Breaking Out of a Rut Without Going Broke: Financial Tips for Career Transitioning

I've recently come to realize I've lost something I've had my whole life. Something that some, if not all, people never have. Direction. I didn't really appreciate it until it was no longer there, like most important things in life. For me, it is science. Science has been an inevitable, magnetic pull as far back as I can remember. I never even hesitated when people asked "What do you want to be?" or "What will you major in?". Biology of course. There are other things you can study and do? Who knew.

Biology in action.

Therefore, my whole life thus far has been laser-beam-focused on science. And I've certainly achieved my objective. From four different lab internships throughout undergrad, to a published masters thesis, to a PhD candidate position on a top medical campus, I'd say in terms of 'doing science' I have succeeded so far. 

Problem is, one day I realized that magnet was getting weaker. And I fought it, I tried to re-focus, to think about it differently. But it faded away like a sunset, leaving the darkness of confusion in its wake. That thing which defined me, drove me, inspired me, now there is no pull. There is no sense of purpose, no goal to strive for. Now what? 

I'm very fortunate that my parents taught me how to manage money from a young age. I started my first savings account at 13 with my meager allowance. I had many a lemonade stand and bake sale, and had a sort-of job by 15. My dad made me a deal to pay for half of my first car, and by the time I had my license in hand, I'd paid cash for a cute little green Saturn. Throughout college and my masters degree, I worked two jobs to cover rent, food, gas, and books. My test scores had rewarded me with a full tuition scholarship. Because of this life-long money awareness, I made it out of six years of school with less than 1/3 the average debt. 

I will be forever grateful to my parents for those lessons in frugality and saving.

Those lessons are ones I continue to apply every day in my life. My savings account is by no means impressive, but it would be enough at this point to allow me to be unemployed for about 5 months without changing my lifestyle one bit. If I cut back dramatically I could probably stretch that to 8 or 9 months. That is such a peace of mind when looking at a possible huge life change, like a major career transition. 

As if the thought of not having a job weren't stressful enough, I just think how much worse it would be if I literally needed that paycheck to pay my necessary bills. And I know a lot of people are currently in, will soon be, or have been in that exact situation, and my heart goes out to you. If you are, or think you may be in a career transition situation, I have a few pieces of advice you should consider now to make it easier when that day comes.

1. Pay yourself first.

This is the most important rule of money. You pay your landlord rent, you pay the dealer for your car, you pay the grocery store for your food, you pay Uncle Sam his taxes. Why would you not pay yourself? After all, you are the one doing the hard work at whatever your job is to bring that paycheck home. Statistics from December 2013 reveal that 40% of Americans are not saving for retirement, while 25% have no savings at all. That is a very scary thing. And when you pay all the required bills, there is not much left over for silly things like, say, food and gas. I understand. But that's why it's imperative you save 10% first. 

Use automatic transfers to make it easier. On the first of the month, just take 10% of your paycheck, whether that is $10 or $1000, and transfer it into a savings account. It may be slow, but over time it will build. And you will find that you can still make it to the end of the month. Maybe you will have to cut out a trip to the store, or a movie night. But think how much better you will sleep at night when there is a cushion of cash you can call your own.

2. Scale back on non-necessities.

If you know for a fact that a period of transition is coming up, scaling back on your lifestyle can make a huge difference between being comfortable and feeling squeezed. If you know you will be transitioning to a different field, might be unemployed for a few months, or will have to take a lower paid position, try to estimate how your income will change and start living off that lower amount now. Save the difference. 

Maybe cut back on eating out, going to happy hours, or buy fewer groceries, and stop smoking now. Find ways to minimize the cost of things you like to do. Go to a matinee on Saturday instead of a Friday night if you like theaters. Have a potluck game night with friends rather than going clubbing. $30 in booze goes a lot farther at home than in a club.

3. Make a budget and stick to it.

The first step here is to figure out how much you are currently spending. For one month, track every cent that leaves your accounts. You can do this by hand, or try using an online tracking tool like You Need a Budget or Mint.com. The next step is to figure out how much you want to or should be spending in these categories. Things like rent/mortgage, car or loan payments, and utilities are rather concrete. Focus on categories you have control over, such as entertainment, hobbies, gas, and groceries. Find more great tips in How to Make & Stick to a Budget.

4. Learn to cook, and cook at home the majority of the time.

Eating out can cost $5-$15 for lunch and $10-$20 or more per person for dinner. If you have lunch with co-workers every day, and dinner at a restaurant 2-4 times per week, that is a significant expense. It will save you hundreds per year if you cook your own meals at home. Obviously I am a huge proponent of learning to cook! 

In the archives here you should find plenty of simple, cheap meals as inspiration, and the internet has seriously infinite ideas. Even just picking up a loaf of bread, peanut butter, and jelly will give you two week's worth of lunches for less than you probably spend in one day eating out. If you don't think you have time to cook, check out my 10 Minute Chili Mac, Fancy Ramen Soup, or Easy Steak Stir-fry. For even more tips on getting your grocery bill as low as it can go, check out How to Save Money on Your Grocery Bill.

5. Find frugal entertainment & frugal friends.

 

If your social circle is based on events where you are pressured into spending money, then you need to start branching out. Big trips, buying toys like boats and golf clubs, and going out drinking can cost you big bucks. Try new hobbies that don't require money, like taking up jogging or walking, join a book club, hike, start a garden, or find a local sport club. You could entertain yourself with a visit to the park, your local museums, or volunteering. Help Habitat for Humanity, your local church or soup kitchen, or go to Volunteer Match to find something that fits your interests in your area. You can get involved in your community, help people, and meet new friends along the way.


More ideas on cheap/free hobbies:
23 Fulfilling Hobbies You Can Start Right Now from Thought Catalog
The Only Thing You'll Need to Spend is Time from The Simple Dollar
100 Cheap Hobbies - Spend Time Not Money from Free in 10 Years 
The 35 Best Ways to Spend Your Free Time (Frugally) from WiseBread  

Job transitioning articles:
When Your Dream Job Disappoints, How to Find Plan B from The Wall Street Journal
Don't Burn Bridges: 10 Ways to Maximize a Job Transition from Monster Working
Transitioning From One Job to Another from Business Insider
Advice for People who Want to Quit Their Jobs from Thought Catalog


This post began with the intent of giving tips for making a career transition easier, but these tips are applicable to any stage of life. If you start incorporating these ideas into your daily life, you will notice your bank balances going up, maybe your debts going down, and your worries starting to ease. You may even find a whole new world of things you didn't know existed, and make new life-long friends.

Though a career transition is scary, being prepared can help make it easier. The more you have saved, and the fewer your bills and expenses, the more comfortable you will feel financially. Then you can focus on perfecting that resume, building your network, and polishing your interview skills instead. I have no idea where I will go from here, but I know that having some money in the bank and minimal expenses makes it a lot less scary to not know.



Have you ever transitioned between careers? What advice do you have?

How to: Set up an online bank account

Most people by now are in the online banking game. Technology has enabled deposits, transfers, and account balance checks at our fingertips for a long time. However, for those who have never done so, setting up an online bank account can be quite intimidating. It is scary to think that with a few clicks and some personal info that you can send money zooming about the inter-webs. But it is true. Setting up online banking is quick and relatively painless, and can be such a financial lifesaver. Especially when combined with mobile banking, you will never have to worry about a bounced check, declined card, mystery charge, late fees, or too-late-to-deposit check again. Well, maybe you can worry about those things, but you will have less of an excuse.

How to choose a bank

Your first step will be to choose a bank to work with. This depends on many factors, including what you will be using the account for, what banks are near you or if you don’t care about brick-and-mortar locations, if you will need a checkbook or card attached to the account, how much of a balance you intend to carry, etc. If all you want is somewhere to put a smallish chunk of change where you can’t spend it and watch it grow, an online provider is a safe bet. They don’t have physical locations, saving them money and allowing them to offer a slightly higher than average rate of return. CapitalOne360 (which acquired ING) is a great way to go, and they are always offering deals and promos. You can choose to have a checkbook or credit/debit card linked to the account as well. Ally is another top “branch-free” bank offering savings, checkings, loans and CDs. While no bank is perfect or 100% guarateed ‘safe’, both these providers are FDIC insured.

Online banking requirements

To sign up with an online only bank will require:

--You choose which type of account you wish to open (savings, checking, IRA, CD, money market, etc. Read the details on the bank’s website for % APR, etc or call the help number on the website to be sure you understand all terms and conditions.)

--Your social security number (and any others if you will not be only person on the account)

--A current mailing address, NOT a PO box

--A valid e-mail address

--Various personal verification data such as date of birth, mother’s maiden name, etc.

--Usually requires an opening deposit (bank rules vary as to whether or not there is a minimum) which can be linked from another account or a check you deposit

Of course, if you already belong to a traditional bank, setting up online banking is a great next step. Not only will you save trees and stamps by switching to electronic statements, you may also get some sort of reward from the bank for doing it, like a lower credit interest rate or no checking account fees. Check with your local branch to see if they have any promotions for going sans paper. Most banks you can simply go to their website and somewhere will be a button to set up online banking for your current account(s). If you have problems stop in a branch or call their help line. It is the same basic process for online only banks, but you will need your account number to link current open accounts.

Should I get a rewards card?

Once you have online banking set up, you can view account balances, set up automatic transfers or payments, link a line of credit for overdraft protection, and so much more. It may seem overwhelming to consider all the various banks and rewards policies out there, but if you don’t already, you should consider getting a card with some sort of reward system. If you feel lost, just starting with something is better than nothing. You can switch cards or banks or reward systems at any time, but you can never get back the 20,000 miles or $500 bonus cash you would have earned with last year’s regular purchases.

What about mobile banking?

If you have a smartphone, you could definitely benefit from enrolling in mobile banking as well. Most larger banks already offer apps to take care of banking needs on the go. You can deposit checks with a click of the camera, check balances, make payments, and transfer money, all while rushing to catch the 5:15 bus, dropping off the kids, heading to happy hour or picking up a rotisserie chicken on the way home. And with no fees associated (yet) there is no reason to not have mobile banking.

Photo from MindFieldLive

So whether you just want a quiet place for a nest egg to grow, to stash your vacation fund until cruise tickets go on sale, to hide some ‘fun money’ from a spouse, or to have a free checkbook delivered to your door, online accounts are the way to go. Just be sure to pick a password you can remember! {Look for my upcoming post on internet safety and creating creative passwords!}

Do you bank online?

How to: Save money on your grocery bill

Groceries are a fact of life. Unless you are one of a VERY small minority, you do not raise and/or grow all the food you eat. Also I'm sure there are people out there who never cook their own food, but rely on take-out and fast food for daily nutrition. That blows my mind of course, because I find such joy in cooking, creating, and enjoying homemade meals. 

There aren't many things more exciting to me than to bring home a big load of groceries for less than I intended to spend. Every time I go grocery shopping, I have a certain number in my head that I am allowing myself to spend. If I get everything I need for the week for less than that number, I am excited. If I go over that number, I just know I need to plan better, or have better impulse control, next time. 

My plan of attack when it comes to grocery shopping is always the same. It comes down to:

1. Knowing what you use most often

2. Paying attention to sales & in-season produce

3. Price comparing between a few stores

4. Buying generic or store brands

5. Making a budget and sticking to it

Know what you use most often

To know what you use most often, simply pay attention to what you run out of the most. What types of foods do you and/or your family want to eat often? Do you make a lot of pasta? Maybe cereal disappears within a day. Is there a tradition in the family like Taco Tuesdays? Noticing what you use often will help you plan around sales and stock up on staples. What I use most hasn't changed much over the past few years: rice, canned diced tomatoes, canned beans, frozen mixed vegetables. These things make up the bulk of my weekly diet. I don't know that I've ever gone a week without eating each of those things somehow.

Pay attention to sales & in-season produce

Sprouts Farmers Market is a place I go often because of their amazingly cheap produce. I get weekly salad greens, fresh fruits and vegetables there. Most staple items like bread, tortillas, canned goods, etc, comes from King Sooper or somewhere else. Which reminds me, if there is something or certain kinds of food you need a specialty store for, keep them in your rotation of ads to watch.

All this produce was under $30! And most of that is just their everyday low prices, not bargain sales. However, most grocery stores will greatly discount whatever produce is in season, because they have a lot of it and it needs to sell before it goes bad. Pay attention to what is in season, and maybe try a new fruit or vegetable you've never had that's on sale. You may have found a cheap new favorite!

Price compare between stores

Every week I get ads from at least seven different stores. I have a few favorites that I pick out, the others I discard because they are too far from me or for some other reason I don't shop there. Typically Sprouts Farmers Market, King Soopers, and Albertson's ads get saved and looked through.

I will sit down and look through each ad quickly, circling items which I know are a good deal, or which I use often and are on sale. Then I compare amongst the three which has more deals that week. Sometimes I will go to all three if the deals are worth it, usually I end up going to only one or two with the most things I want to buy. 

When there is a really good sale, I mean one that you only see once or twice a year, I will stock up. For example Albertson's sometimes has "buy one get two free" sales on meats, or King Soopers often has 10 for $10 sales. I know how quickly I go through my pantry items, so if kidney beans are 50 cents, I will be bringing at least a dozen home. Because they usually are 69 cents, which saves me 19 cents per can. That may not sound like much, but it's little things like that, added up over years, that makes a big difference in bank account balances. 

Buy generic or store brands

If you are a loyal brand-centric consumer and you don't trust generics, start small. Try the store brand of flour, or salt, and cook with it. When you can't tell the difference, try some granola bars or oatmeal. Pretty soon you will see what items you can't tell the brand name from generic and which items are really different in quality. By this point, the things I refuse to buy generic I could probably count on one hand, because there just isn't enough of a difference in quality for me to justify the price difference. And that saves me hundreds every year!

Make a budget & stick to it

As mentioned earlier, I look at a budget as a game. It is a number I set in my head, based on how much I think I'll buy, that I try to beat. If I find some deal or coupon that brings down my total, I have a better chance of winning. If I plan and price compare, I have a better chance of winning. The lower the total at the register, the higher the total in my checking account!

You can read more in my earlier article on making a budget & sticking to it, which includes how to add in all the things you spend money on monthly, not just food.


I have read tons of articles that advocate for making a weekly or monthly meal plan, stressing those items on sale that week, and then buying only those things you need to complete the plan. I am not quite that organized to pull that off yet. Instead, I have a rotation of meals that I know I love and can make quickly, which all use the same basic ingredients. Then I add in a few meals I've found recently that I want to try making, or if there is an event coming up, I'll add any items I need for those things to the list. 

If I'm feeling extra over-achieving, I will even split the list into types, like "dairy", "carbs", "produce", etc.  to make navigating the store easier. But if I don't get around to it, I don't beat myself up. And almost every week for several months, I get more than enough groceries for under $100. I'm sure I could pare that down to half or less, but I also enjoy cooking new and more expensive foods now and then, and experimenting with things for this blog. 


Anyhow, if you normally only grocery shop when there's nothing left in the house but a can of spaghetti-os and some green sour cream, try these simple steps. Check around and price compare, make a list before you go, then pick up only those things on the list. Short, sweet, and you can be sure you're saving yourself some cash. You can look over those grocery receipts and smile.

How often do you shop for food?

How to make & stick to a budget

How to make a budget

Part of any healthy financial plan, a budget is a critical tool to help you find out and control where your money is coming from and more importantly where it is going. Many people cringe as soon as they hear the word "budget" because they think that means never having fun ever again, which is simply untrue. The beauty of a budget is that YOU are in charge of it. You call all the shots, from what categories there are to the amounts allocated to each. And they can be amended as your life situation changes to allow for schooling, a raise, a job loss, a move, a marriage, a baby, a divorce, etc. 

So how does one go about creating a budget? 

Your first step should be sitting down with a pen and piece of paper, or a Word or Excel document, and writing down every single thing on which you spend money on a daily, weekly, monthly, or yearly basis. Include housing (rent/mortgage/taxes), transportation (bus pass/gas/parking), food (groceries/dining out/coffee shops), and entertainment (movies/books/games/hobbies/vacations), as well as any other special categories you might need (children's activities/debt repayment/investments). 

Your next step is to either: a. keep track for a month to see what level of spending is in each category, b. use an online tracker such as Mint.com to track spending, or c. estimate the amount spent each month. This is your total spending. Now estimate or calculate your income each month. This can include paychecks, investment dividends, interest on savings, gifts from relatives, inheritance, side jobs, etc. This is your total income.

Your goal: Make the difference between your income and your spending as large & positive as possible

This is the "spending gap", as covered in several great articles (Minding The Gap & The Gap Matters More Than Anything) by Trent from The Simple Dollar. You can increase your gap by either spending less or earning more, or ideally doing both. The larger your gap, the more room you have to pay down debt, invest, and sock away savings, and the less stressed you will be. 

Let's look at an example:

In the scenario on the left, the person in question makes about $54,000 a year (take-home of $4,500 a month) plus some extra from interest (assuming there are investments). The smart thing to do would be to re-invest that interest each month, thus adding to the principal amount invested and increasing the amount of interest. 

Anywho, that adds up to $4,750 coming in each month. This person also appears to have a rather nice home and car, as well as a lively social life, causing spending to total $2,450 per month. Even at this spending level, this person's "gap" is a healthy $2,300 per month. They could use this to pay off debt like cards or loans, save for retirement, pad an emergency fund, or take a nice vacation.

On the other hand, the person on the right makes about $26,400 per year, and has no income other than their paycheck, which is $2,200 per month. While they have a lower housing payment, they have the same social and entertainment level as the person with a higher income, leading to a tiny "gap" of only $50 per month. 

The best way to approach this, with the intention of increasing the gap, is to consciously choose a number smaller than the current spending level. If you then hold yourself to those smaller numbers, you will naturally see your spending gap widen in your favor. 

If, for example, the person on the right were to move to a smaller housing situation or obtain a roommate, drive a smaller or older car, save money on groceries and eating out, decrease shopping and eliminate unnecessary spending like going out to the movies, the gap can widen to as much as $1,150 per month! That can become a nice savings account to eventually full-out buy a nicer car, a house of their own, make a job transition, or whatever dreams are yet to be fulfilled.

How to stick to a budget

Once you decide on the amount you want to spend per month on a certain category, now all you have to do is hold yourself to it. Easy right? Not so much when you're new to budgeting. Or really at any point in your life. You see, we all have a tendency to get used to whatever lifestyle we currently lead. Our "wants" will always greatly outnumber our "needs", and that leads to lifestyle inflation. That means when your income increases, you can fulfill more wants, so you expect a nicer lifestyle. Investopedia explains how this keeps us in the "rat race", working just to pay the bills. 

This more expensive lifestyle then becomes the new normal. Inexpensive or free activities aren't as appealing because it seems "beneath" you since you have such a nice way of living. Unfortunately things happen which may decrease your income, but will not decrease your expectations. It is also more difficult to save and get ahead financially. The Simple Dollar also has a great article about Avoiding Lifestyle Inflation.

There are several ways you can avoid the temptation of lifestyle inflation. 

1. If you get a raise, pretend like you didn't by putting that money straight into a savings or retirement account. If you don't know it's there, you can't spend it.
2. Do NOT take on unnecessary debt. Just because you make more doesn't justify a huge loan for the newest car out there or a bigger house or more credit cards or whatever.
3. Forget about the Joneses. What other people have doesn't matter, there will always be people with more money and things than you. Focus on your life, your relationships, and the things that bring you joy.
4. Continue finding free and inexpensive activities that fulfill you. Teach, tutor, volunteer, read, or go for walks. Enjoy the simple things in life.

For more ideas see YahooFinance, GetRichSlowly, or FabandFru. 

The single best tip I can give you on sticking to a budget is to automate as much as possible. If 10% of your paycheck goes straight to a savings account minutes after it is deposited, you don't have a chance to spend it at the mall. If you have accounts set up for grocery spending or entertainment and put only the amount you want to spend, then you can only spend as much as is in the account. This takes a lot of the work out of budgeting, and makes you accountable. Just be sure to keep an eye on amounts and balances every month.

How to save money

Another problem people have with budgeting is not being able to "find" any extra money to cover the bills, savings, investments, as well as social fun. A lot of people view being frugal as the same thing as being cheap or miserly. This is not necessarily the case. You can still have a vibrant social life and enjoy leisure activities without spending large amounts of money every month. And many easy tips that save you money over the long haul don't even make a noticeable impact on your daily life. 

You don't have to go to the extremes of making your own laundry soap, living with a 55 degree home in the winter and 85 in the summer, or eating wild flowers to supplement your diet if you don't want to. There are boatloads of frugal money-saving tips, and of course each one will not work for every person. You need to evaluate each tip according to your needs and lifestyle, try a few out, and keep only the ones that work for you. 

My favorite way to save money is on food of course. I combine many different techniques to keep my grocery bill as low as possible. For starters, I very rarely eat out. Nearly every breakfast, lunch, dinner, and snack is made by me in my home. This saves me a TON of money yearly. Say I got lunch at work each day, for an average of $8 per day. $8 x 5 days per week x 48 weeks per year = $1,920! Nearly $2,000. That's 2 1/2 months of rent for me, or 7 1/2 months of car payment, or 10 months groceries. By making my own meals, I save that amount and put it towards savings, retirement, and other goals. 

I shop what's on sale at the store, I stock on up frequently used items if there's a good deal, I buy in bulk when I can, I pay attention to "per unit" prices, etc. I also take the bus to work in warmer months (I'm a student and we get a free bus pass, saving me $36/month), I insulated my apartment windows so the heating bill is lower, I buy clothes at Goodwill and consignment stores, and so on. 

For more great tips on daily money saving strategies:

America Saves - 54 Ways to Save Money
Daily Finance - 5 Tips for Frugal Living That Won't Leave You Feeling Miserable
How Stuff Works - 5 No-Brainer Money-Saving Tips Everyone Forgets
Learnvest - 9 Frugal-Living Tips from the Great Depression
Little House Living - Frugal Tips
Living Frugal Tips website and Savings category
The Simple Dollar - Little Steps: 100 Great Tips for Saving Money for Those Just Getting Started
US News - 8 Painless Ways to Save Money
zenhabits - The Cheapskate Guide: 50 Tips for Frugal Living

What's your favorite frugal tip?