For any career transition, financial reserves are a basic need because you have to meet all living expenses during the transition. It is advisable to have cash reserves for six months if your career search means joblessness.
Experts advise financial arrangements for two years or more for those who plan own business or a consulting firm. The options are limited.
You must have cash cushion as you take at least a year or two to build a reliable client base. You have to depend on your savings or rely on your spouse's income to meet your training costs and the guaranteed payments you have to make. Or change your lifestyle for the first few years of your adventure.
Insurance cover
Another aspect you can't afford to overlook is the insurance cover. Make sure you have enough insurance during your transition. Consider continuing the health insurance you are having with your current employer through COBRA. Or you can be part of your spouse's health plan. If you are single, maybe it is affordable to go for a private regular coverage.
You must pay attention to any retirement benefits or accounts you have, like 401K. To avoid tax, you should convert 401K into IRA account or any other retirement plan with your new employer.
If your choice is getting training for a new job, better you go for student loan so that you can keep your cash reserves intact. You can even take a bit more than your need, provided:
