Career Planning for 2010: The Fear Factor – Part 2 of 4

This week, we are discussing the impact of fears on career planning.  As socio-eco innovators (SEIs), finding job opportunities that align with our values and skills is sometimes less of an issue than finding the courage to move past our fears.  Your job might be eating you alive, but you remain in it, and might not even send your resume for consideration.  Why is that?  As mentioned in my previous post, I reviewed the evidence showing that professionals make career moves when their current pain is bigger than their fears:

Pain > Fears ==>  Career Move

My goal is of course not to increase your pain, but to help you lower your fears.  The posts in this series will give you information and resources to help you address some of the most common fears expressed by students and alumni I have been working with.  By articulating these common fears and what they mean to you, you might realize that making a career move might actually have more benefits (and might be less risky) than you previously anticipated.  Understanding what you need and want at work is the best way to articulate your own definition of career success and to take steps towards what career success means to you!

Fear #1:  There are no jobs! – See my take on this in part 1 of this series.

Fear #2:  How am I going to meet my financial obligations?

The purpose of work is to create value and receive an income (and often benefits) in return.  As SEIs, we are dedicated to create three types of value: economic value (which will generate our income), as well as social and environmental value.  When it comes to income, the more the better is the prevalent motto!  We all love to make money, but have you ever wondered what just enough would be in terms of your income?  When was the last time you truly evaluated your expenses and thought about what income range you would need to live comfortably?

For many of us, getting a good look at our finances is scary.  But by going through the process of dissociating your financial needs from your financial wants, your fear is likely to replaced by a sense of control.  Who knows, you might not need as much as you thought...  Wouldn't that be a great relief to know that you can have just enough?  Armed with this knowledge, you could certainly explore career options and compete for opportunities that align with your values more confidently!

Of course, there are cases, especially in the current economy, when you have to take a job so that you can pay the bills.  That is perfectly fine.  Evaluate your expenses and put a number on the minimum you need to meet your financial obligations.  This process will guide you to maybe slash some of your expenses, and prevent you from charging the latest gadget on your credit card.  Throughout this process, keep in mind Mark Albion’s words in ‘More than money’: ‘Keep your walking costs low’.  Indeed, the more you need financially, the least work options you have.

So channel your inner Suze Orman, and let’s get started by assessing your financial obligations:

  • Student loans:  Finding out how much you will have to pay per month is key – you can find free calculators online on CNN Money or bankrate.  For example, if you have $20,000 in student loans at 5% and you want that you want to pay back in 10 years, your monthly payment will be $200.
  • Other Debts: (car loans, credit card): Again, bankrate and CNN Money can be of help for you to add these costs to your budget.  For example, if you have $3,500 in credit card debt at 15%, paying $200 per month will enable you to pay your debt in just under 2 years.  Of course, this will only be the case if you don’t add any other charges to your card.
  • Housing:  If you are renting, add your monthly rent.  If you have a mortgage, add your monthly payments for your mortgage (and Home Equity Line of Credit if applicable).  This process is much easier for fixed rate mortgages.  If you have an adjustable rate, I would recommend that you calculate your future payments based on the worse case scenario (i.e. maximum possible rate increase).  This will enable you to meet your financial obligations in all cases, and feel good about saving some money if it turns out that your payments are less than what you had budgeted.   For a mortgage of $200,000 at 4.5% (30 year, fixed interest), your monthly payment will be $1014.
  • Other costs (insurance, real estate taxes, food, phone, cable, utilities, transportation, home maintenance, clothes and necessities for you and your kids):  These will vary depending on your situation.  If you are relocating, the CNN Money relocation calculator can help you get an estimate.
  • Retirement savings:  I would recommend that you look at your employer’s matching program and make sure to put as much in your retirement account as is needed to max out your employer's contribution.
  • Savings for emergency fund (8 months of costs):  Your goal is to have a cushion in case you lose your job, get sick, or have to face any financial emergency.

Seeing these numbers on paper will help you better understand what you need to meet your financial obligations.  When I go through this simple process with professionals, many realize that they need less than they thought.  Beyond your needs, you can also budget some of your financial wants.  These include activities and college savings for your kids, social events (e.g. dining out, movies, theater), the cost of stuff (e.g. clothes, designer shoes, home decor), and your hobbies (e.g. gym membership, painting course, spa day, travel).

Based on this information, you can now compute what salary range you will need to generate to meet your financial obligations and include some of your financial wants.  Being disciplined and having a good look at what you spend your money on is key to give you more fulfilling career options, and maybe make you less scared to make a career move!

Do you need more than you thought?  Do you and your spouse need to scale back to enable you to make a career move?  If you realize that you don't have enough now to meet your financial needs, the best course of action to take advantage of the free financial counseling services available through moneymanagement.org.  Adopting a disciplined approach to your finances is key to enable you to build a career that matches your interests, skills, and passions.

Having a good sense of where you stand financially is a great foundation for you to move forward with your career planning.

In future posts, we will focus on other fears such as:

Fear #3:  I have done this for so long, who will hire me for a different type of career?

Fear #4:  What will my family/spouse/friends/mentors say?

As always, my goal is simple:  Help you move past your fears, amplify your impact, and accelerate your learning as you build your career plan as a socio-eco innovator who does Business -  Better. I look forward to reading your comments and questions!

Photo Credit: MLM