by Amy Collett
Changing careers is a big move that requires a lot of thought and careful planning; like millions of Americans, you may be living paycheck to paycheck, meaning that any change in your schedule or gap in employment can put you in a very difficult situation. Or, you may be juggling many things, trying to stay afloat while taking care of a family, going back to school, or attempting new ideas with an entrepreneurial spirit. Whatever path you’re on, it’s important to make sure you have a budget that works for your needs as you navigate a new career path.
Fortunately, there are many things you can do to ensure that you’re able to stay on budget and keep your finances in order even while you make big changes to your job. Thinking about the little things — such as how much gas it will take to get to a new workplace, wear and tear on your car, and whether you’ll need to buy a new wardrobe — will help you figure out the underlying costs of taking on new employment and whether it’s worth it.
Here are a few tips on how to think about your budget when changing careers.
Think About Your Wardrobe
Clothing is often an important part of a new job; it’s imperative to dress for the job you want, so you may feel driven to buy some new pieces to feel confident and prepared for your new career. Keep in mind that you can save money by buying classic pieces that mix together, such as black dress pants, white button-down shirts, and knee-length skirts. Look online for deals and coupons so you can get everything you need without spending a ton of money. Combine these with sales to save even more cash!
Make Tax Considerations
Sometimes, with the changing of a job comes changes to a person’s income tax, and this can lead to big trouble at the end of the fiscal year when you’re ready to file. If you’re thinking about starting your own business or becoming a freelancer, it’s crucial to understand what you’ll be responsible for so you aren’t left owing the IRS. For instance, freelance writers often get to work from home, which may seem like a dream come true, but they often don’t have taxes withheld from their paychecks because they are considered to be self-employed. This means you need to set aside a certain amount of money every payday that can be used to pay your taxes.
Health Care and Retirement Benefits
Your potential new job may seem like a huge step up, but it’s important to look at the details as well as the bigger picture. You may have secured a larger salary, but are the health insurance and retirement benefits as good as your previous job? If not, you could be paying for that increase in your income. So, make sure to look at the company’s 401K plan and compare your insurance policies to get an idea of what you’ll be responsible for.
Think About the Details
Changing a job often comes with a longer commute, which can put a lot of wear-and-tear on your car and jack up your gas spending for the week. If you’re being offered more pay but have to consider these details, it’s a good idea to check out carpooling with a coworker; this will help you save money each week even if you have to drive a bit farther.
Changing your job can be a stressful life event, so make it a little easier by thinking about the details before you jump in. This will help you take control of your finances and your budget, which will give you peace of mind as you make a move into a new career.
Amy Collett is the creator of Bizwell.org. She aims to provide professionals and entrepreneurs the extra boost their branding needs.