Over the past few weeks I’ve been talking with a family who is trying to figure out the timing for transitioning both the husband’s work and a new home reflecting a different lifestyle for everyone. The husband’s family business has become an increasingly emotional and draining burden and he wants to find a new endeavor that will be more satisfying and still support the family finances as well. The change in housing also reflects this desire and a plan to downsize somewhat to save more money toward the upcoming college educations. So, what factors do you need to consider for each of these – and how do you try to balance and intertwine both together?
For any voluntary career change, you need to start doing your homework and plan out a transition time and process. Making sure you have some savings set aside for reserves and interim cash flow is a big consideration. Lining up appropriate health, life and disability insurances is also key. But networking and ‘reality testing’ your business plan is probably the most important factor…it’s fun to dream about a new venture but making sure you are taking a calculated risk and are stacking the deck in your favor is the way to give yourself the best chance at real success.
On the housing front, you’ll need to take some time to run your own numbers and see exactly how much you would be saving if you downsized – don’t forget about selling costs, realtor fees, moving costs, new escrow accounts, etc. If you dive in too early, you may find on the back end that you really haven’t saved very much on a monthly basis, and in fact may have also significantly decreased your cash reserves by the time the cash outlays settle. You’ll also need to make sure that the career change provides adequately for a mortgage application or other financing arrangement (income and earnings track record) for purchasing the new place. And planning out a packing and moving schedule on a calendar with assigned responsibilities for everyone can be a big help for using your time and energies as effectively and realistically as possible – all necessary to maintaining your sanity and perspective!
The overarching issue we talked about right up front, though, is to jointly articulate your top goals for both the family and each respective choice on the table. For example, stating that you all want to place family health and communications at the top of the list will help keep the numerous details in perspective and greatly lessen that chance that differences about house style or configuration, for example, will expand into personal arguments and judgments. And being able to identify a couple of top key factors (such as school district or travel distance of the new business from the new house) will help keep you focused on the must have’s, and minimize either ‘analysis paralysis’ or making choices on the fly out of tiredness or frustration.
Large transition decisions can be draining, so tend to your health and time frames on a regular basis. Periodic reassessments and tweaks will be more useful than either trying to set situations in stone or simply winging it. This is a prime time to reach out and get support from all your resources: colleagues, family members, professional advisors, and whomever else you need to tap. A well considered plan can lead to great results and rewards!