Read Published Article

Who doesn't fantasize about a second career? Maybe you've always wanted to run away with the circus or make mouth-watering chocolates, or perhaps there something you've always wanted to do that's more rewarding and more meaningful.

Whatever your motivation for changing careers, you need to be pragmatic. For most people, a midcareer restart comes with a financial price tag, particularly if you don’t have the cushion of a partner’s income or a retirement or severance package. It might mean a sizable pay cut to pursue work in a more altruistic field, the costs of a start-up if you're launching your own business, a hefty tuition bill for more schooling, or a temporary loss of medical and retirement benefits.

Before you plunge into a second career, it pays to make a financial plan that will allow you to stick with your goals. If you’re likely to trade a good income for better work, first review your entire financial life, from everyday expenses to retirement funding and health insurance costs. Then consider some of these money moves:

Chart a budget. If you’re going to be living on less, you probably need to trim expenses. Get a clear sense of your income, debts, and savings. If you don’t already have a monthly savings system, start one. Track your spending and ask what luxuries you can do without: Restaurants? Dry cleaning? Vacations? It’s smart to have a cushion of up to six months of living expenses set aside for transition costs, as well as unexpected emergencies.

Downsize. Depending on the real estate market where you live, it might make sense to move to a smaller home or even relocate to a cheaper area. You might refinance your mortgage. 

Get out of debt. If possible, pay off outstanding high-interest credit card debts, college loans, and auto loans. This can take some time, but starting a new venture with as clean a balance sheet as you can will make a difference.