A lot of people stick it out in a career they don’t love, purely for financial reasons. But what if you had the chance to do something more meaningful? Isn’t it worth trying?
It all boils down to whether you can afford a career change or not.
Giving up the stability and security of regular paychecks can be quite scary, but there are a few ways to make the transition easier. For a start, set up an emergency fund, work on a backup plan for both finances and work, and try living on your estimated earnings for a few months.
After you do all this, it’s time to consider how you will actually finance the transition. Here’s what you can do:
- Boost Your Savings – Maybe you already have savings for retirement or emergencies, but you really shouldn’t touch these. Instead, set up a separate fund for your career change, and save aggressively by cutting corners wherever you can. To avoid dipping into your transition or emergency fund, make sure you have access to a personal line of credit for urgent expenses.
- Take a Basic Course – You may want to sign up for advanced study courses at some point, to take you further in your new career. You can opt for one now, or start with a basic course that will help you develop the required skills before deciding whether to invest in advanced study. With a personal loan for education, paying for your chosen course becomes quite affordable.
- Look for Tax Breaks – Studying during a mid-career transition doesn’t only help you get better jobs and earn more money. It can also give you a break on your tax bill. You can get tax deductions on the interest you’re paying for a student loan, as well as additional tax credits depending on how much you earn. Reducing your tax bill may not seem like much, but every bit adds up!
- Invest in Your Career – Putting a little money into career development now can help you earn more after your transition. From skill-based training programs to the right equipment, investing in your new career is basically an investment in your future. Consider taking a personal loan to help pay for this over time, instead of putting a dent in your existing finances right away.
- Add to Your Income – Many professionals opt for a side hustle, like freelancing or part-time jobs, to finance their expenses during a career change. Ask your current employer about working part-time, and look for jobs available online or in your local area. These don’t need to be related to your current or new career, just an extra source of income to help you pay the bills.
With the right financial planning and a little extra effort, you can make a mid-career transition go more smoothly. Take your time deciding how to manage your finances, before you take the plunge!
Author bio: Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.