9 March 2013

No job is for life

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no job is for life

 


In today’s workplace, it is highly probable that you will face at least one career change.  It might be a promotion within an existing organisation, a move to another industry or even loss of a job.

  

As people’s circumstances change so can their work choices, you may change from full time to part time or move from a salaried position to being self-employed.  Of course, not every move is planned – illness and redundancy can take you on a whole new trajectory.

Planned or not, a job change or an unexpected loss can be financially risky unless you are prepared.

For example, if you are facing a pay cut, you need to know that your new salary will still be enough to meet any debt obligations – such as a mortgage – and your overall lifestyle needs. If it does not, then you may need to revise your budget and expectations.

If your setback is only temporary and you are likely to be earning more down the track, then have a plan in place to do something beneficial with any wage increase. If you did not need the extra money when you were earning less, it might be useful to talk to a financial adviser about where to invest any extra pay to help meet your longer-term goals.

Promotions may generally be accompanied by weightier increased salaries, they can also mean more stress and travel, which may take its toll on your health and ability to stay in the position as long as you had planned.  Generally paid by a company, hidden costs like travel time or parking can quickly detract from the prospect of more money.

A high salary almost certainly means paying more tax and putting more money into superannuation – two areas where specialist knowledge can make a substantial difference to long-term goals.

Professional advisers can also help with decisions such as whether to spend a bonus on a holiday reduce the mortgage or put the money into superannuation.

Depending on how long you have been working, superannuation may well be your biggest financial asset. Just knowing how much you have put away and whether it is being invested with your retirement time-frame in mind, could make a difference to how long you continue in the workforce.

Working with a financial planner early – perhaps even before a change becomes inevitable – can help work establish long-term goals and how best to achieve them.

The author is an employee of Verante Financial Planning in Castle Hill, Corporate Authorised Representative of Magnitude Group Limited, Licence No 221557, Magnitude Group Limited ABN 54 086 266 202.

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