Yearning to explore new horizons?
Before you jump ship, you should have a good idea how much it’ll cost you. Take a few minutes to estimate the financial impact of each item below. Some may come with a steep price, while others could boost your bank balance.
When you’ve finished, tally it all up. Your new prospect might look less appealing—or maybe even more enticing—once you’ve got a firm handle on the true cost of changing jobs.
Income: Will you be earning more or less at your new job? How much? Calculate the difference, and factor in any pay raise you’re likely to receive in the near future.
Keep in mind you won’t be receiving employment insurance benefits if you voluntarily leave your job without just cause. However, if you’re quitting because of harassment, discrimination or working conditions that endanger your health or safety, for example, you may be entitled to EI benefits all the same.
Transportation costs: Estimate your transportation expenses for both positions, based on the cost of your monthly transit pass or average car expenses multiplied by the number of kilometres traveled.
Insurance benefits: When you quit your job, you say goodbye to your benefits. Although purchasing your own insurance coverage (dental, drug, disability, etc.) is expensive, the cost of having no insurance can be even greater. Ask some insurers for estimates.
If you’re stepping right into another position, you’ll be covered. However, your coverage and premiums won’t be the same. Find out how the difference will affect your pocketbook.
Other benefits: You’ll lose other benefits when you quit too. Calculate the value of pension plans, employer RRSP contributions, stock options, parking, subsidized daycare, and all the other perks you now receive. Weigh them against what you’ll be getting in your new job, if you know.
Cost-of-living differences: This one can have a big impact on your lifestyle. Statistics Canada produces cost-of-living tables for selected metropolitan areas across the country. If you’re moving, check out how your new town compares to your old one.
Temporary loss of income: You may find yourself without any earnings while you look for work. Multiply the number of weeks you expect to be without pay by your current salary to calculate your lost earnings.
Bonuses: Are any bonuses coming your way? Try to time your departure so you won’t miss out. If you do, they should be added to the “Minus” column as well.
Vacation and sick leave: Departing employees are normally paid for banked vacation days. Similarly, many employees can cash out any remaining sick days in their bank. On the other hand, if you’ve taken vacation in advance you may end up reimbursing your employer. Find out where you stand.
Training: Will you need to go back to school to retrain for your new career? If so, add up the cost of tuition, books and fees. If you don’t plan to be working while you study, add your lost earnings to the total cost.
Job-hunting: Calculate any expenses you’ll incur looking for work. If you’re leaving town, include travel costs, meals and accommodations for at least two job-hunting trips, and budget for some long-distance calls.
House-hunting and moving: If your new employer isn’t paying your expenses, plan on two or three trips to look for a house (including travel, meals and accommodations) as well as temporary rent and moving expenses. Remember that moving costs are tax-deductible if your new home is at least 40 kilometres closer to your new workplace than your previous home.
Making the Call
Whether or not you decide to switch careers is a big decision, and costs are just one factor you have to consider. But do build up some savings, work out a detailed budget and line up a back-up source of income (like a spouse) before you quit. It’ll make the transition a whole lot easier.