You have more control than you think you do during a career transition, and one area you can control is your finances. As the old year comes to a close, it’s a very good time to rethink your career plans and make goals for the coming year. With the economy slowly recovering, it is important to lay out a financial plan that will sustain a job search or help support your dreams of a new career.
I recently talked with Dave Ramsey, a personal finance bestselling author and radio-show host about how to handle finances and job searching in the coming year. “Basically, people and businesses are concerned about the next steps in the economy, and if you are an active job candidate, the most important fact to remember is that employers are hiring those who add value,” Ramsey said. Gone are the days when job candidates can apply for a job and expect to be hired. We are living in a much different economy where each decision to hire is based on the return of investment — the value you bring to the company.
This means job candidates need to have their game plan ready when interviewing. When finances are so tight you can’t pay for the basics, your emotional well-being is affected, and that has a direct impact on the impression you make during an interview.
Finances play a part in how long you can sustain a job search. One of Ramsey’s suggestions is to find a part-time job — anything that can help stretch your cash and “keep the four walls up,” as he puts it. Ramsey is talking about ensuring you can cover the costs of such things as shelter, food, and clothing. If you find your funds dwindling, these are your priorities.
Now is the time to take stock of what you own and what you could possibly sell in order to alleviate your debt. If you have an expensive car chances are the upkeep is expensive as well. Continuing to pay for luxury items going your future is uncertain is not a good idea. You can upgrade to a luxury car once you land a job.
Ramsey suggests these proven ways to stretch your finances while you are in job search:
- Stop paying extra on your debt. Apply that money and momentum to save towards an emergency fund.
- Save any extra money you receive, such as a severance package to build up your emergency fund.
- Make a budget. Cover the basics first — food, shelter, utilities, transportation, and clothing.
- As you budget, examine every expense. Look for the things you can cut out or reduce.
- Eat at home. Eating at home instead of eating out can have an immediate effect on your finances.
- Cut up your credit cards. If you don’t have the cash to buy something, don’t buy it.
The financial plan you set in motion today will have a direct influence on the choices you will have in the future. Don’t lose sight of your career dreams even when you are in the midst of a job search. Managing your money wisely during a transition will not only help reduce your stress, it will help you make your job search more productive.
Sign up for Dave Ramsey's Financial Peace University 9 week course at First Christian Church (Houston), beginning January 13, 5-7p.
Start out the new year with the goal of being debt free and a plan for your financial future!