Home > Funding > Managing Finances When Changing Career

Managing Finances When Changing Career

By: Kevin Watson MSc - Updated: 14 Dec 2012 | comments*Discuss
 
Career Salary Change Career Bills New

The moment you begin to think about a career change, you should make some notes about the management of your finances. This may sound a little cautious, but taking a new job can have significant immediate and long-term effects on your money.

Asking for an Imprest

Whenever you move from one career to another, you still have bills to pay. A transition between jobs may not lead to any problems paying bills, but suppose you leave a job at the end of the month, a job that paid you on the 15th. You then start a job where you will be paid a month in arrears. This means there’s a gap of at least six weeks between salary payments.

Up to this point, you’ve been managing your money on a monthly basis. So, if you have direct debits and standing orders, a six-week gap can disrupt your finances. You may be able to cover this gap with savings, or you may be content to arrange a temporary overdraft with your bank. The other solution is to explain the situation to your new employer and ask for an imprest. This is a sum of money that the employer pays shortly after you arrive. It can help cover any long gaps between salary payments.

The employer then deducts the imprest from your first salary. You therefore have to take this into account as well.

The Cost of Relocation

Another immediate expense you may face is the cost of relocation when you change careers. Even if your new employer helps with relocation expenses, you may receive these only after you’ve moved.

Make sure you confirm when and how you can claim any relocation expenses. If there’s a delay, you may have to use your savings or get a short-term loan.

Safeguard Your Pension

One of the long-term effects of a change in career can relate to your company pension scheme. You should check with your current employer what happens to your pension if you decide to take another job. Is it frozen and payable at retirement? Or can you transfer it to a new scheme?

Profit-Sharing and Share Ownership Schemes

Profit-sharing and share ownership schemes are common in some industries. If you’re part of such a scheme, find out what happens to any accrued profit-sharing and share ownership rights when you change career. As with company pension plans, don’t make any assumptions.

You should also check what your new employer is offering. You may want to change career and get a better salary, but does this outweigh any lost share options?

Company Insurance Policies

Some companies give you life and health insurance. These are benefits that you may want to discuss with a new employer before you accept another job. If you like the idea of such insurances, but a new employer refuses to pay them, bear in mind that taking out private policies is expensive and a drain on your finances.

Other Company Benefits

Your current employer may give you a travel allowance, subsidised gym membership and other benefits. Your new employer may also provide these and more. Either way, it’s worth translating these benefits into pounds and pence so you can compare one job to another as accurately as possible. A gym membership worth £600 per year is a bonus you may want a new employer to match in some way.

So when you change career, manage your finances carefully. You don’t need to do a lot. Simply jot down a few points along the lines shown above. You can then make your move to a new job with greater confidence.

Further Reading

For more information and advice on finance matters when you are making a career change, read our articles in the Funding Category of this site.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Jem
    Re: Changing Career to Become a Social Worker
    Hiya, I have a degree in adult nursing and have been in this job for 4 years - I have 6 months experience in…
    20 January 2018
  • Kyle
    Re: Building and Project Management
    Looking for a career Change. I have a background in financial planning and private banking. I wish to pursue a career in…
    14 January 2018
  • ACareerChange
    Re: Becoming a Teacher or Teaching Assistant
    Natalie - Your Question:I have a ordinary degree in adult nursing what will it take for me to become a primary…
    12 January 2018
  • ACareerChange
    Re: How to Become an Air Hostess
    Livs - Your Question:Hiya I just have a question about any specific A levels. I am just completing GCSE's and am in the process of…
    10 January 2018
  • Natalie
    Re: Becoming a Teacher or Teaching Assistant
    I have a ordinary degree in adult nursing what will it take for me to become a primary school teacher
    10 January 2018
  • Livs
    Re: How to Become an Air Hostess
    Hiya I just have a question about any specific A levels. I am just completing GCSE's and am in the process of choosing A levels…
    9 January 2018
  • ACareerChange
    Re: Returning to University
    Sancha - Your Question:Hi I am 30 year old and I have level 5 certificate in healthcare.I am looking forward to become nurse.I have spend…
    9 January 2018
  • Sancha
    Re: Returning to University
    Hi I am 30 year old and I have level 5 certificate in healthcare .I am looking forward to become nurse.I have spend some time working as…
    8 January 2018
  • Lucy
    Re: Becoming a Social Worker
    Hi I have a BA in drama, applied theatre and education, I am currently a mum of 2 and TA, and want to. Become a social worker, is there…
    5 January 2018
  • Sara
    Re: Becoming a Nurse
    Hi i am currently working as HCA at a GP practice, I wish to go into nursing and become a practice nurse at a GP, my question Is do i have to go…
    4 January 2018
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the ACareerChange website. Please read our Disclaimer.