Planning for 5 Life Events: #2 Job Transition Checklist

“If there’s one thing that’s certain in business, it’s uncertainty.”  -Stephen Covey

With all the uncertainty in life, it pays to plan ahead in a manner that will allow you to move forward with a goal. We do this often with our clients and find that no one’s ever upset if they’re over prepared financially. It’s definitely better than the alternative. 

This post is the second in a series about preparing financially for five BIG life events. You can find post #1 on buying a home  here.

Job Transition

The days of retiring after decades at the same company have all but vanished. The average number of jobs in a person’s lifetime is 12, according to a 2019 U.S. Bureau of Labor Statistics survey. Whether it’s your first job or your tenth, transition always brings about the unknown and it takes a while to feel settled. But you can ease that uncertainty by preparing in advance whenever possible.   

Who knew that the “pandemic” would become another of  the myriad of reasons for a job transition?! Each situation, whether desired or unwanted, has its own nuances. People are fired, laid off, demoted, promoted, or they’ve taken initiative to find a new employer or transition to a new career. In each of these cases, it’s best to take inventory of your current financial life to ensure you remain on solid ground. This checklist can help ease uncertainty and help you begin a job transition plan. 

1. Evaluate your cash reserves

Cash Reserves are key for any of the situations I’ve mentioned above. If you are out of work, or underemployed, or even if your transition goes smoothly, your cash flow could be seriously interrupted. You are going to need robust savings to lean on. 

A widely accepted rule of thumb is to have three to six months of savings at all times. To determine your savings amount, examine your monthly expenses, but don’t forget to add in the extra expenses that may not be covered as a result of your new job transition. Will you have to secure your own health insurance or make COBRA payments? You can use this NerdWallet Emergency Fund Calculator if you need help making an estimate.  

2. Take inventory of what you are leaving behind

Compare your old job with your new environment. What changes will there be? Will they require some financial adjusting on your part? Each position has a different combination of these components that may require you to save, spend, or plan differently. Ideally you’ll want  to maintain or grow your financial security in a new position. 

  • Salary/bonus

  • Health insurance/FSA/HSA

  • Life insurance

  • Paid time off 

  • Shareholding

  • Employer contributions to retirement

  • Other perks 


3. Negotiate the terms of your new position

Don’t make any assumptions about what you might receive in your new position! Consider all of the areas we’ve just covered and decide what kind of package makes sense for you. If the salary is non-negotiable or lower than you’d like, maybe the benefits (such as  more insurance coverage, extra paid time off, or employer contributions to a 401K) can make up for it. Ask questions and offer compromises that help you maintain a life balance you want and financial goals you can achieve.     

4. Determine the financial changes you need to make

Once you’ve accepted this new position, what will change in your life? Will you need to modify the way you invest? If you’re taking a pay-cut, it’s important to figure out how you can continue to save. If you are expecting a salary increase; what will you do with this extra income?


Watch out for this potential pitfall! 

Without a job transition plan, you may end up with lifestyle creep--items that were once luxuries now become essentials. New income provides an opportunity to grow your wealth and it can get you closer to your dreams, but only if you have a plan!


Using this checklist will help you make a smooth job transition and significantly lessen the uncertainty and stress of making a change. In 2020, Merino Wealth helped many of our clients through similar transitions. CLICK HERE to let us help you prepare for the BIG moments in your life.