Over the past year, employees have quit their jobs in droves. Some, overwhelmed by pandemic stress, are switching to new industries. Others are simply following better opportunities that weren’t available before. If you’re considering a change in your job, it’s important to consider the impacts that might have on your finances.
Moving On for Better Pay
Many of the reasons you might choose to leave a job aren’t financial at all. If the work environment has become toxic, if you’re unfulfilled by what you’re achieving, or if you don’t get along with your coworkers, a job change may be very tempting. But, since the reason most people work is to pay bills and save up for goals, it’s vital to consider the financial end.
Luckily, if you’ve been waiting for your chance to leave a bad workplace, this may be your moment. Due to low unemployment and COVID growth, it’s a workers’ market. Salaries and benefits are better than before in most sectors, as businesses try to lure choosy candidates. If your workplace hasn’t caught up to the trend, a look around may reveal much better options.
Salary, of course, is the most obvious consideration. Keep an eye on job listings for your experience level to make sure you’re still being paid a fair market rate. Potential for future advancement is important as well. Working for lower pay may be worth it for a while, if you know there’s a clear track to higher pay soon.
If you’re thinking of moving to an entirely new career, you’ll almost certainly need to take a pay cut at first, while you build up relevant experience. However, you may be able to reduce this by getting the necessary qualifications and training before quitting the job you have. Virtual courses have never been more plentiful.
Benefits Count, Too
Salary isn’t everything. You can sit down, with the help of a financial advisor, and work out the total value to you of your salary and benefits package. Consider the cost of your health insurance and how much your employer contributes to your 401(k), if you have one. If your benefits are scanty, you may find it pays off to take a lower salary that comes with more generous benefits.
Don’t forget lifestyle benefits. Many workers are leaving in-person jobs for fully remote work. If you have an option like this available, how much money would you save by not having to commute in? Would you consider moving to a less expensive area? What might your budget look like after that?
Don’t Rush Into a Job Change
Even if you’re eager to move to greener pastures, resist the urge to quit without a new offer lined up. The job market isn’t that good. The only way to know for sure you could land one of the tempting job listings out there is to apply.
Remember, also, to consider the costs of a transition. Will you lose a pension or restricted stock units that haven’t vested? You’ll surely lose all your unused vacation time, though you may be compensated for it. If you need or want to move, that will have costs of its own.
No matter how you feel about your current job, take a good, hard look at your finances before considering an option that pays less. Can you really cut back your spending, at a time when prices are on the rise? If costs are already tight, you may be able to score the job you want at the salary you need by waiting just a little longer. Even in 2022, the job search will still likely take some months.
Talk to Your Financial Advisor Before Changing Jobs
To know whether it’s time for a change, you need to understand both the job market and your current financial situation. For the first, consult job listings, career networks, and people you know in your field. For the second, you need to sit down with your financial advisor for a hard look at your finances. Would you really come out ahead with a new job? Are there goals you will have to delay? Or is a job change the key to meeting your financial goals?We can connect you with a financial advisor who can help you make the best decision. Contact us today to be matched for free.