How to Budget for an Easy Transition when Changing Jobs

Moving into a new job and potentially a new career can be an exciting experience. This is one of the many major life events that can introduce you to a host of new opportunities but also brings with it a range of stresses to consider too.

The good news is that if you manage to get through your transition to a new role in one piece, then you might end up with a happier work life, and even a bigger paycheck. Of course, there are many alterations to make when you’re switching career – it’s not just about going to a new office each day.

You’ll also need to think about how your budget is going to change when you take on your new position. Here are a couple of tips that could assist in making your transition easier.

Step 1: Know When You’re Going to Get Paid

Different employers can have unique payment policies. If you’re used to being paid at a certain point every month, then you might have arranged all of your direct debits and monthly payments to go out on a certain day. Unfortunately, if your new boss gives you your income after that date, then you’re going to have a problem – particularly if you live paycheck to paycheck.

Find out which day of the month you’re getting paid on – or when you’ll receive your money if your payment schedule isn’t monthly. Make sure that all of your expenses, including any loan repayments and utility bills, are organized to go out at the right time.

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Step 2: Assess Whether you Have more or Less Money

A better wage isn’t the only reason to switch to another job. You might decide that you want to move into a new position because it means you can avoid a long commute, or because it helps you to get into a field that you’re interested in. A lot of people seeking a new career need to deal with a dip in their regular income for a while, while they work on reaching a more senior position.

If you’re going to be earning less money, then you’ll need to look for ways that you can cut costs. For instance, you might need to switch your loan to one with a better interest rate by searching for new personal loans online or consolidating your debt. You can also consider switching to a new utility provider or looking for other plays where you can reduce expenses.

On the other hand, if you’ll be earning more money in your new job, then you might need to decide how you’re going to use that extra cash. For instance, are you going to dedicate more money to your savings goals, or is there a new service you’d like to pay for?

Step 3: Find out if Any Expenses will Change

Sometimes, a change in jobs also means a change in expenses.

For instance, if you’ve got less of a commute to deal with in your new career, then you won’t have to spend as much on gas and travel each day. Additionally, you might find that your new employer gives you better health and dental care, so your expenses go down when it comes to things like insurance.

There are plenty of ways that your expenses might evolve when you begin a new career, so take the time to sit down and consider your budget again, as though you were starting from scratch. Don’t’ forget to include any new costs that you didn’t have to look into before. For instance, if you’re working in a professional office where you might need to meet with clients regularly, then you might need to spend more on suits and professional clothing.

If you are expected to drive to a lot of appointments, you might also decide that you want to upgrade your car or get something that gives you better mileage. This may man comparing your options for loans or taking a chunk out of your savings fund.

Step 4: Learn What You Can About Vacation Days

Finally, remember that vacation days are likely to have an impact on your budget too. Some companies are beginning to offer cash payouts for people who don’t use their vacation days. If this is the case for you, then you might want to look into how you can reduce your vacation time as much as possible.

On the other hand, if you’re switching to an entirely new type of employment – such as being self-employed, then you won’t get any paid vacation days at all. This means that you’ll need to organize your budget to ensure that you have enough cash aside to keep you going through the times when you need a vacation with the family, or you just want a break from work.