I work with a number of clients that are afraid to leave their current jobs for various reasons. One reason I hear most often is about financial fear. Unfortunately, we live in a time when many people have little savings and literally survive from one paycheck to the next. This lifestyle leads to high stress and limited possibilities.
If you are in the market for a new job or career more aligned with your interests, that awesome opportunity may offer a lower salary than you are currently receiving. You may also be interested in working part time so that you can pursue a hobby or class that is of interest to you and would add a great deal of value to your life. Or, if you are like a growing number of people, you may want to retire early and enjoy other experiences.
If any of these lifestyle and career changes are something you want, how can you afford the change? One answer may be to reduce your bottom line.
Thoughtful change cannot be obtained without action.
Add up your expenses. Take a hard look at your budget. If you don’t have a budget, you have your first assignment. Make a budget. List all of your monthly expenses—mortgage or rent, utilities, car payment, loans, credit cards, etc. (If you are spreadsheet savvy, this is a great tool to use for this exercise.) Add up the expenses.
Review your expenses. Take a look at where your money is going. What are the biggest expenses? How can these expenses be reduced? If your greatest expense is your mortgage or rent, can you downsize and save money? If your greatest expense is for an auto, do you really need that car or a car at all? If your greatest expense if for entertainment… can you party for less?
Reduce your expenses. Take control of your life by taking control of your expenses. Where can you trim costs? Generally, one of our greatest expenses is for a roof over our head.
Could you live in a smaller home—a smaller apartment or a tiny house? In 1950, single-family homes averaged 983 square feet, according to the National Association of Home Builders. The median size of new single-family houses was at a record 2,384 square feet in 2013. What has all the upsizing cost us?
A new movement toward tinier living has taken hold. Tiny homes, defined as 500 square feet or less, allow people to cut their housing expenses, live simply, and go mortgage-free. Would mortgage-fee allow you to make a career change? Go to Google and search “tiny house movement”. You will be amazed with the opportunities a smaller space can provide—not only financial independence.
Cut the cable and the landline. Reducing costs for utilities can be a challenge, especially when you are required to use public utilities and when you live in VERY cold or VERY hot climates. Utilities that are in your TOTAL control are those linked to television, Internet, and phone. Cutting the cable does not mean you have to forego your favorite television show, disconnect from Facebook friends, or never call your mother. Just Google “cut the cord” and a whole host of articles sharing cable alternatives will pop up. Hulu, Amazon Prime, and Roku, to name a few, are options to access your favorite shows at a fraction of the cable price.
Cutting the landline and opting for wireless only is also an option. Cell phone plans no longer just offer a phone connection, but also Internet. Many options remain costly, but with increased competition, hopefully we will see prices continue to fall.
Transportation costs. What about downsizing your ride? If you add up all of the associated expenses of auto ownership—purchase cost, maintenance, insurance, fuel, parking, etc.—this can also be a big ticket item on your expense sheet. If you live in a metro area, could you walk or bike to work? If you live further out, could you take public transportation?
Where else could you trim expenses?
Reducing expenses clears not only the financial obligations that may be preventing a career change, but it also increases the space in your life that allows for personal freedom.
Like the credit card commercial:
Living in a 4 bedroom house in the suburbs: $350,000 Owning a shiny new sports car: $48,000 Living a life on your terms: Priceless
It’s your life and your career… make it work for you!