Lots of times switching jobs is exciting. You may get to meet new people and learn some new skills. In addition, you might be glad to leave behind a job where there were ill feelings.
Changing jobs can mean working less hours or receiving a pay increase. It may also allow you to work closer to home.
Nevertheless, there are also times when making a job change can have negative consequences. Sometimes switching jobs can hurt your budget.
If circumstances at your current job are bad enough it may warrant a change in jobs. Of course, the switch may also be prompted by your employer closing its doors or selling the business.
Regardless of the reason, making the switch can hurt you financially if the pay is lower. Fortunately there are a couple of things you can do to soften the blow to your budget.
For instance, if you know with enough advanced warning you can try to pay down some debt. This could alleviate some of the financial strain you will otherwise feel. Another idea is to take on a side hustle so you can make up for the lower pay.
Gap in Paychecks
You may also experience a gap in pay that can hurt your budget as well. It all depends on timing. The last paycheck from your current job and the first paycheck from the new one could leave a gap.
Should that happen you may have to dip into your emergency fund to keep your bills paid. Other options include planning ahead and asking for help from family or friends. Once you receive your first check you can pay the money back.
There are times a new job has different clothing requirements than your current one. Some have uniforms and others may simply be more professional than your last job.
Either way, this can affect your finances if you’re expected to foot the bill for the difference in attire. You should ask about this ahead of time if you are unsure of what to expect.
When you switch jobs you may end up with longer hours than before. Even if the pay is higher, switching jobs can hurt your budget.
Hiring out tasks you used to do yourself, such as housework, decreases the amount of the raise you actually received. You may also eat out more or increase your grocery budget by purchasing more processed foods to save time.
But you can find out how many hours you’ll be expected to work before accepting a job offer. Then, run some number to make sure the higher pay is worth the sacrifice.
If your new job has a farther commute than your previous one, switching jobs can hurt your budget. You may have to pay for more frequent gas fill-ups for your vehicle. Or, if you take a bus or train it may cost you more for the longer ride.
This is something to consider as you think about whether or not to change jobs. In fact, it may even make you hold out for a promotion rather than leave your current job.
Fewer benefits may also hurt your budget when you switch jobs. You may experience a reduction in sick pay which forces you to take unpaid leave occasionally.
Other considerations are a 401K, vacation days, life insurance, and health insurance to name but a few. Any of these, or other benefits, may be eliminated or reduced by your new employers. Be sure to ask about them for comparison purposed before accepting a job offer.
There are lots of things to look forward to when you begin a new job. But since switching jobs can hurt your budget you need to be prepared. Use the information and tips found here to ensure switching jobs is the right thing to do.
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
Have you ever switched jobs and found out you made a mistake by doing it?