Changing jobs—or switching careers entirely—can be exciting, but it also comes with financial uncertainty. Whether you’re moving by choice, starting a new business, or adjusting after a layoff, careful planning can help you stay on track and avoid unnecessary stress.
Step 1: Understand Your Current Financial Picture
- Review income and expenses. Know how much is coming in, how much is going out, and where you can cut back temporarily.
- Check your emergency fund. Aim to have at least 3–6 months of living expenses available, especially if there may be a gap between paychecks
- Review debts. If you have high-interest debt, consider how payments will fit into your new budget.
Step 2: Plan for Income Changes
- During unemployment or a gap: Factor in unemployment benefits, severance packages, or side income. Avoid dipping into retirement funds unless absolutely necessary—they often come with penalties and reduce your long-term savings. Read more about navigating unemployment.
- When starting a new role: Understand the timing of your first paycheck, whether benefits start immediately, and if there’s a probation period.
- If self-employed or freelancing: Expect fluctuating income. Set aside funds for taxes and build a cushion for slower months.
Step 3: Manage Benefits and Insurance
- Health Insurance. Don’t let coverage lapse—look into COBRA, marketplace plans, or spousal coverage if your new employer’s plan doesn’t start right away.
- Retirement accounts. Decide whether to roll over your old 401(k)/403(b) into an IRA or your new employer’s plan. Avoid cashing out if possible.
- Life and disability insurance. If these were employer-provided, you may need to secure coverage independently during the transition.
Step 4: Adjust Your Budget
- Prioritize essentials. Housing, utilities, food, transportation, insurance, and loan payments should come first.
- Pause big expenses. Delay major purchases or vacations until your new income stabilizes.
- Revisit subscriptions and extras. Cutting back temporarily can ease pressure during the transition.
Step 5: Protect Yourself from Financial Stress
- Avoid quick-fix loans or high-interest credit. Payday loans or high-rate credit cards can trap you in debt.
- Watch for scams. Job-seekers are often targeted by fake job postings that ask for upfront fees or personal information. A real employer will never ask you to pay to get hired.
- Seek guidance. Financial counselors at credit unions can help you build a realistic plan for your specific situation.
Step 6: Look Ahead Confidently
- Update your resume and skills. Career transitions are easier with a strong skill set and professional network.
- Rebuild savings once settled. As soon as you’re earning steadily, replenish your emergency fund.
- Set new goals. A career change can be a chance to reset your financial priorities—saving for a home, paying off debt, or investing for retirement.
Bottom Line
A career change can feel overwhelming, but it’s also a chance to take control of your finances and plan for the future. With a clear budget, an emergency cushion, and careful management of benefits, you can protect yourself and focus on what’s next in your career journey.
If you’re navigating a career change and want help reviewing your budget, benefits, or financial goals, we’re here for you. Visit IC Credit Union ‐ Get in Touch to connect with us today.
