Align Your Financial Plan with Your Career Plan

As circumstances change, your ideas about what you want out of life, and from your job, change too. You may need to adjust your career plan to support your financial goals—and vice versa.

Career and financial planning is not something you do just once at the start of your career. It is a cycle that repeats over the course of your life.

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If you are looking for a job, considering a career change, or thinking about retirement, it’s a good time to take a fresh look at how your career and financial plans align.

Take stock of your current finances

The first question to ask yourself is “How much money do I need to earn?”

The answer depends on your needs, your goals, and how long you plan to work. If you are currently unemployed, you will also need to factor in the time it could take to find a new job.

To get a picture of your financial situation:

1. List your monthly sources of income and any other financial assets.
2. List your monthly expenses and other financial commitments. Don’t forget annual expenses such as insurance costs and property taxes.
3. Discuss any shortfalls with others who will be directly affected by changes in your budget. Ask them to help you make a list of possible ways to increase monthly income and reduce expenses.
4. If you will not be able to meet your financial obligations while you are unemployed, talk to a financial advisor or a not-for-profit debt counselling service such as Money Mentors. You may be able to consolidate your debts or take other steps to avoid serious financial problems.

Look into your financial future

Next, think about your longer-term financial future. Consider:

• At what age do you want to retire? Will your retirement income be enough to support you for the rest of your life?
• What are your long-term goals and needs? For example, do you dream of travelling when you retire? Will you need as big a home as you once did?
• How much money will you have to save each month to achieve your long-term goals, assuming you get a reasonable rate of return on your investments?
• What will you do if the rate of return on your investments is less than expected? Will you put off retirement? Might you have to go back to work after you retire?

Do some reading about retirement planning, talk to a financial advisor, or sign up for a pre-retirement seminar.

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Weigh your financial, career, and lifestyle goals

Once you have a good idea of your financial goals, consider how your career plan fits with those goals. Are you on track to meet both your financial needs and your work-life objectives?

You may find that your priorities have shifted since your last career transition. Perhaps money is less important to you than it once was. Or perhaps retiring as early as possible no longer seems appealing—and some extra income would come in handy.

Here are some questions you might ask yourself:

• If you were offered an ideal job, but at a lower salary than you are used to, would you accept?
• When you retire, will you miss things about paid employment other than the paycheque (such as a sense of accomplishment, opportunities to learn, or the social aspect of the job)?
• Do you expect to work at least part time during your retirement? If so, what type of work do you see yourself doing? Might you consider non-standard work arrangements, such as flexible hours or telework?

By reviewing your financial situation at different stages of your career, you will spend less time and energy worrying about money later on. Plus, you may have more financial options now than you will later.