If you’re looking for a new career path, it can be hard to know what salary range you should be aiming for. While there are lots of factors to that answer, a good starting place can be to figure out what it really costs you to live comfortably. Here are some budgeting tips, but also keep in mind that a new career might come with a small pay cut, so also think about what changes you can make without too much difficulty until you can build back up to the salary you want.
A good guideline to follow is the rule of 50/30/20: Half of your earnings should be earmarked for needs like rent or mortgage, groceries, etc. 30% is for your wants, and the remaining 20% goes to debt repayment or savings.
To keep track of how you’re spending your money, use a tracker like NerdWallet, Mint, Digit, Personal Capital, or Empower. (Look them all over and see what you like.)
Then check out this easy spreadsheet to find out what you’re really spending. It lays out 12 months of spending, but feel free to pick just a month or two in order to get a snapshot. Once you know how much you’re spending and where, you can also make choices on where to cut without much pain. Then you’re ready to think about what you want the next job to pay you. Be sure to remember that this is just your current spending, so what you want to earn should be higher than your total here.
In order to see if your desired salary is realistic, you’ll also want to check the job title you want on Salary and Payscale, although that may come later in the process if you’re still choosing what’s next.
