How to Plan Financially for a Successful Career Change

How to Plan Financially for a Successful Career Change Photo by  bruce mars  from  Pexels Whether you’ve found something more interesting, looking for a more lucrative change, sick of sitting at home, your current employer is downsizing, or you want to start something of your own; whatever be your reason for making a career switch, plan your finances before you take the plunge. And, if you have made up your mind to reinvent your career but funds are keeping you from fulfilling your dreams, then an education loan for working professionals is your gateway to a successful career change. Follow these 6 steps to make sure there are no setbacks and it’s a smooth sailing career change for you:               1) Understand the Cost of your Needs, Wants, and Desires The most important aspect of a successful life transition is in knowing how much you spend daily and breaking it into the things that you need, want, and wish for. Depending on where you live and your lifestyle, you can account for your housing, food, clothing, transportation, medical care and bare minimum requirements. A car, cable TV, latest tech gadgets, eating out at restaurants, gym memberships, and designer clothes are your wants and desires that you can cut back on. In a nutshell, you would need to control your wants and desires and save as much as you can when you are looking for career opportunities. 2) Save for a Smooth Transition Life is unpredictable and money is your saving grace, especially if you are financing a new career. Savings give you the freedom to take sabbaticals, the flexibility to work part-time, and to change careers at any point in life. When you have savings, you are prepared for every transition in life and it also takes away the angst of financial security caused due to the turbulence.   3) Make Your Second Innings a Part-time Job and Upgrade Your Skills   A career change calls for training and education so it is important to expand your knowledge and upgrade your skills. Take up a course or two in the subject matter that interests you or you can also go for a professional certification or a degree so you have a solid amount of knowledge for your new career. Taking up a part-time job in your chosen industry before you make a full-time career change will also give you valuable insights into the challenges that await you on the other side and prepare you. 4) Get Your Credit Score in Top Shape It is very important to have a good credit score when you make a career change. You can build your credit score by paying all your bills and EMIs on time as you may need a loan if you are starting a new business or relocating to a tier 1 city. Some employers also review your credit score so you need to maintain it. Do not open a new credit account, transfer your balance, or close any account as it can lower your credit score and adversely impact your transition.     5) Know the Benefits of Relocating   If you are moving to a new city in search of better prospects, then be sure to find out if your new employer covers any portion of your moving expenses. Your budget will be affected in a big way if you need to pay for expenses out of your pocket. So weigh the benefits of your new job and compare them with the costs you need to incur for career change. If you would be able to make up for the cost once you are settled, then the career change might be worth it. But, if the change is going to derail your finances, then you may want to consider other career opportunities or you can take a loan for working professionals. 6) Be Prepared to Miss Paychecks and Make Provisions     Whenever you make a career change, whether you are leaving your IT job to become a chef or quitting architecture to become a model, you should have a financial plan in place. Even if you have secured a new job and arranged a week off in between for a break, there is a possibility of an accident, a medical emergency or a delay before you get your very first paycheck after your career change. And, if you have pay cycles or EMIs that you cannot miss out on, then you absolutely need to create financial buffer. You can follow these simple tips to launch and finance your career change or you can apply for a personal line of credit. A personal line of credit is available online, has a quick approval process, involves no paperwork and you will be charged interest only on the amount you withdraw. So if you don’t dip into your credit line, you are not charged any interest. It stays with you for as long as you need it and gives you the freedom to venture into a career change with full confidence! Author Bio: Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his lifes mission to help and educate people on various financial topics, so email him your questions at .