On average, people will change jobs 10 times during their lifetime. Whatever your reason for switching jobs—whether it be a desire for a new career path or the result of a downsizing effort—it can be a stressful time. If you find yourself at a career crossroad, the first thing you can do is take control of your finances. Related: How To Battle Your Financial Nemesis Here are some tips for managing your finances during a career transition...

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Often I find my clients focusing on only one aspect of money: their dissatisfaction of how much money they make. For example, one of my clients, a successful couple who make together around $150,000 a year (a significant amount to most) and yet they were feeling like this was not enough and they still needed to make more money. One of the reasons they felt they needed more money was because they had two children and the oldest had just started college. In addition, the second child was starting college the next year. They were in a bit of shock about all the unexpected costs. On top of the financial pressure they felt from college expenses, they had not seen any raises for several years because of the downturn in the economy. They were feeling a lot of financial stress and they could think of only one way out, which was to increase their paychecks. The husband had applied for a new position that would provide the increase in pay they both thought would solve all of their money issues. When the couple came to me for their regular financial review, I asked them what they thought this new job was going to cost them? They paused for a moment and said, "Probably just a few more hours of working time a week." I then asked if they had ever gone through an exercise that would calculate what those few more hours a week would really cost them. I further explained that it costs money to work, and sometimes it’s a lot more than just your time. So, it’s important to know your REAL hourly wage not what your paycheck says, not the one you think you’re worth... you want to know the real return on your investment of time. They both agreed they had never really looked at their pay this way and were willing to run through the exercise of calculating the "REAL Hourly Wage." The formula I use with my clients is the following: [Your Real Hourly Wage] = [Your Adjusted Income] ÷ [Your Adjusted Job Hours]

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Name: Ruth Cameron Website: www.newworldwealthconcepts.com Twitter: @rcamero45 LinkedIn: /in/ruthcameron Bio: Ruth Cameron has over 22 years’ experience in Corporate America; managing technical projects; designing processes; and developing and implementing business strategies. In her second act of life she has become a Financial Advisor so she can combine her entrepreneurial side with her passion for helping individuals, small business owners and families to create an inspiring financial strategy based on their values and goals. Ruth is a financial advisor with, and securities are offered through, LPL Financial Member SIPC (www.sipc.org). Ruth is registered to sell securities in the following states: CO, WA. Affiliations: Colorado Financial Partners LPL Financial Articles: The #1 Financial Mistake Career Changers Make 6 Tips to Managing Your Finances During a Career Transition Working Past Your Normal Retirement Age What is Your Job’s Real Hourly Wage?

The Great Recession has many older Americans considering the prospects of staying in the workforce past their normal retirement age. However, working past your normal retirement age is not a new necessity. According to the Social Security Administration, nearly 31% of individuals between the ages of 70 and 74 reported income from earnings in 2008, the latest year data are available. Among a younger age group, those between 65 and 69, approximately 48% had income from a job. Some remain employed for personal reasons, such as a desire for stimulation and social contact; others still want and need a regular paycheck. Whatever the reason, the decision to continue working into your senior may permit you to continue adding to your retirement savings and delay making withdrawals. For example, if you earn enough to forgo Social Security benefits until after your full retirement age, your eventual benefit will increase by between 5.5% and 8% per year for each year that you wait, depending on the year of your birth. You can determine your full retirement age at the Social Security Web site (www.ssa.gov) or by calling the Social Security Administration at 800-772-1213. Adding to Your Nest Egg Depending on the circumstances of your career, working could also enable you to continue adding to your retirement nest egg. If you have access to an employer-sponsored retirement plan, you may be able to contribute and continue building retirement assets. If not, consider whether you can fund an IRA. Just remember after age 70 1/2, you will be required to make withdrawals, known as required minimum distributions (RMDs), from traditional 401(k)s and traditional IRAs. However, RMDs are not required from Roth IRAs and Roth 401(k)s. Even if you do not have access to a retirement account, continuing to earn income may help you to delay tapping your personal assets for living expenses, which could help your portfolio last longer in the years to come. Whatever your decision, be sure to apply for Medicare at age 65. In certain circumstances, medical insurance might cost more if you delay your application. Work does not have to be a chore. You may find opportunities to work part-time, on a seasonal basis, or capitalize on a personal interest that you did not have time to pursue earlier in life. Source: Income of the Population 55 or Older, 2008, Social Security Administration (most current data available). Ruth Cameron, founder of New World Wealth Concepts- Financial Blog, has over 22 years’ experience in Corporate America; managing technical projects; designing processes; and developing and implementing business strategies. Working past retirement age image from Shutterstock

Mistake#1: Focusing on your income instead of your relationship with money. What I mean by your “relationship with money” is how you personally approach your economic activities like: how you earn money, how you spend it, save it or give it away – and the thoughts and feelings associated with those activities. What I find with my clients is they don’t feel in control of their relationship with money, because either they don’t understand how it developed or they never even thought about other ways of relating to money. Instead, they end up focusing on other areas of their lives. Your own approach may have made sense at one point, but now you are in a life transition and money often becomes the cause (or excuse) for people not living their dreams or exploring what their life could really mean. Taking a clear honest look at your current financial situation, and how you got there is an important step in orienting yourself toward positive change. A good first step is to review your lifetime income and create a personal balance sheet. This will give you an idea of how much money has come into your life and what you have to show for it. Getting clear with the past prepares you to come into the present. What is lifetime income?
  • Lifetime income is your personal income history, which includes both reported and non-reported income. You can find out your reported income from a recent Social Security Statement, the Social Security Administration site, old tax returns, or just estimate.
  • Non-reported income is money, other than taxed wages, that has come into your life. Much of that is undocumented so you will have to remember and estimate. You can go back through your memory year by year, ask family members, and look at your bank statements for deposits.
Why explore your income history?
  • The process is empowering; it will remind you that you can bring money into your life.
  • Your income history, along with your personal balance sheet, will help you realize just how you’ve stewarded that money.
  • If you have made very little money over the years, it will help you recognize how resourceful you’ve been in living on less.

What is a personal balance sheet - why is it important?

  • The personal balance sheet is the starting point for you to create a new map to your financial future – an awareness of where you are, financially, right now. Your Personal Balance Sheet will serve as the “You Are Here” spot, as you chart a course into the future.
  • A balance sheet of assets and liabilities is a fundamental business practice. Treating yourself as a business will help you get an accurate, objective view of your current financial situation.
  • Because your finances change regularly, the personal balance sheet is a good tool for getting a snapshot in a moment of time. If you have easy access to your balances, you can pick today’s date for your “snapshot.” Otherwise, pick a date in the near past for which you have all your records.
Create Your Lifetime Income Estimate

Create Your Personal Balance Sheet

Review and Reflect

Ruth Cameron, founder of New World Wealth Concepts- Financial Blog, has over 22 years’ experience in Corporate America; managing technical projects; designing processes; and developing and implementing business strategies. Error message on calculator image from Shutterstock