Whether that job change is voluntary or not

I loooove a survey and Randstad came out with a labour and employment one earlier this month that found that 23 per cent of Canadian workers plan to change jobs but about 46 per cent of Gen Z are planning that same change.

I am a job changer, both voluntary and involuntary as I work in media. (Cue me snickering semi-hysterically because IYKYK.)

There are some fabulous stats in this year’s survey like Women place a higher premium on compensation than men (69% vs. 62%) and 8 in 10 workers place great importance on benefits that support their lifestyle: flexibility, time off, and health and wellness (all around 82%).

(Wait until you read This week’s readings about leadership.)

Anyway, I’m not here to talk about the survey itself but more about how to prep for a job change whether it’s a voluntary one or if you get turfed out by an employer.

I spoke with Edward Jones’ Blair Lukan, CFP, CEPA, CEA about how to prep, what to think about and whether there’s a perfect formula for calculating how much to save per paycheque for an emergency or fuck off fund.

Q: Before someone even starts thinking about leaving a job, what should they be doing financially?

A: Ideally, this starts long before a job change is on the horizon. A financial plan shouldn't just be numbers. It should include your values, what's important to you, where you see yourself in five or 10 years, and what your goals are.

Once you know those things, you can evaluate whether a new opportunity moves you closer to those goals or further away. I often try to reframe "job change" as "job progress." The question becomes: does this move you toward the life you want?

Q: How do you define progress in that context?

A: It's completely individual. It comes down to a person's goals, values, hopes and plans. Once we know what someone wants to achieve, we can assess whether a potential job change supports those goals or works against them.

Q: Most people immediately think about an emergency fund. Should that be the first financial priority?

A: It usually is, but I think about it through the lens of scenario planning.

When we're building a financial plan, we're constantly asking "What happens if?" What happens if you're downsized? What happens if you decide a job is no longer fulfilling? Walking through those possibilities in advance helps determine whether you have an emergency fund, access to a line of credit, or other resources available.

Layoffs and stress

Q: Does job-loss planning look different for single people?

A: Absolutely. With single people, it's important to understand whether being single is a long-term lifestyle choice or whether they expect their circumstances to change.

Financial planning isn't just about solving today's problems. It's also about anticipating future changes. Someone who is single today may eventually want a partner, children, or a different lifestyle. Career decisions that made sense at one stage of life may not fit later on.

I had a client that started with me very young in college. We built out the financial plan and that type of thing. They finished their degree, went into their industry, and were in that industry for about 16 years. That particular industry meant that they're away from their family for two or three months at a time.

So from a single standpoint, it fit. As life changed and and they got married and had kids, all of a sudden that two or three months away from the family just doesn't work anymore. So that's moving them further away from their goals because their goals have shifted. Now my goals are, you know, to raise my kids and have a good family life, some vacations. So, thinking from a single standpoint too, it's knowing what the future can look like. I think in a lot of ways, as financial advisors, we often think about what we need to solve today.

Q: How far into the future should people be planning?  

A: I don't think you can plan too far ahead. I mean, it's interesting from my standpoint of financial planning is in some ways almost looking backwards. So, I have multiple conversations with clients around these things, but I might start about let's go two years after you're gone.

We're all preppers now with money

Q: As in dead?

A: Yeah. So now you're starting to talk about okay, here's the people that you've left behind. What what are they saying? What what shape have you left them in? That kind of thing, and if you walk backwards through your life, sometimes it's it's easier to take you into today and say, okay, so now we we've got an idea of what the next three to four years looks like, the next five years, 10 years, and then you've got. So I don't think you can go too far ahead, honestly.

Q: Going back to an emergency fund and traditional financial advice because I've written about that multiple times, old advice is three months. Is that realistic anymore?

A: If I'm hearing the question correctly, is it realistic to even try to get three months of savings put aside?

Again, it's situational. So I think every individual should have an individual financial plan. You know, if I think rules of thumb are are challenging. You know, sometimes they give you a good base to start to set a goal and say, let's let's try to get that six months aside.

But it's really walking through their personal finances, what's in the budget, what things can be. You know, so you've got your necessary and your discretionary expenses. So for thinking about a job change, whether that's one that we've brought on or you know one that just happens to us, analyzing that budget from a standpoint: okay, what's necessary and what's discretionary? So, in that event, what discretionary expenses can we cut? Then we look at the necessary expenses and start to build out those timelines that way. Six months is a good rule of thumb. For some people, they might need more. Some people might need a little bit less.

Q: Where does employment insurance fit into the equation?

A: It becomes one of the potential income sources in your contingency plan.

The process is similar to retirement planning. First, determine what level of spending is required. Then identify what income sources are available, whether that's savings, EI, investments or something else.

Let’s talk about your team

Q: What about people who don't have the income to build a substantial emergency fund?

A: We have to work with the reality of their situation.

For someone who has extra cash flow, building an emergency fund is usually the best option. For someone who doesn't, other tools may need to come into play, including a line of credit.

The basics remain the same: review the budget, determine what can be adjusted, look at savings and investing contributions, and make sure you're considering all available financial resources.

Q: If money gets tight between jobs, should retirement contributions be one of the first things people cut?

A: Before reducing contributions to your future self, it's worth looking at other areas first.

One of the goals of financial planning is to avoid painting yourself into a corner. Every financial obligation reduces flexibility. Car loans, mortgages and other commitments all affect your ability to adapt when circumstances change.

What helps most is planning these decisions in advance. If you've already identified which expenses you would cut during a job loss scenario, you're much more likely to make good decisions when emotions are running high.

Job changes can be emotional. The more preparation you've done beforehand, the easier it is to respond rationally.

Q: Does insurance factor into job-change decisions?

A: It definitely can.

One of the mistakes people make is focusing solely on salary when comparing job opportunities. A higher-paying job may not necessarily be the better financial choice.

You need to look at the entire package. Does the current employer offer benefits? Pension contributions? Insurance coverage?

I often compare two opportunities side by side and show clients the full picture. Once you account for benefits and other forms of compensation, the difference may not be what they initially thought.

Q: Have those comparisons ever changed someone's mind about taking a new job?

A: Yes, particularly when they're moving between employers within the same industry. In my experience, it does if they're staying in the same industry, and they're moving from one company to another. So they're happy with the industry they're in. It doesn't play so much if this is a fundamental change in in lifestyle, ‘I thought I was going down this path, and I'd really enjoy this as a career. I'm finding that I don't.’ So that tends to have more of a weight than than these decisions.

Q: What's one thing people often overlook when making these decisions?

A: Having someone objective to talk to.

One of my favourite sayings is that you can't read the label when you're inside the bottle. Whether that's a financial advisor, a coach, a mentor or another trusted professional, having someone who can look at the situation objectively can be incredibly valuable.

Q: Is there a formula for how much people should save toward an emergency fund?

A: Not really.

Formulas can be useful for motivation or as a starting point, but ultimately it comes down to individual cash flow and circumstances. What works for one person won't necessarily work for another.

The goal isn't to fit everyone into the same formula. The goal is to create a financial plan that's specific to their situation.

Q: What about the old advice to save 10 per cent of every paycheque?

A: The challenge is that people go through different life stages.

There are periods when it feels like everything is competing for your paycheque. At those stages, the priority may be building an emergency fund and putting contingency plans in place.

Later on, when obligations change and financial pressure eases, you may have more room to focus on other goals. Financial planning works best when it recognizes those different stages rather than trying to accomplish everything at once.

This week’s readings:

Cool, but about those fuel surcharges. Air Canada elevates in-flight rest and comfort with new bedding and amenities (Air Canada)

Male leaders are delulu. Men and women in the c-suite are living in two different realities (Girlboss)

Statistics Canada released a new study that examines the distribution of residential properties by investor size in six provinces 2022. You won’t be surprised. Maybe. (StatsCan)

By me: How to talk about death and dying - before it’s too late (Canadian Family Offices)

Obligatory book reminder: you can buy my book pretty much anywhere.

Talks!

Also, financial literacy month is coming up and I am available for talks on finances for single people. I’m talking with two places and when that’s finalized and with their permission, I’ll post details here.

Got some great and some unhinged advice you’ve been told or do as a single person. Keep them coming!

 or forward to a friend who is thinking about changing jobs.