Financial mistakes to avoid when changing careers

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Looking to make a switch in careers? Make sure you do it right – a poorly planned career change can have a lasting impact on your finances. We’ve highlighted three financial mistakes to avoid when changing careers.

1) Rushing the decision

Why are you looking to change careers? Perhaps your industry is dying, or you simply realised what you are doing isn’t your passion anymore. Whatever it is, before you commit to changing careers, it is important that you are doing it for the right reason. Oftentimes, employees quit their job prematurely. This results in them relentlessly applying for any company that is hiring. Yes, they could end up happier, but in a worst case scenario, they can end up in a role where they are even more unhappy, and are receiving less financial benefits.

2) Prioritising salary

Are you in a low-paying job eager to make more money? You may be looking to take a big step and enter a new industry to be able to earn more. If that is the case, it’s important to not choose a new job based solely on the potential salary increase. As valuable as money is, you also need to make sure you that the new roles matches your passions in life. Not to mention, you need to consider whether you have the skills to be able to enter a new industry – if not, you may end up having to outlay significant sums of money to upskill yourself.

3) Not having a financial plan

You’ve taken time to think things over, and you’re now sure you want a career changeover. Next step? It is critical that you financially plan for your next move. By planning effectively, you will be more likely to remain financially resilient whilst transitioning, and will be able to overcome any unexpected life events. When planning, make sure to consider the following:

  • Account for extra charges – When creating your budget plan for a change in careers, it can be easy to forget about certain expenses. To prevent this, it is important to carefully research  the costs that you may incur by making a switch.
  • Don’t spend too much – Often when people transition, they continue living the same lifestyles, making it hard to withstand unexpected expenses. A simple budget plan can help you work out where you are spending too much.
  • Save (A LOT) – As the coronavirus pandemic taught us, our futures are often uncertain, so it is important to have a safety net so that you can tackle any unexpected events. This doesn’t mean to just save in preparation for your switch, but also during and thereafter.
  • The information provided in this article is for guidance and educational purposes only. Police Credit Union Ltd. does not offer regulated financial advice. Please seek independent financial advice.

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