Preparing financially for a job search

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?

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Nick @ Millionaires Giving Money
Nick @ Millionaires Giving Money
5 years ago

I would personally spend some time of self reflection and this is where having a beefed up emergency fund helps. Through personal reflection I would consider all the industries that are growing and where I would have the greatest chance of progression and then concentrate on these areas within my remit. Great thought provoking post.

Beth
Beth
5 years ago

@GRS editors — you might want to look into what ads your site is serving up. I’m seeing “5000+ Thai women hope to meet serious men for love”. Thank you for the laugh this Monday morning! On a serious note, there are a lot of good tips in this article and a lot of them are things we should be doing even when we aren’t job hunting. For instance, take advantage of any opportunities for training at work to keep current at your job. (If you’re tech-minded, a month’s subscription to Lynda.com will teach you a lot). It’s easier to… Read more »

Beth
Beth
5 years ago
Reply to  Beth

Just to clarify, I don’t think the ad is funny — someone is getting exploited there — but I do find it amusing how Google ad servers will throw in random stuff.

Since I’ve come back, I’ve seen a few ads inviting me to invest in questionable real estate or investment deals. Time to turn on the ad blocker.

Ads
Ads
5 years ago
Reply to  Beth

The ads you are served are based off your internet history. They are very rarely “random”.

Beth2
Beth2
5 years ago
Reply to  Ads

Usually yes. (I didn’t get the Thai offer.) However, I get ads for things I haven’t the slightest interest in…and sometimes they are annoying — tho’ not as objectionable as the one noted above. Those are a form of trafficking and no joke.

Beth
Beth
5 years ago
Reply to  Ads

Yeah, I know how ad servers are supposed to work. You shop for shoes online, you get ads about shoes, you surf parenting websites, you get ads for diapers. If the ads were something I was actually interested in, I wouldn’t be calling B.S. on them now would I? 😉 Sometimes questionable — and illegal — stuff slips through the ad servers. If it was appearing on my website, I’d want to know. People see a real estate ad on a site like GRS and they might not realize it’s a scam automatically served up by an algorithm — they… Read more »

Emily @ Simple Cheap Mom
Emily @ Simple Cheap Mom
5 years ago

My husband is thinking of switching jobs, so our emergency fund is untouched, but I’ve been surprised at all the costs for updating the resume that I wasn’t expecting. I’m very fortunate that we’re not trying to cover these costs in addition to our living costs with no income coming in.

Beth2
Beth2
5 years ago

The costs of updating the resume surprise me. Not only are there lots of online and book resources to guide the process but lots of free help. My local library offers this service. ALso check with the state dept. of labor, as there may be some offerings from there. Seminars abound. Even headhunters help.

Patrick
Patrick
5 years ago

I can personally attest to the virtues of a beefy emergency fund during job transition.

I recently moved from an intern in Nebraska to a permanent position in Texas with the Corps of Engineers. My emergency fund helped cover the cost of travel to the interview (which was reimbursed) and all of the moving costs.

After getting settled in, my emergency fund was depleted, but I now have a secure job and a much MUCH better income to rebuild the fund.

Thanks for the great post! 🙂

Paul
Paul
5 years ago

Last year I was laid off. It was a bit of a surprise. We were lucky in that we had some savings to rely on as well as my military retirement. Fortunately it only took about four months to start a new job, but we did have to relocate, and ended up incurring some debt in the process. It took about six months to get rid of the new debt. My new job is tied to a contract that will end next summer, so I will be looking for work again. This time I know in advance what will be… Read more »

Brian @ Debt Discipline
Brian @ Debt Discipline
5 years ago

I think the e-fund is there you you unexpectedly lose your job. If making a transition you should be able to keep your current role while searching for a new one.

lmoot
lmoot
5 years ago

I prepare for job loss, job fatigue, job search by keeping a part time job. Since leaving my job of 5 years to spend this summer in Africa I’ve not only stayed out of my Efund, I’ve added nearly $3k to it. Because of my open availability I’ve been able to turn my weekend job into a nearly 40 hr week job (working 5 days per week). This income and the additional income from my rental property (which basically just covers the mortgage…but it helps!), has made it so that I can take my time only applying for jobs and… Read more »

stellamarina
stellamarina
5 years ago

Before you sign off with the old company, get all your dental cleaning and work done for the whole family while you have the insurance. Often new dental insurance takes a few months to kick in or maybe they will not have it at the new job.

LeRainDrop
LeRainDrop
5 years ago
Reply to  stellamarina

Yes, and refill all your prescriptions!

Erica W.
Erica W.
5 years ago

I was recently recruited for a new job, and much to my surprise, I took it. I wasn’t planning on leaving my job, but when this opportunity in the same field (human services) arose, I took it. The previous person in the position had been there for 26 years. There are very rarely openings for this type of position and there are very few agencies that do this type of work in the region. If I hadn’t taken the chance, I wouldn’t have had another chance like it. I would have still had a very good job, though. I know… Read more »

Beard Better
Beard Better
5 years ago

Oof, that that third one really hits home. I’m right in the middle of trying to either transfer to another school or find a job, and everything else has been suffering. I missed a day of writing on my own blog, I’ve bought dinner twice this week already, and I missed a workout in order to spend more time working on some grading that needed to be done before the holiday break. It’s a negative reinforcement cycle, but I’m just not sure how to more effectively plan for crunch times. It seems like everything is important and everything needs to… Read more »

Emma | iHELP Student Loans
Emma | iHELP Student Loans
5 years ago

It’s true – there ARE costs involved in a job search. Hopefully, they will pay off!

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