The most important part of my career transition plan was the financial plan. As I mentioned in part 1 at that time, there were 2 incomes in the household. In most cases that would have been a good thing however we had become accustom to living on 2 incomes…. Now that I would be going to school full time, we would need to scale way back. We had often talked of living on one income but never actually implemented a plan. Sometimes you are forced to do things that should’ve been done earlier.
Full transparency here, my job at the time offered a severance package that would allow me to receive part of my income and pay for 2 years of school. I know you are thinking well that should’ve been an easy transition. Yes, it should’ve been.
The first step was to take a full assessment of the current finances. While there wasn’t necessarily an emergency fund built up, all financial obligations were current and there was some money set aside. The plan was to put my partial income up and live off of the other income. (I would receive my partial income annually.) Ideally a budget should’ve been created at this time to make sure that financially we stayed on track, but of course a written budget wasn’t established. There was a plan, just not written.
At first everything was going ok, obligations were being taken care of, we were invested in the stock market and we were still able to enjoy a few “wants” every now and then. Then the stock market started taking a turn, you can imagine what started to happen next. On one of the investments margin calls started to come in. (For those not familiar Margins are a loan used for trading. So when the stock starts to take a turn brokers start requiring additional money to bring the account up to the minimum maintenance standards.) At the time I was in charge of the finances and tried to manage through without communicating what was going on. I was taking care of the margin calls using the savings AND I started using credit cards to cover expenses. BIG MISTAKE! Hind sight is 20/20 there were several things that I could’ve done to avoid or lessen the impact (communicate what was going on so we could’ve come up with a plan) but I thought things would turn around once I finished school and started my new career. At the time the bottom really started to fall out, I was close to graduation.
When I graduated, my first priority was to land a position as soon as possible to help relieve the financial stress. In part 3, I will share how I landed my first position in Finance.
Stay tuned for Part 3- Entry into the Finance World