Starting a new career or changing jobs can be stressful. Learn expert tips from a financial advisor specializing in helping job changers.
Congratulations! You’ve decided to change jobs or begin a new career. Or perhaps, the decision was made for you? Either way, the weeks or months it takes to move from one employer to the next may be filled with uncertainty and anxiety. Beyond the emotional rollercoaster of saying your goodbyes to former colleagues, you’re tasked with remembering the names of your new coworkers and trying to assimilate into the new organization quickly.
From a financial perspective, you’ll need to determine what to do with your old 401(k) and research how you can get the most value from your new employee benefits package. Not to mention, your salary may be changing, and your expenses may spike as you upgrade your wardrobe or incur new expenses. The financial decisions you make during this period can have a significant impact on your personal finances.
Hiring a financial advisor who understands the right money moves to make throughout the job-changing process is a smart way to reduce your stress and increase your confidence in the decisions you make throughout the transition.
You’ll likely find dozens of nearby financial advisors well-suited to help you reach your money goals with a personalized plan. But it may be more difficult to find a financial advisor who specializes in helping job changers successfully manage this complicated stage of life.
Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose to hire a specialist financial advisor who lives hundreds of miles away if you decide their knowledge and experience working with job and career changers is a better fit to help with your unique financial planning needs.
Financial Planning Tips for Job and Career Changers
💡 In the Q&A below, you’ll gain insights from financial advisors who work with job changers to help them make smarter decisions so they can enjoy life more with less money stress.
🙋♀️ Do you have questions not answered below? Use the form on this page to submit your questions, and we’ll update this article with answers from the financial professionals and educators in the Wealthtender community. You can also contact the financial advisors featured in this article directly to set up an introductory call or ask your questions by email.
Q&A: Financial Advisors Specializing In Helping Job Changers
Five Questions with Ayad Amary, MBA, CFP®, AIF
We asked Center Valley, Pennsylvania-based financial advisor Ayad Amary, a specialist serving people going through a career transition, to answer questions useful to people preparing to change jobs or begin a new career.
Q: What is a common financial planning challenge faced by people who are preparing to change jobs or begin a new career? How do you work with them to overcome this challenge?
Ayad: In general, a new job or position often comes with higher pay. If you are receiving an increase in pay as a result of your new job, the one challenge that is often an unintended consequence is a phenomenon known as lifestyle creep. Said another way, the more you earn, the more you spend.
I often counsel clients on the importance of staying within the same budget as prior to their increase in income until they increase their savings rate. Yes, it is ok to reward yourself with a bigger spending budget but not to the detriment of your long-term plan.
Q: For people who are preparing to change jobs but who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?
Ayad: This all depends on the complexity of your current situation. If there are specific decisions that require expertise in dealing with topics such as incentive stock options, restricted stock units (RSUs), or performing due diligence on comparing benefits packages, then hiring an advisor makes sense.
If relocation is involved with your job change, that may be another situation that calls for advisor expertise to determine how the cost of living may impact your near-term and long terms plans.
In essence, you should consider hiring an advisor if you feel they can add value to your circumstances. It may not always be necessary but generally speaking, the right advisor can add value to your life in many ways as you contemplate major life changes.
Q: How do the services you offer people who are preparing for a significant job or career change distinguish your firm from other advisory firms?
Ayad: Since I run a planning-based practice, I am always keeping the big picture in mind for my clients. I use an approach that incorporates both statistical analysis and emotional analysis. Many people often say, “do not use emotions to make financial decisions,” but I am not one who always agrees with that philosophy.
Life is full of emotional decisions, and this should be part of the conversation along with the “numbers”. When major decisions are to be made, I will run different scenarios using our proprietary software to see the financial impact on their long-term plans, but the numbers are only half the battle.
The other decision points involve conversation around how this decision will impact their life in other ways. It is important never to lose sight of the purpose of their career and why they are looking to make this change. How will this move fit with your overall life goals?
Q: When you first speak with a client who says they are thinking about a job or career change, what questions do you like to ask to understand their unique circumstances better and determine how you can best help them achieve their goals?
Ayad: What is the driving force behind your desire to make this change? Is it strictly for higher pay, a particular company you want to work for, or is it a developmental move for career progression, etc.?
The motivation for the change can tell a lot about an individual and their long-term plans. I want to be sure they are considering this career move for the right reasons. Every step one takes today will shape their road map to their future life. I try and put my clients in the best position possible for long-term success.
Q: For clients thinking about leaving their current employer to accept a job elsewhere, what actions do you recommend they take before resigning and shortly thereafter?
Ayad: Make a list of important contacts that you may need to get in touch with after leaving. HR, benefits coordinators, former supervisors, etc. Always leave your former employer on good terms and be a professional.
Most industry circles are smaller than you think, and word travels fast if you burn your bridges. Also, one never knows where the future takes you, you could run into a former colleague at your new employer someday or maybe have an opportunity to return to your old employer for a better position.
Original article written by Brian Thorp
View Ayad’s profile page on Wealthtender
This article is intended for informational purposes only, and should not be considered financial, investment, business, tax, or legal advice. You should consult a relevant professional before making any major decisions.