According to the U.S. Bureau of Labor Statistics, the average person holds 12 jobs in their lifetime. Whether you are looking to switch roles or change industries altogether, consider these factors to financially prepare for a job transition.
1. Avoid Making Rash Decisions
Quitting your job in the heat of the moment can make the employment search even more stressful. Start looking for open positions before giving notice to your current employer, so you do not have to take the first opportunity that presents itself.
2. Grow Your Emergency Fund
It’s essential to have a nest egg you can fall back on when not receiving a paycheck. While financial experts recommend at least three to six months of expenses as a cushion, consider 12 months just in case the next job you accept does not work out as planned.
3. Assess Your Monthly Expenses
Many people are unaware of their total debt until they take a big financial hit. Assess your budget and identify areas where you can cut back. Beyond the typical expenses of rent or mortgage, credit cards and student loans, subscription services are a commonly overlooked area that can be easily trimmed to stretch your savings further.
4. Reduce Frivolous Costs
It may sound simple to cut back on every day treats but when it comes to budgeting, this can be the hardest change to make.
Yet during a job transition, the last thing you want is to be strapped for cash. Reducing trips to your favorite coffee shop or local boutique can go a long way!
5. Remember Your Retirement Funds
Fortunately, the money you have saved through an employer-sponsored retirement plan is yours to take when you leave. Yet surprisingly, there’s an estimated $1 trillion in “orphaned” accounts. If you have a 401(k) at your current company, speak with a financial advisor about combining accounts, leaving them with your old employer or investing in an IRA instead.
6. Invest in Professional Development
Enhancing your skillset can make you more marketable to prospective employers. Consider setting aside funds for courses or certifications that align with your career goals. Being proactive in this regard may help you land a better job!
We understand the importance of saving for every stage of life. To explore savings accounts at Ion Bank, contact us today!