If you are like the average person, you are likely to switch jobs around 10-15 times over the course of your career. Millennials, for instance, change jobs four times on average in the first decade after graduation.  It is also typical for employees to spend five years or less at a job. But, no matter how many times you seek better job opportunities, transitioning from one job to another is never easy. Effectively planning the move and carefully budgeting your financial obligations during the transition can help you avoid financial setbacks.

here are few things you can do to establish a smooth transition between jobs:

  1. Create a monthly budget for the transition period: Right after you accept the new job offer, be sure to take the time to gather a clear picture of your monthly expenses. Evaluate what your expenses might look like for the next three to four months to help you adjust or cut back on spending as needed when the transition actually happens. While creating your monthly budget, account for all unavoidable, non-flexible expense, such as credit card debts, loans, or any other monthly instalments that you are required to pay. A simple digital tool like Mint can help you gain a clear picture of your financial commitments, and track and monitor your spending.
  2. Avoid unnecessary expenditure: Once you have a handle on the monthly budget for your transition phase, segregate necessary and discretionary expenditure. Maintaining self-restraint by not spending on non-essential items can help you better manage your finances. Keep track of petty expenses and evaluate if you can pass on those to further boost your savings. One way to do this is to store all your receipts in a digital format and go over them at the end of the month to have a clear understanding your expenditure. Then, ruthlessly reduce or eliminate discretionary expenses.
  3. Have a contingency fund: Make sure you set aside an emergency fund to tackle unanticipated surprises that life throws at us. Experts recommend that every individual maintain a contingency fund equal to at least three to six months' worth of essential living expenses. A contingency fund can come in handy, in case the transition takes longer than you expected, due to some unforeseen circumstances. An easy way to save is to set aside a portion of each pay check into a separate savings account, as soon as you decide to change jobs. Also, continue to add any extra cash, bonuses, tax refunds, arrears, etc. to your emergency savings fund. ‘Hope for the best, save for the worst’, should be your mantra for saving for an emergency fund. Emergency fund calculators can help you figure out exactly how much you should save depending on your personal context.
  4. Create a future budget well in advance: Once you decide to move jobs, estimate your new job earning potential and create a monthly budget for your future expenses as well. While making your budget, factor in things like relocation expenses, commuting costs, and cost of living against your predicted new income. Make use of sites like Glassdoor.com to help estimate your future earnings after your career move. At the same time, cost of living calculators can help you assess living expenses in your new location.

As the stigma of job hopping dissipates, you might be tempted to change jobs more frequently to improve your career and pay prospects. While a job change brings several benefits in its wake including financial gains, it usually takes a while before you start to see any of the benefits. Careful planning, budgeting, and monitoring of finances is key to a smooth and stress free job transition.