Home > Funding > How to Finance a Career Change

How to Finance a Career Change

By: Lucy Debenham BA (hons) - Updated: 30 Mar 2015 | comments*Discuss
 
Finance Career Change Career Finances

Once you've decided that you're ready for a career change, and you've identified what you want to do, you may find that the shift also involves a pay cut. In most cases, the drop in pay is temporary, but it is very real. Perhaps it will take time for you to learn new skills, and there may be a Training Period during which you'll be trying to understand new job requirements. In most cases, however, your salary will recover to and probably surpass former levels. So it's important to view the situation not as a cut in pay, but as a necessary investment in a new career.

Financing Freelancing

Differences in monthly income can be especially severe if you are changing to a Freelance Arrangement or starting your own business. Keeping things on an even keel will require some work ahead of time. Make sure you have an emergency fund in savings. The best case would be to have enough to cover six to eight months of your necessities.

Sometimes it's possible to begin doing some freelance work or business building on the side as you prepare for the change. Don't burn any bridges as you prepare to leave your old place of employment, particularly if you're going freelance.

You should consider whether Starting Your Own Business requires any extra expenses you aren't paying now. If, for example, you plan on Working Out Of Your Home, your insurance cover may need to be amended.

Your car's insurance premium may also changes due to extra mileage or different usage; you must be protected by the correct insurance if your car suddenly changes from social to commuting or commercial use. It's not a reason to forgo the career change, but it's something that should think about. You should also keep in mind that certain careers require additional insurance, like professional liability insurance or errors and omissions insurance.

Planning Ahead

Another requirement when you're starting your own business is the creation of a business plan. You may think about skipping this process if you don't intend to borrow money or find investors, but it is a critical step in any business. You must know where you are, where you are going, and how you intend to get there. A business plan helps you realistically assess costs and project profits, and will serve as a guide to how much salary you can take and how much must be reinvested.

If you've progressed at all in your present career, you can almost count on facing a gap between your current pay and your new income. The question is, how big is the gap and how long will it exist? Is your new career choice still your first career choice even with a gap.

Taking a pay cut as a result of a career change could certainly prove to be a psychological blow, but if you've done your research well, you should be taking up new work about which you are passionate. We all tend to do those things that we like better than things we don't, but better performance at work should result in success – and ultimately success should add to your income.

Another thing to consider is that doing what you love on a daily basis reduces stress, and lower stress levels generally mean better health. So if your new career or business makes you happier and healthier, what's a little pay cut?

Borrowing From Family

Some people accept loans from friends and family to finance their career change. Find out if this could work for you by reading our article Can You Afford To Borrow From Friends and Family.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
[Add a Comment]
@Dave, not sure if there's anything specific related to health and safety, but there are bursaries available for adult learning. Information is here.
ACareerChange - 2-Apr-15 @ 10:03 AM
I am currently in engineering in the Telecoms sector, but I would like to peruse a career in Health and Safety, RoSPA, IOSH etc. I would like to know is there any government funding for this type of career change?
Dave - 30-Mar-15 @ 11:07 AM
Can I get some help with nursing course.
bj - 11-Sep-14 @ 2:16 AM
I want to become a nurse in gp surgery so I want a beginners training and degree. Can you please let me know which is the best course.Thank you.
bj - 11-Sep-14 @ 2:13 AM
Hi there, This is a great article what i was searching on career changr. I am pretty much impressed with your good work. You put really very helpful information.
careerguidance143 - 14-Dec-11 @ 12:29 PM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Total Custard
    Re: Becoming a Mechanic
    Hi I'm a 35, and currently an aircraft mechanic, with a city and guilds Level 3 in Aeronautical Engineering and a NVQ Level 2 and 3 in the…
    24 August 2020
  • Maddy
    Re: Becoming a Carer
    Hello I’m a 54 year old woman recently left my career in retail and wanting to change my work environment and make a difference in time…
    18 August 2020
  • Azza
    Re: Becoming a Mechanic
    Hi I am a HGV Driver & work nights & Looking to do a HGV Mechanic course & was wondering if I’m too old to learn?
    27 July 2020
  • Ash
    Re: Things to Consider Before a Career Change
    Hello there, my names Ashley And I am looking for a career change, and wanting to learn to become a painter…
    24 July 2020
  • Sazzy
    Re: Returning to University
    Good morning, I am extremely keen to study and become a social worker. I have done a lot of research into this topic. I understand I…
    9 July 2020
  • Kat gale
    Re: Becoming a Paramedic
    I need pinging in the right direction I want a new career change at 48 but don’t no where to start please help
    10 June 2020
  • Pat
    Re: Becoming a Painter and Decorator
    I am looking for a career change. I've done a fare bit of decorating work and want to work for myself any advice would be…
    4 June 2020
  • nita
    Re: Becoming a Mechanic
    I'm 40 I failed myatric I'm working in motor industry I want to do motor mechanics but I'm not sho if there is any chance for me
    1 June 2020
  • Barkerelli
    Re: Becoming a Social Worker
    Hello. I have worked in Adult Social Carr all my adult life after studying Social Policy at university. For the last 12 years I have…
    31 May 2020
  • Ron
    Re: Where to Get Help With Funding a Career Change
    Hi I am looking to move away from IT (engineering programming) and looking to move into Procurement / FMCG…
    22 May 2020