How to Budget for a Career Change
How much money do you need to save for a career change? Here’s how you can budget your way through it.
5 min read
Changing careers can be a thrilling challenge — stepping out of your comfort zone into something new. Ahead of your career move there’s plenty to plan for, including the costs to finance your job swap. And while the current climate may seem slightly scary, you’re not alone in wanting a career shift. According to a January 2018 report from the Bureau of Labor Statistics, the average person changes jobs approximately 12 to 13 times during their career.
Besides choosing which career you’d like to move into, it’s also important to consider how your finances might be impacted. With our financial tips, you can understand just how changing jobs will affect your funds, and manage them accordingly. Here’s how:
Evaluate your situation
We all want to have a job that we enjoy and that offers fulfillment. But whether it’s the stress, the salary, a poor work-life balance, or simply fading enthusiasm, frustration can lead you to question your role and look elsewhere. Here are some practical tips to help you weigh up your decision ahead of making your career change.
Keep a log of current working life: Note down the daily aspects of your job that you like and dislike. Recognize the recurring patterns and review previous successes—look back on prior roles, volunteer work, or projects where you felt rewarded.
Assess your interests, values, and talents: By defining your skills, core values, and areas of interest, a beloved hobby could become a professional reality. Obsessed with sustainability? Look into green energy companies. Have a passion for fashion? Consider buying and retail. Great with animals? Dog walking could be for you.
Evaluate the alternatives: Decide if you want a similar role at a different firm, or a fresh start in a new trade that requires retraining (and funding!). Ask yourself whether you bounce off others in a team, or want to take that solo step into self-employment.
Research, research, research
Now you’ve outlined why you want an occupation overhaul, it’s time to define your next steps. From reaching out to prospective employers, freelancing for a start-up, or finding the funds to retrain, a little investigation goes a long way. Use our 4-step guide to conduct your own research before changing careers.
1. Explore expected salaries
Some people are financially motivated, while others are driven by the love of the job. A simple online search will show you approximate salaries for the roles and industries you’re interested in. You’ll quickly get an idea of what the role pays.
2. Courses, qualifications and certifications
There’s a whole range of qualifications out there, from free online courses to college degrees. Identify what, if any, further training your role will require. If you need to keep costs down, consider what can be self-taught or ask family and friends who already have the skills you want to gain. If your new career path requires further education, it’s critical to consider the length of your studies and the impact they’ll have on your finances.
3. Gain experience to get your foot in the door
Working for free is difficult when you want to save, but is often essential to gain experience. Set up job shadowing, ask contacts in your target field for work experience, or do some volunteering. Alternatively, working as an apprentice is a great way to learn on the job while earning a small salary if they are offered in your field.
4. Use your contacts
Reach out to everyone you know, join employment websites, and sign-up for networking groups, to broaden your circle. Create a LinkedIn account to make further connections and widen your online reach.
Bank better with N26
How to create your career change budget
From all of your research, you’ll now have a good idea of the expenses involved in changing careers. If you’ve decided to take a course or quit your job to focus on finding a new one, don’t be overwhelmed when the costs add up or your savings start to diminish. Here are our financial tips and tools to help you budget for the job switch.
Save and streamline: Evaluate your current spending habits, including your essentials like rent, insurance and utilities, as well as what you typically spend on groceries and entertainment. On our blog, you can find tips for saving money on your electricity bill, your water bill, as well as grocery hacks and how to identify if you’re overspending.
Part-time and side jobs: When you’re looking to bring in a little extra income, no job is too small. Consider looking into the gig economy to supplement your income. You could also bring in extra cash by selling old clothes and appliances collecting dust around your home.
Run the numbers: Once you identify where you can cut back on your spending and where you can bring in a little extra cash, you’ll know just how long you can financially support your new job search.
Your money at N26
We know it can feel daunting to leave the comfort of your current job in search of something new, but sometimes change is needed to help you grow. Helping you live and bank your way is at the heart of everything that we do. Here are a few ways your N26 account can help you manage this next step in your career:
Stop wasting money on hidden bank fees. With N26, you can wave goodbye to monthly service fees, overdraft fees, maintenance fees and more.
Budget for your career change with Spaces. Put money aside for your next step with just a few taps. With Spaces, you can create a savings goal, transfer money in or out of your Spaces instantly, and save money at a pace that makes sense to you.
Ditch your budgeting spreadsheets with automated spending statistics. We know that budgeting can be difficult and time consuming. Don’t stress — the N26 app will do the work for you. We automatically categorize your spending each time you swipe your N26 debit card, so you can see just how much you’re spending each month on groceries, dining out, utilities, and more.
Set spending limits to prevent overspending. Once you determine just how much you can afford to spend each week during your job hunt, you can prevent yourself from blowing your budget by setting spending and withdrawal limits right in the N26 app.
Ready to get started? Open an N26 account in just 5 minutes from your phone and bank your way to a brighter future.
The N26 account is offered by Axos Bank®, Member FDIC. N26 Inc. is a service provider of Axos Bank. All deposit accounts of the same ownership and/or vesting held at Axos Bank are combined and insured under the same FDIC Certificate 35546. All deposit accounts through Axos Bank brands are not separately insured by the FDIC from other deposit accounts held with the same ownership and/or vesting at Axos Bank. The N26 Visa® Debit Card is issued by Axos Bank pursuant to a license by Visa U.S.A. Inc. The N26 Visa Debit Card may be used everywhere Visa debit cards are accepted.
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