Personal Finance Series: How to Plan for Unexpected Career Bumps

No matter where you are in the arc of your career, personal finances can be tricky. You’re constantly weighing your salary with benefits and flexibility and work-life balance and tax benefits, and other perks. That’s a lot to consider! And if you have an unexpected setback in your employment—a layoff, a restructuring, or a pay cut—personal finances get even more complicated and stressful. Here’s how to plan for an unexpected career bump.

 No Career Is Perfect – Plan for Change

Time your move

If you’re sick of your job and you have the luxury of timing your departure, do so carefully.. Wait until you’ve thoroughly researched how your budget and lifestyle will be affected and until you have that money saved up. Before you leave your job, start practicing what it will mean to live off of a shrunken budget—fewer meals out, no new clothes, no beach vacation. Those sacrifices will look different to each person, so plan out what your sacrifices will be.

Account for those extras

When you find yourself looking for a new job, account for those extra expenses that might add up in the process. Will you need a new wardrobe for interviewing? A new laptop or computer to apply for new jobs or even work from home? Will you need additional training, union membership fees, or other licensures? Should you move? List your current expenses and weigh them against those extra expenses that might pop up during a job search.

 Pay off debts

Living off credit can be a very scary thing, so avoid it when you can. You might tell yourself it’s just for a little while, but credit card debt can quickly snowball into a huge financial hole. Pay off your debts as soon as you can, so that if a financial setback happens, at least you won’t have those high-interest rates hanging over your head.

Put away some savings.

Even if your job seems pretty secure and you don’t anticipate any career bumps, there are other unexpected expenses that pop up all the time and can set you back if you’re not careful. You might have a leaky roof, sudden medical expenses, or even something you do by choice, like a big trip or Christmas gift. Either way, it’s best to plan for those by saving money when you can. Emergency savings certainly isn’t glamorous, but it’ll sure make you feel better when those costly life expenses come up. Track your spending and your monthly budget and gradually put a little more away into savings each month.

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