In 2001, not long after I flew the corporate coop, I got a phone call from a former colleague who was surprised that I had left my executive perch and shocked about my choice for a livelihood going forward.
He agreed with my premise that there was a staggeringly large market of dispirited corporate workers yearning for change, but he had only one prism from which to view my decision: "It's a money thing" he said. "And I happen to like it."
I'm sure you like the money, too. You want a career change and you want to pay your bills and operate in the real world without living hand to mouth. You want, and deserve, work you care about and the capacity to earn a good living.
Achieving both of these goals means carefully managing your financial risk - and here are three critical strategies to do that:
1. Keep your day job. No matter how frustrated you are with your current work or company, let it pay the bills while you figure out your path of change.
Think about your current work not as an end in itself, but as an enabling force that will allow you to make a shift - on your terms – when the timing works best for you. Work you love emanates from the heart; financial pressure stifles your ability to make decisions that are aligned with your inner truth.
2. Test your way into new work. Successful career changers often make a series of smaller, incremental changes before they land in the role to which they feel destined.
Each interim landing point is an opportunity to learn more about yourself and the kind of work that really matters to you. Some of these landings could be actual new jobs, while others could be volunteer positions or moonlighting opportunities.
3. Be willing to make trade offs. Before you jump into the gritty details of calculating expense budgets and reserves, think about the degree to which you are willing to make financial trade offs.
For example, are you will to give up extra lattes, pack a lunch everyday and eliminate your premium cable subscription? Would you consider requesting a four-day work-week to enable you to have extra time to take on educational requirements of a new career? And if you've built substantial equity in your home, are you willing to sell it and buy a smaller place with a small or no mortgage?
I'm not suggesting that all these sacrifices are absolutely necessary. But I do encourage you to dive into some personal soul-searching and come to grips with how willing – or unwilling - you are to accept changes that would enable you to make the shift you want. In other words, when reality bites, how hard will you bite back?
The Emotional View
Most business professionals have traditionally thought of success in terms of promotions and earnings increases. External measures, such as your year-end W2, are the barometer for status and personal self-worth. On the other hand, internal values tend to drive career changers: success has more to do with how well their daily lives fulfill their deepest sense of self.
As an example, as a result of our sessions on values-based coaching, my client Regina re-discovered her passion for activism – for giving back to the world. Ultimately, she left a large corporate retailer and took her graphic design talent to work for a kinder, gentler non-profit organization – part-time - to create extra time for her volunteerism.
It's not that money wasn't important to Regina, it just wasn't the most important thing.
The Financial View
There is no magic, absolute dollar amount that works for everyone. Each of us defines a "full life" in a different way, and each of us has different obligations and thresholds of what it takes to live, not to mention different career goals and timetables. Yet, in spite of these variables, some guidelines can be offered. If you are:
Moving from one paid position to another:
- A minimum of six months' of living expenses is considered good financial practice at all times
- Consider adding an amount equal to the differential in your income for any period of time you expect to be earning less than your current role
- Credit card debt is minimal or non-existent
Moving from full-time work to developing a new business for which you already have the technical and business skills and network:
- A minimum of two years' living expenses set aside
- No credit card debt
Developing a new business for which you do not currently have the technical skills, business skills or network:
- A minimum of three years' living expense set aside
- No credit card debt
Financial fitness for career changers includes paring expenses and increasing income. Aim for lean – but don't cut into the bone. Know precisely what you are spending today and ask yourself what can be eliminated. Consider future increases (college tuition, a wedding) and decreases (mortgage paid off?) and creatively explore ways in which you can boost your reserves quickly.
You serve yourself best when you let the math dictate your timing – not your heart. You may feel like jumping ship immediately - but financial safety comes first. When you rely on the math, you can rest assured that your career change is a matter of "when" not "if".
