TIPS: Five Career Transition Financial Tips

By Candace Waller
Finances are at the top of everyone’s minds these days. You can’t listen to the news or read the newspaper without hearing some mention of the economy. Those who are in a career transition—or soon to be—may already be stressed out by financial issues.
AXA advisors Michael Cocco and Mathew Niemczyk provided five tips on financial management for those in transition at the October 15 Career Networking Group.
1) Write Down Your Monthly Budget
Budget: This is a scary and painful word for some people but having a written budget is a critical first step for those who need to manage their money—especially those in transition. A written budget spelling out the exact dollar amounts of where your money is going will help you make necessary cuts. For example, you might discover that eating out is costing you $50 a week. Staying at home or bringing a snack could drastically cut this cost.
A budget will also help you determine how long you can stay afloat without working.
Another bonus to having a written budget is motivation. Knowing the number of weeks you can manage without dipping into savings will often motivate you to step up your networking and other job search activities.
2) Work With Creditors to Avoid Hits to Your Credit Report
Procrastination is a big problem for people facing a financial crisis. However, financial problems won’t go away just because you ignore them. Having a written budget can help you reallocate money to pay down your bills. You could even send your budget to a company when negotiating a payment schedule.
Working with creditors may also help with FICA scores. Many companies report delinquent and failed payment to the credit bureaus. This can negatively impact your job search because many companies screen applicant’s financial backgrounds before offering a position. It is impossible to plan without knowing exactly where your money is going. Writing down your budget is a way for families to make positive steps to staying financially fluent. In the event that you don’t find a job before feeling the financial pinch, you should try to work out a payment agreement with creditors as soon as possible.
3) Consider Opening a Home Equity Line of Credit or Using the HARP and 72T Programs
Many people are under the mistaken impression that opening up a home equity line of credit will negatively impact your credit report. However, if you are only approved for the money, but don’t start using it, your credit score won’t be impacted. This step is best done when you and/or your spouse are working because it may be harder to obtain once you lose your job. You may never need the money but using a home equity line of credit often offers better interest rates than using credit cards.
There are several federal and state programs that help people stay in their homes:

  • HARP is a federal program that gives people in their primary residence, who do not have enough equity to refinance, get a lower interest rate. This is especially helpful for those who find that their home is worth significantly less than when they bought it. Contact a mortgage professional if you are interested in this option.
  • 72T is a provision in the IRS code that has been around a while. It is more beneficial to individuals aged 50-59 and gives them the option of taking money out of a 401k without the 10 percent early withdrawal penalty. This program works as a bridge to retirement.

4) Continue or Purchase Term Insurance
Many people in career transition make the mistake of dropping term insurance. Companies often carry this type of insurance or something similar for employees; however, this insurance isn’t portable. Once you are no longer working for the company the coverage stops.
Term insurance, which usually just covers a select time period, tends to be less expensive than permanent insurance. Permanent insurance has a cash value but insurance premiums are much more expensive than term insurance. Once you start working it may make sense for you to upgrade your term insurance policy to a permanent one. The advantage is that you lock in the lower rate (the earlier you purchase the insurance policy the better the price), you don’t have to re-qualify with a medical exam or medical questions and you get the benefit of building cash value.
5) Work With an Independent Financial Advisor
Being out of work for longer than a few months forces people to make some tough decisions. Sometimes you and other family members are too close to the situation to be objective even after you have a written budget. Your financial advisor can help you develop a plan for you and your family to get through this difficult time.
Choose your financial advisor carefully because they are not all the same. Some financial advisors are tied to certain products which they will try to push their clients to purchase in order to increase their own numbers and/or commissions. Find an advisor who can give you the facts and a plan without being influenced by the need to push certain products.
Bonus Tips

  • Check your credit history for free at Once you know what information is on these reports you can ensure accuracy, send in a note explaining a particular situation and track how your credit is being reported.
  • Individuals are eligible for one free report each year from each of the three credit bureaus (Transunion, Equifax, and Experian). Check your credit report every four months by contacting a different bureau and requesting a report.
  • is a great free site for creating a budget. Once you input all your financial information, creates a budget and will even send alerts if you go over prescribed amounts.

AXA advisor Michael S. Cocco, CFP®, CERTIFIED FINANCIAL PLANNER™ Professional can be reached at 973-667-8650 or

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