There’s a lot of choice for job seekers right now, so it could be a prime time for you to consider trying something new.
But before you take the leap, it’s wise to look into the financial impact of a career change.
We asked Jane Jackson, career coach, and Leah Lambart, career coach and director of Relaunch Me, for their advice.
Depending on your situation, making a career change can take time. It typically takes someone in a mid-management role three-to-four months to make a transition, Jackson says. That covers the time it takes to explore what’s out there, promote yourself, apply for roles and go for interviews. But with a lot of job seekers having the same idea of reinventing themselves or looking for something better, that timeframe could now be drawn out, she says.
Whatever your situation, thinking about the financial impact before you make a change is wise, Jackson says. “If you’re thinking about leaving your current role because you’re unhappy and it’s not tenable to be in it, then you need to have a buffer in the bank so you can draw upon it monthly.”
Here’s what to know and how to start planning.
Exactly how much money you should put aside for a career change will depend on factors like whether you have a mortgage, your family situation and your lifestyle expectations. But Jackson advises to have at least six months of expenses saved for the move.
Lambart recommends a thorough financial review before you make the leap.
“Review your financial situation starting with your day-to-day expenses as well as your long-term financial goals, such as planning for your retirement,” she says. “If you are not already using a budget, start tracking your income, expenses and savings using something like the MoneySmart budgeting planner.”
You might also want to think about ways you can live more frugally while you’re adapting to your new career, says Lambart.
“Most of us can reduce costs in some areas,” she says.
While having a healthy savings safety net is important, Lambart also says it’s worth thinking about superannuation and whether your new role will come with a pay cut. This is especially true if you’re transitioning from an industry that you’re quite experienced in to one where you’re less senior.
“Career changers do need to be mindful that their superannuation could be affected if they are out of the workforce studying for a period of time, or if they need to take a step back financially to facilitate the career change,” she says.
“Having said that, there are often ways to change career without a change to income, but this will greatly depend on the ability to transition to a new career without further study and instead relying on networks and transferable skills.”
When it comes to skills, remember, you’re not starting from scratch – identifying your transferable skills can help you see what you’ve already got to work with.
Like anything challenging, making a change to a new job or career is best broken down into steps.
A career change might seem like an overwhelming idea at first, but the current job market could provide just the right environment for you to make the leap. By researching, speaking to others, considering your finances, and forming a longer-term plan, you can start taking steps in a new direction.
Independent research conducted by Nature of behalf of SEEK, interviewing 4800 Australians annually. Published April 2024.