When facing this challenging economy, there is a lot of reevaluation. One item that may arise is whether your current career truly serves your financial and personal needs. For a smooth transition into a new career, avoid these three false steps and travel the new road with the least hassle possible.
1. Failure to budget within your new income
After performing some income research into your new field, start acclimating yourself into that new income, especially if it will decrease. If you currently indulge in dinners out and air flights, eliminate those first.
Even if you move into a more lucrative career, you will have a few years at entry level wages. Adjust your lifestyle to the lowest entry-level income for your new career and live within it while still at your current career to ensure your adjustment to that income.
2. Forgetting career change expenses
Look into possible extra expenses not only for the career itself but for your transition. These expenses may include:
- Career coaching: Your transition may different enough that you require guidance and help showing that your skills transfer.
- Professional fees: Licensing, dues, memberships and other fees may be associated with your new career.
- Capital: If pursuing self-employment, consider the expense of tools, computer equipment and office furniture.
These items are a start to considering the expenses of your career change. They can add up very quickly so give them proper consideration.
3. Failure to assess your new tax situation
A career change may result in a very unpleasant surprise come next tax season. Avoid this surprise by reviewing possible changes to your tax situation.
- Tax deductions and credits: See which ones you will lose and which ones you will gain with income change.
- Self-employment: Consider the financial impact of the self-employment tax.
- Write-offs: Review the business write-offs available to you as well as any you may lose