It’s the start of another year, which for many people is the spark for making big life decisions, including changing one’s career. In fact, switching jobs is among the top 10 New Year’s resolutions for 2022. However, deciding to embark on a whole new career path entirely is far from straightforward.
As well as researching potential new career avenues and gaining relevant work experience, you may need to gain new qualifications entirely. Not only will this take up time, but it may also require money, especially if you need to re-enter education and give up your current job (or at least reduce your working hours) as a result.
Should you have a significant amount of savings to use, things will be a lot easier. But without this, it can be difficult to finance a career change. Here are three options you could consider to help finance your career pivot and turn your dream job into a reality.
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1. Get a side hustle going
If you really can’t afford to give up your day job right now, then getting a side hustle going can help you finance your career change. ‘But how will I have enough time to commit to a side hustle and train for a new career?’ we hear you ask. Well, these gigs don’t have to take up a lot of time, and some can even be undertaken while you train.
For instance, if you have a spare room in your house, why not put it up on Airbnb, or get a lodger or exchange student in for the medium term? The government’s Rent a Room Scheme even lets you earn up to a threshold of £7,500 per year tax-free. Or instead, perhaps you could take up some pet or house sitting, or low effort endeavours such as transcribing, working as a personal shopper or cleaning houses. If you do have a bit of time on your hands, then the list of side hustles you could undertake is endless – from driving for a delivery company and selling services on Fiverr, to tutoring over Skype and participating in marketing focus groups.
2. Streamline your spending
A great way to better understand your spending habits is to create a budget. This will tell you your outgoings each month and what exactly you spend your money on. Doing so will enable you to figure out where you might be overspending and the opportunities you have to save money.
For instance, it could show you that maybe it’s time to cut back on those daily coffees from Starbucks and start making your own instead, or cancel those unused subscriptions, whether it’s for a magazine, Netflix, or something else.
For an extra helping hand streamlining your spending, we recommend that you download one of the numerous budgeting apps available, many of which are free. Take Chip, for example, which links to your bank account and analyses your spending to work out how much you can afford without impacting what you buy. It will also automatically move money it believes you can save into a savings account, though you are able to amend or cancel this.
3. Borrow the money you need
Another way of getting the money you need is to borrow it. If you are thinking about going down this route, it’s important to carefully consider the cost of interest on repayments and the consequences of not making them on time.
Asking a friend or family member for a helping hand avoids these issues. If you can’t borrow from a loved one, you’re looking at getting a personal loan from a bank, using a peer-to-peer lending service or borrowing from a financing company.
If you own a property, applying for a homeowner loan could be the perfect way of funding your career move, with lenders offering between £10,000 and £1,000,000. Homeowner loans work by letting you borrow a lump sum of money that is secured against your home. This means that your home is used as collateral so that, should you fail to make the required repayments, the lender is able to recoup any losses by selling your home. As the lender has an added layer of security, they’re usually happier to lend you more money, offer you better rates or extend the repayment schedule to make things easier for you.
It’s important that you only consider a homeowner loan if you are certain you’ll be able to repay the loan. Otherwise, you risk losing your home. Try using Loan.co.uk’s homeowner loan calculator to see how much you could feasibly borrow and whether this is an appropriate option for you.
