Once you get past the emotional factors of making the decision to change your career, there are many critical financial factors to consider. Taking a balanced approach to a career transition is all about working hard and taking calculated risks to reap the mental (and financial) rewards!
Being aware of how much you spend. Breaking it down into ‘needs’ and ‘wants’ will help you find the key to financial freedom and successful life transitions. Food, shelter, clothing, transportation, communication, medical care – these are basic necessities that you need to budget for. By minimising how much you spend, you allow yourself the financial cushion to break the chains of a career that’s no longer satisfying.
Money is often the biggest stumbling block when it comes to taking the plunge, as most people know that career changes don’t come cheap. This is because starting over in a new field, undergoing training and education, embarking on a philanthropic journey, or becoming self-employed come with an initial price tag. Consider a plan for these costs:
When embarking on a career change, familiarise yourself with the ins-and-outs of Australia’s employment legislation, which changes frequently. Australian workplace rules are laid out by ten national employment standards (as advised in the Fair Work Act of 2009), with additional workplace rules and employee protections applying in unionised industries or according to Enterprise Bargaining Agreements.
‘Final pay’ is what your employer owes you when your employment ends. Most awards state that employers need to pay employees their final payment within 7 days of the employment ending. You can check your employment contract for more details.
Under Australian law, you should get the following entitlements in your final pay:
Sick and carer’s leave is not paid out when employment ends.
The Fair Work Ombudsman has a range of online tools for calculating your final pay.
When it comes to understanding your first pay in your new career, you should talk to your employer about what your ‘employment type’ will be before you start your new job. Your type of employment will affect your hours of work, your rate of pay and some of your entitlements. Rates of pay and breaks will be laid out in your award or enterprise agreement. For more information, visit www.fwc.gov.au.
You should expect to get a payslip from your employer no later than one day after payday. Your employer should also be keeping records about your employment, including details about your pay, hours of work, leave entitlements and any agreements you’ve made such as an individual flexibility agreement.
When it comes to finding another job, you have the option of looking while still employed or ending your employment to concentrate on your new career move. Looking for a job while employed and continuing to collect a paycheck may seem like the best of both worlds, but it adds a few extra challenges that you’ll need to account for.
Recruiters and companies often prefer to work with still-employed candidates, since they are more likely to have up-to-date skills. This isn’t, however, as important if you’re embarking on a whole new career change and you’re taking time out of employment to further your studies and update your skills.
If you are still employed, you’ll need to make your job search steps stealthy to avoid your current boss knowing. You can do this by:
If you choose to give up your current job in your quest for a new career, bear in mind that job hunting can take time. In fact, 75% of Australians who are currently looking for work have been searching for up to six months. With this in mind, you will need to brace yourself for the inevitable uncertainty of a period that at times may feel has no end. Don’t dwell on this period – instead, use it to polish up your cover letter and resume writing skills, update your job search profile for better exposure to potential employers, and research job-seeking entitlements such as the Newstart Allowance.
Unfortunately, bills don’t stop (even if your paycheck does). Bills don’t go down if your wage goes down either. You still have financial responsibility to your creditors and so you need to have a game plan for when the bills roll in.
With any luck, you’ve saved yourself a strong financial cushion to support your new career transition. If not, or if your job search is taking longer than expected, there are several ways you can keep your head above water when times are financially tough.
Do you really need to be paying for a landline and a mobile phone plan, or can you get away with using just your mobile and save on paying two telephone services?
Everyone needs to eat but what you eat can be altered. Look for coupons, in-store sales and shop online. Buying only what you need online can save you from impulse buys. Also, try to buy in bulk and prepare meals that can be frozen. This will free up some extra time for job searching too.
From Spotify and Youtube Premium to Netflix, Telstra TV and Foxtel, Australians love a good subscription. Add to that- magazines, wine clubs and charity donations, and the amount of money you spend on subscriptions and direct deposits can quickly add up. Do you really need all of them?
Need a little financial assistance to help you get you through your new career transition? Borrow up to $5,000 with Nimble and your journey to a new career could start in as little as 60 minutes once approved.
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