Looking for a new job is a multi-faceted process. I've discussed many aspects of career-building that apply even if you are just trying to keep a job you already have. But laying the groundwork for a successful job search is about more than just your reputation. A job search can take months — in some cases, up to a year or more — so it is very important to be prepared financially before you start to look.
How to prepare financially for a job search
1: Beef up your emergency savings
To cover the gap between your last paycheck at your old job and your first paycheck at your new job, it is a good idea to beef up your savings. There are many reasons this could be the case: You may need to relocate for your new job, you may find it difficult to time your start and end dates, or you may be laid off or terminated before you can line something else up. These challenges can have a ripple effect on your finances.
For example, if your new job will require that you relocate, your significant other may also need to leave their current job. If you are the primary breadwinner in your family (or you are single) then having a gap in your income can have a major impact on your life. This is especially the case if you are living paycheck to paycheck.
If you can put three to six months' worth of expenses aside as an emergency fund, then missing a paycheck or two becomes a small price to pay for career advancement. In fact, at that point what you are talking about is less like an emergency fund. You might actually think of it as an opportunity fund that gives you the freedom to take advantage of lucky breaks.
With a healthy financial cushion in place, you may also feel that you have the freedom to take risks at your full-time job, be more willing to start your own business or take a job in a lower-paying industry that will give you a better quality of life. Ideally, of course, you will already have savings in place that can just be tapped for this purpose when necessary. However, if that isn't the case, you may want to make your emergency fund a priority while you still have a guaranteed income.
2: Prepare to spend on your job search
Another reason to have some money set aside is that the job search itself can cost money. Perhaps you need to ramp up your networking efforts and take some people out to lunch or happy hour. Maybe you decide to spring for a premium job-search service that requires a subscription or you believe that joining your college's alumni association would be advantageous.
There may also be industry-specific reasons you would have to spend some money before looking for a new job. Examples include obtaining a license or certification, or maybe even refreshing your knowledge base by taking a course in the latest computer program.
These tactics can help you compete effectively among all the other applicants, but they cost. Sometimes an employer will pay for these types of things once you are hired, but making sure your skill set is up to date may be what gets you the job in the first place.
And, of course, there are more mundane costs associated with job-hunting. Maybe your interview suit no longer fits or is woefully out of fashion. Sometimes a tailor is a cost-effective way to address the issue. Depending on your situation, however, something new (or new to you) may be required. Just be careful that you don't fall into the trap of buying clothes you will never wear.
In addition to these somewhat obvious expenses, there are other job-search costs that can add up when you are not paying attention — the extra gas you spend driving to and from interviews or dry cleaning that newly tailored suit, for example. These are all ways you can invest in your most important income-producing asset, but you have to put something in if you expect to get something out.
3: Remember that your energy is a finite resource
Searching for a new job is a lot of work. In fact, it can feel like … well, a job in and of itself. If you are looking for a new position on top of all your normal, everyday responsibilities at work and at home, it can easily become overwhelming. As a result, it is important to be cognizant of the fact that willpower isn't always enough.
What does this mean? You may find yourself watching brainless TV or heading for the drive-through more often than usual. You may make excuses to slack on chores or enforce household rules if you have children. Or you may find yourself resenting your partner or kids for not doing more to pick up the slack when you have been working so hard. Perhaps you find yourself buying things online that you don't want or need.
If you find yourself in this situation, the first thing to do is to take a deep breath. Then look for ways to break the stress spending cycle. The goal here is to make your life easier without spending money you can't afford. If you have a significant other or children old enough to pitch in, for example, have you explicitly asked them to take responsibility for certain chores? I know that sometimes I am guilty of not asking for what I need and then getting frustrated with the other person for not pitching in. That's silly.
Many famous writers have said something along the lines of “if you're experiencing writer's block, lower your standards,” and this can apply to other areas of life. If there isn't time for you to work your current job(s), look for a new job, keep your house perfectly clean and all your laundry done while cooking every meal from scratch, then ask yourself what absolutely needs to get done and what can wait. Especially in these days of social media, it's easy to not just compare yourself with the Joneses financially, but in all aspects of life. Pictures of clean houses and smiling children may pepper your feed, but ask yourself whether your friends and family are posting the pictures and status updates that are most representative of their lives or whether they are posting the highlights. Don't waste energy comparing the worst moments of your life to the best moments of someone else's.
How do you prepare financially for a job search?