of living in your new city and layout all your anticipated living expenses. Then, create a plan using a budget planner to give you a clear understanding of what your financial situation would look like living there. Remember that an increase in salary doesn’t always mean you’re making more money in a different location, so get to know the economy in a new area before taking the leap.
Those who are taking a pay cut, or are simply looking to give themselves a financial cushion during this shift should be prepared to reallocate finances. Consolidating or refinancing major loans can free up a lot of cash that can be redirected into savings. Look into consolidating your student loans or learn about the pros and cons of refinancing your mortgage. In some cases, doing so can cut hundreds of dollars off your monthly expenses.
Restructuring loans can also save you thousands in interest. It’s important to pay back high-interest rate loans first to prevent you from paying greater interest fees longer. Plus, when refinancing, you can often lock in a lower interest rate that won’t increase or fluctuate over the life of the loan. That way, circumstances are more predictable and you can better manage your finances.
Cut back and save
For more minor expenses, you’ll have to rely upon self-discipline to be more strict about what you spend money on and where you can cut back. Take a deep dive into your bank statement. If you’ve been tracking your spending, which expenses or services aren’t particularly imperative? Reevaluate subscriptions or opt for more affordable products or services to free up more cash.
Put any money that you’ve freed up directly into your savings account and set up auto-deposits so that conserving cash is effortless. When you run out of creative ways to save, consider taking up a part-time gig to generate additional income. Use budget planning software to see what your account balance will look like after all of your newly allocated savings accumulate.
Explore relocation benefits
Employee relocations can be easier thanks to packages and benefits offered by certain companies. While job relocation packages will vary by company, these can include reimbursement for relocation expenses, moving assistance, pay adjustments for cost of living, funded visits, temporary housing, and more.
Before signing any offers, know that these are contracts that can be negotiated. If the benefit isn’t listed, it still can’t hurt to ask about it. Many companies are flexible and open to considering perks that aren’t already laid out within their policy.
Stay on top of your budget
While some expenses are out of your control throughout a career change, you can take charge of your finances using the right resources and advocating for yourself with your new employer. Speak with a financial expert to make wise investments and take advantage of financial tools like CalendarBudget to effectively track your spending and forecast your financial health years into the future.