Do you find yourself thinking that you’d like to work less or not work at all, OR are you forced to reconsider your work situation due to COVID-19? Do you want to be home with your kids or are scrambling to deal with care for your kids during e-learning/camp shutdowns? Do you want to leave a corporate job for a non-profit position or just do something different? Was your job eliminated or do you feel it’s not recession-proof?
If you answered yes to any of these, you may be ready for a career change. I was there at one point. Of course, the world was different when I did it, but I think my experience can still help. You may want or need to work less but can’t afford it with your current expenses. What are you to do? Many people are in this spot right now due to the situation we are in. Whether you want a career change or are being forced to do so, hopefully my story and tips can help you out.
I once had a demanding career I loved and spent 3 weeks a month traveling around the country. I was the primary earner in our family and I also had 3 small children. It tore me apart to have to juggle my work and home life.
We enjoyed the money and thought we had it all: big house, luxury cars, fancy restaurants, travel, nanny, designer clothes and shoes, jewelry and a collection of expensive stuff. We not only spent a lot of money but we somehow managed to save so we felt like we were doing well. Everything should’ve been fine, and on paper, it was great. The only problem was that I was completely miserable.
I started daydreaming about working less or not working at all but couldn’t figure out how we’d ever sustain our life with less or none of my income. That was mistake number one: we couldn’t sustain our lifestyle with less, we’d have to find another lifestyle.
Don’t expect to be able to maintain the same lifestyle.
Repeat this aloud. Unless you’re already living on much less than you earn, this is mandatory. In some ways quarantine should have helped with transition. With entertainment and going out costs limited, hopefully this transition has been somewhat smooth.
We started playing around with our budget, trying to find a way to live on a lot less. We modeled scenarios of different situations and pay levels. We found that I would not be able to quit working completely for some time but I might be able to cut back if we could curbed our spending. Yay!
Figure out how much you’re willing to adjust your budget and how much money you need before you change jobs (if possible!).
You may need to change your housing, trim expenses, trade in expensive vehicles for more affordable cars, and adjust your overall standard of living. Remember, I was doing this in a different time and it was a personal choice — if you are doing this out of necessity your choices will be harder and more painful. You may have to make choices like selling a home, going down to one vehicle, or pulling kids out of daycare/extracurriculars.
As we prepared for a hopeful change, we also decided that we needed to save more money than we had been saving since it would be much harder to save later. Because we were spending so much, we made a conscious effort to reduce unnecessary spending and direct that money to savings. It was especially important to build up my retirement savings since my 401k contributions and Social Security record would be negatively impacted. The quarantine hopefully helped you curb spending, this savings could help buffer changes you make in your future income.
Be aware of the long term impact on your retirement savings and plan accordingly.
Contribute more to your 401k or IRAs while you have the money to do so. It will most likely require diverting money from unnecessary spending.
If you are unemployed, or struggling to make the same amount you made pre-COVID-19 your retirement fund may be on a treadmill for a while. Avoiding pulling money out of your retirement fund for as long as you possibly can. Once you are able to find work again or you’ve adjusted your budget to allow for contributing again, try to get your contributions back up.
Think out of the box. Find ways to leverage your talent where you and your employer both benefit. Or, look for your dream job and figure out how your experience and skills can be applied.
Once I changed jobs and our income significantly decreased, we had to be extremely diligent with our spending. It was hard, really hard. It takes a lot more than just say you’re going to cut spending to stick with it. We had to stay on top of it and find different strategies when shopping for things like groceries. I went from not paying attention to food prices to examining every single item, planning menus, and only buying what was on the list. It’s all the typical stuff we recommend but it took me some time to adjust to actually doing it on a regular basis.
Be diligent in keeping up with your new budget and spending plan.
Find new strategies for sticking to the budget like menu planning, buying what you need, not what you want, and avoid unplanned spending like the plague!
Whether you’ve changed your income by choice or not, sticking to a budget is hard. Our defenses are weak right now after months of hard news, but we must remain diligent in order to prevent further issues like growing credit card debt.
As we adjusted to our new lifestyle, I would be lying if I said it wasn’t hard. I was much happier and my kids were happier. I felt like I had work life balance for the first time and the bags under my eyes disappeared, but I did miss the freedom to buy whatever I wanted whenever I wanted. It took time to realize that being able to buy stuff wasn’t worth being miserable.
If your work situation doesn’t fit your lifestyle anymore or the current economy has caused a change in your ability to earn an income, you are headed for a change whether you like it or not. Take the time you need to morn this loss and then we must press on. There is hope though. Many have tread this path before you.
Do you want guidance as you navigate the many decisions that go along with a career change? My fellow Hey Money experts and I are standing by and would love to talk you through this. We can help you create a concrete plan for transitioning out of work and how to make and stick to a budget. You can learn more here!