You’re thinking about changing your career, and you know that the switch means starting with an entry-level job. You’ve been at your job for more than five years and are earning a comfortable salary, and you may be wondering how to supplement your income.
Some people cash in their retirement savings to make ends meet when they take a salary cut, but other options can save your retirement funds and subsidize your income. Before quitting your job and thinking about cashing in your 401K, consider alternatives that may lead you to your next opportunity and generate additional revenue.
1. Start Moonlighting
Moonlighting is an excellent way to earn an additional income. If the idea of moonlighting interests you, but you’re unsure where to start, you can go to startmoonlighting.com to see the top ten lists of the best moonlighting jobs in different categories.
Startmoonlighting.com has articles providing you with advice on different situations moonlighters may experience. You can also find current statistics about moonlighting on the site.
Before you start moonlighting, you may need to check with your company’s employee policy. Some employers oppose moonlighting and may be concerned about sharing proprietary information.
Moonlighting is an excellent way to expand your network, meet new people, learn about new opportunities, and generate income. If you know what type of work you want to moonlight in, you may be interested in learning about the top websites to find part-time and temporary work online.
2. Begin a Side Hustle
While moonlighting implies working for a company part-time, having a side hustle means working as a freelancer, being self-employed, and working on your own schedule. Many people start their side hustle, hoping it will evolve into a business they can operate full-time.
If you’re considering starting a side hustle, you can find information and support on sites like sidehustlenation.com. The site has resources about the different side hustles you can begin, including online businesses, freelancing, e-commerce, and investing.
Your side hustle can be anything you want it to be! If you have a talent in something that people are willing to pay for, why not monetize that talent instead of cashing in your retirement fund?
There is an abundance of options out there promising that you can generate significant revenue without too much of your time and some of your money. Before you commit to anything, you may be interested in learning about sketchy side hustles you might want to avoid.
3. Consolidate Your Debt
If credit card debt is making you feel trapped in your job, you may want to consider consolidating your bills. You can visit debt.org to see how to consolidate your credit card debt and pay a lower interest rate.
Suppose you’re a homeowner with a mortgage. You may want to consider refinancing your mortgage, adding your credit card debt to what you owe on your home.
Consolidating your debt is an excellent option to lower your monthly payments, allowing you to pay your bills and possibly save some money. Money worries can distract you from work and affect your overall well-being, so minimizing those concerns is best.
Once you eliminate your credit card worries, you can focus on looking for a new job, starting a side hustle, or moonlighting. You’ll have more money to save or invest; the choice is yours!
While credit card refinancing and debt consolidation can hurt your credit in the short term, in the long term, it’s better as long as you make your payments on time. If you’ve struggled with managing your debts in the past, you may be interested in learning about the best debt management apps for mobile.
4. Review Your Budget
Before cashing in your savings, you should review your current expenses and see where you can save money by reducing costs. Maybe you’re paying for a subscription you’re not using, or there’s a lower rate that makes more sense for now.
Maybe you’ve been spending a lot on dining out or other entertainment activities. That doesn’t mean you have to cut out fun entirely, but at least you know where your money’s going and make a conscious decision.
An app like YNAB (You Need a Budget) and help you change your money mindset and use your money smarter. The app can help you see where your money is going, giving you a clear idea of where to make adjustments.
You can try the app for free with a 37-day trial, and then you can choose to pay for access monthly or annually. The monthly plan costs $14.99 a month, and the annual subscription costs $99, which is $8.25 a month.
The app boasts that new users save $600 on average by their second month of using the app and an average of $6000 saved by new users in their first year of using the app. YNAB hosted a 2021 Debt Paydown Challenge, and the average participant paid off $8000 in debt.
There are various budget software programs, and finding the right one for your needs can be challenging. You may be interested in learning about the best budgeting apps to get your finances in order.
5. Embrace a Minimalist Lifestyle
Another way to generate revenue to fund your career change is to let go of things you no longer use or need in your home. Embracing a minimalist lifestyle can help you save money and create a simpler life.
To learn about minimalism, you can visit theminimalists.com to find information about the concept. When you start to embrace minimalism, you can earn money by selling things in your home that are taking up space.
Suppose you have a storage unit. The fact that it’s not in your home means you don’t use it regularly. Visit your storage unit, sell as much as possible, and purge the rest. You may be able to move to a smaller storage unit, another cost savings.
Decluttering and removing things you don’t need can be challenging since some items can have sentimental value. If you need some help, you may be interested in checking out some websites to help you on your decluttering journey.
Cashing Out Your 401K Isn’t the Only Option
Since most of your savings are in your 401K, it can seem like the obvious option when you need some extra money to cover you while you change to a new job. The good news is some alternatives can help you create a cushion while you transition, some possibly leading to the transition itself.
Instead of cashing out your 401K, consider what else you could do that would help you reduce your expenses and increase your revenue. Find an option you’re comfortable with, and try it out! You can always try again if the first option doesn’t provide the desired results.
FAQ
Q: How Do You Start Your First Side Hustle?
You can start your first side hustle by reflecting on two factors at large: what you are good at and what you're passionate about. In other words, the skills you possess that you can monetize and the things that you like doing regardless of the pay. Without the former, your side hustle wouldn't be profitable and without the latter, you wouldn't have the motivation to keep going and face the challenges gig workers face.
Q: Can I Change My Career at 30?
Changing your career does admittedly become a bit more difficult as you grow older, especially if you have other people dependent on you. But if you have the right guidance and tools, you can make it work. Once you've gone over things to consider before quitting your job, you can start looking for a way out of your industry by learning new skills, finding a mentor, building a network, and gaining some experience in the new field.