How to Prepare Financially for a Career Turn

Today we’re taking a break.

We’ve been waist-deep in our series 7 Steps You’ve Found Your Calling, but today I want to talk about one key way to pull off a successful career change.

So many of us have hopes for doing amazing things, things that can seem ‘out there’ and so strange they could never work (we think).

But this blog is all about listening to our calling and then taking steps in response.

And if your calling involves traveling around to high schools performing stand-up comedy that gets students to talk about difficult topics with their parents, so be it.

It doesn’t matter if your calling isn’t a ‘normal’ job. It doesn’t matter if you can’t see, right now, how on earth it would work.

The point is there’s amazing stuff out there for you, and I don’t want you to miss it. I want you to wade into it completely.

But here’s the thing — sometimes (often), the fact that we need to earn a living can become a barrier. It can become a reason, or THE reason, we decide that the crazy, wonderful, could-something-this-amazing-possibly-happen calling we hear isn’t something we can act on.

Money.

That’s it. So often that’s what it comes down to. So often that’s what keeps us back.

But it doesn’t have to be that way.

This post (longer than usual) is all about how to put finances on your side, rather than against you. It’s about getting financially ready for your career turn.

Finances is a really big part of the career change equation.

Not only do we have material needs, but also financial habits and decisions we made years ago that can still be having an effect on our life today.

For example, based on past work experience and income, we can become used to living at a certain level. Whether our income level is high, low or medium, we tend to get used to it and adjust our lifestyle to match.

In preparing for your career turn, I believe a different approach is in order.

Living below your income level — spending less then you make — is a vital part of a successful career turn. When we live at our income level, spending 100% of what we earn, we run into two issues.

One, spending all we earn means we probably haven’t done the hard work of figuring out what really matters to us.

For example, you might not truly get much pleasure from a new car or a beach vacation, but you’ll never know that’s the case if you automatically buy those things each time you get a raise.

This is a gap in self-understanding, something we want to remove as we head in a new career direction.

The second issue with spending all we earn is it limits our options.

If my lifestyle requires 100% of my income to be sustained, than any career change that decreases my income is a much harder option. By living right at my income level, I am making it harder to change careers.

If I currently earn and spend $50,000 a year, how can I move toward a career turn opportunity that only pays $40,000? I can, but it will be much harder than if I had set my priorities in order earlier and was living at a fixed, lower level of annual expenses.

What I’m going to suggest might sound like a financial revolution, but hear me out.

To get ready for your career turn, write down what your annual expenses are. These are your needs.

Then, use any income above that level for things other than increasing your lifestyle. This would include paying off debt, saving money, and giving it away.

If you get a raise or financial windfall, it can go toward these areas. Not only is doing this really fun (I promise it is!), but it helps you maintain career agility.

When you’re not weighed down by lots of financial obligations, you will be nimble and find freedom to engage in work that is meaningful. By living below your means, giving and saving money, you’ll become able to choose work because you love doing it.

There is another financial step you’ll want to consider as you prepare for a career turn.

Besides setting an annual expense budget that covers the basics, it’s also wise to prepare for unexpected bumps in the road.

If you currently work a steady job, you probably enjoy the protective shelter of a regular paycheck and benefits. Your career turn may take you to a place where you get paid on a much different schedule, or no schedule at all, and it may offer you no benefits at first.

Financial experts advise everyone to build up an ‘emergency fund’ to cover unexpected costs. My advice is to build up a fund that could cover 6 months of your living expenses.

Here’s why doing this is in your interest: First, it will smooth your transition. If you press the launch button on your new career but run out of fuel (money) before getting to a sustainable place, where does that leave you? When you jump, you want to be able to reach the other side!

Second, having a financial cushion will help you worry less and focus more on making your move.

You want an undivided interest as you pursue this change, not one saddled with fear of going broke. That kind of fear will drive you to play it safe and retreat back to getting a ‘sensible’ job. It defeats the whole purpose of your career turn. Keep yourself free from this fear — it will sabotage your hopes if you let it.

Having the financial cushion of a hefty emergency fund is a wonderful weapon against fear. When it comes down to it, it’s the financial aspect that can wreck career turns more than anything else.

Take special care to prepare financially for your turn by living below your means on a budget and building a strong emergency fund.

If your career is a sailboat, this step is like throwing unnecessary weight overboard and stocking up on vital provisions. Your ship will become lighter, faster, and you’ll be to able to go farther in it.

How has money affected your thinking about career? What’s one step you would like to take to improve your overall financial health? Personally, I want to start budgeting my discretionary expenses — meals out, entertainment, that sort of thing. How about you — what do you want to create when it comes to your financial health?