Written by Andrea Bannister
Wednesday, October 16th, 2019
Hours after losing my job as a big company junior executive, I called my new outplacement counsellor, ready to jump into a new role. I soon learned it's called a career transition for a reason: you can't just fast-forward through the job loss process.
As with any big life change, a career transition can upend your financial plans and add new choices to the mix. On top of the decisions I needed to make with my severance package, I had to completely re-evaluate my financial—and life—plan.
"The two biggest mistakes people make when going through a career transition are under-estimating their budget and how much time it will take them to find their next role," says Tracey Bissett, CFA and owner of Bissett Financial Fitness.
Here are the budgeting steps I took after my job loss.
Budgeted for My Next Role
Scrimp on your expenses while developing your job loss budget. At the same time, you'll likely need to boost the money spent on networking, conferences and upgrading skills. I set aside money in my budget for networking events and coffees, as well as university courses to shift my career in a different direction.
Got My Financial House in Order
I hate debt. But when my bank offered me a new line of credit soon after I lost my job—and was still getting regular paycheques—I swallowed my debt discomfort and said "yes"…just in case. Credit offers might end once the regular paycheques stop.
You also need to consider health benefits and insurance. You can talk with the provider of your work benefits and see about keeping your package, although it may be at a higher cost.
Owned My Outplacement
For many of us, our termination package includes outplacement services. I used this time to talk through next steps with my career consultant, attend workshops and gain new skills. I thought of it as years' worth of high quality, no-cost, professional development packed into a few months. As a bonus, during this time I made many new connections with great professionals navigating their own career transitions.
"Always be curious and ask questions as you navigate your outplacement just as you did for your career," says Bissett. "Throughout the process you can ask HR and the outplacement agency: 'Are there questions you typically get from the people in the same position as me?' You can own this process and get the most from it."
Losing your job is painful, emotionally and financially. But taking steps to budget and invest in yourself will help you feel more positive and in control as you plan your next career move.