7 Financial Planning Strategies for Your Own ‘Great Resignation’
Anyone itching for a career change is in good company right now, but they need to think a few things through before taking the leap.


Making a career change can affect your financial planning strategies. It is critical to plan and prepare for how this change might affect you and your finances.
Besides considering the potential of your new career and the education or training you may need, you must carefully analyze your budget, savings, health insurance and retirement goals before committing to such a significant life change.
If you are one of the many people considering a career change during this wave of the Great Resignation, a CFP® professional can help you plan for the change and smoothly transition to the next phase of your life.
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1. Be honest about why you want to change careers
Take an honest look at why you want to make such a magnificent change in your life before making the jump. Ask yourself:
- Do you have a passion for another industry or type of career?
- Are you dissatisfied with your current work environment? Is it too stressful? Toxic company culture? Intolerable boss or management?
- Are you seeking a higher-paying profession?
- Do you want an improved lifestyle, such as a shorter commute or more time for yourself and your family?
Figuring out the “why” before making a significant career change can help you target the right industry, types of employers and roles in your job search.
2. Look for ways to pivot
Depending on the type of change you’re after, you may be able to take a new opportunity for a test-drive by pivoting. Before diving in, brainstorm options to pivot your career:
- Can you change your current situation without changing jobs?
- Does changing careers involve starting a small business or becoming self-employed?
You can make a low-risk transition by going part-time with your current career to work on your new job simultaneously, taking night or weekend classes, and seeking advice from people who have made similar career changes. This way, you’ll have time to explore whether you like your new career while having the safety net of staying at your current job.
3. Scrutinize your budget
When the cash is steady, you may confuse your “wants” with your “needs.” However, it is critical to focus on needs and reduce spending on desires when changing careers.
If you haven't looked at your budget in a while, take a financial inventory — tally up your net worth and identify cash you can quickly access. Consider essential spending, like your mortgage or rent payment, versus things you can cancel or stop doing to save money.
Determine which subscriptions and other recurring costs you can cancel or downgrade. For example, if your credit card charges an annual fee, ask to switch to a card without a fee. Reduce your food bills by learning to cook or meal prep at home. Take advantage of online classifieds to sell unnecessary items taking up space or buy things you need at a discount.
While you reduce costs, set aside the money you save in a savings account. Creating a financial safety net gives you choices. Plus, it’s easier to make decisions based on what you want out of life and not what brings in money to pay this month's bills.
4. Make a plan for health insurance
According to an analysis of the Census Bureau's American Community Survey by the Kaiser Family Foundation, nearly half of all Americans get health insurance coverage from their employer.
If you fall into that category, make a plan for health insurance to fill the gap until your new employer’s coverage begins. You may have the option to continue your coverage through COBRA, get covered under your partner’s plan, or find a policy on the health insurance marketplace at Healthcare.gov.
5. Leave your retirement accounts alone
While raiding your 401(k) to fund a new business or career is tempting, it can hurt you. Early withdrawals trigger a 10% early distribution penalty if you are younger than 59½. You’ll also pay income tax on the money you take out.
But most importantly, withdrawing your retirement accounts hinders your ability to fund your retirement. When you take out your 401(k) prematurely, you lose the compound interest and stock growth you would have earned.
6. Earn new credentials
Many people changing careers opt to go back to school for certifications or another degree. New training and credentials can boost your job options and give you a leg-up when applying for new roles. But first, consider if you:
- Need money to finance those expenses?
- Have enough savings? How long can your savings cover you until they are depleted?
- Can live off your partner’s income while you retrain for a new career?
- Can qualify for scholarships or special programs for experienced workers?
Education isn’t always necessary to change careers. You might find a way to skip the expense, network with other professionals, and land a job you love.
7. Prepare to re-enter the job market
If you took time off to re-educate yourself for your new career, consider your job prospects once you complete your education.
You may need to take an entry-level job to start. When switching careers, some fields may let you shift to a similar level to the one you had in your previous job, but some don’t. For example, doctors, nurse practitioners and other health care providers may require you to first start as an intern.
Saving money upfront for a job change can help to supplement a lower starting salary. But long term, your new career may have stronger growth potential.
Think through potential scenarios, income sources and expenses when planning a career change. Changing careers can lead to financial insecurity if you do not plan properly. A CFP® professional can help you prepare and plan for a career change. Besides these seven strategies, they can uncover additional ideas to consider based on your circumstances.
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Marguerita M. Cheng is the Chief Executive Officer at Blue Ocean Global Wealth. She is a CFP® professional, a Chartered Retirement Planning Counselor℠ and a Retirement Income Certified Professional. She helps educate the public, policymakers and media about the benefits of competent, ethical financial planning.
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