But I do have an important health care-related message for you and your financial plan:  If you’ve been putting off going to the doctor for something, go do it now before your coverage gets any sparser and it ends up costing you more.  When I talk about coverage getting sparser, I’m not talking in the global sense, but on a “per individual”/”per family”, near term basis.  And I bring this up here and now because both year-end and, unfortunately, career change can be a trigger for this.  

True, even people keeping the exact same job pretty much expect to see fewer benefits at higher cost each year when open enrollment season rolls around.  But the risk of reduced coverage is greater still when changing careers.  The obvious situation is a move from an industry that has comprehensive benefits to one  that doesn’t.   Maybe your spouse’s insurance can make up the difference; maybe not.

Or consider involuntary career changers.  Those workers who’ve been laid off often face a choice between paying astronomical premiums to stay on COBRA or dropping down to a much less comprehensive plan.   Yes, the COBRA subsidy included in the American Recovery and Reinvestment Act of 2009 has been a big help, but this job market is brutal and many are remaining jobless long enough to see that benefit expire.

Even 8+ years post-career change, I myself keep running up against this as a self-employed.  Every November when my renewal package comes, I steel myself for an eye-popping increase to what is already a sky-high premium.  Sometimes I swallow hard and accept the new rate; other times, I opt to “self-insure” for more things, i.e. downgrade to a lousier policy. 

This year, I already know I’m in for a bigger-than-usual wallop.  Why’s that??  I’ve reached a birthday that qualifies me for a new “rate class”, as they say in insurance jargon.  i.e. I’m older enough that stats say I’ll be costing the insurance company more so they have to increase my premiums by even more than the inflation-beating annual percentage to which I’ve grown accustomed.    Argh. 

Health insurance for the self-employed, or anyone who’s not in a very secure long term job (read: almost everyone), is not for the faint of heart, that’s for sure.   I’m sorry to say I don’t have a good answer for any of this, one of the most vexing challenges facing career changers.  But it seems clear that each of these “little” gaps in the current system add up to a solution that really doesn’t match the way the world of work is evolving.  In my wildest dreams, I hope that we — the collective “we”, that is – can do something to close that distance sooner rather than later.  In the meantime, at the very least, be sure to make the absolute most of the benefits you have now before you reach some milestone and they become a treasured memory of the good old days.  Stay well!

Last post, I promised to follow up with one more story on managing the costs of returning to school for graduate study.  In that post, I described some strategies I used to minimize the costs of getting my MBA. One of the points I made was that, although time = money, sometimes the equation shifts, so that time actually equals more than money. And that was certainly true for me when I decided in 2001 to go back to school yet again, this time to pursue CERTIFIED FINANCIAL PLANNER™ certification, which would allow me to make the major career shift I had in mind.

In deciding NOT to work full-time while getting certified, several factors came into play.  First, I was pretty burned out after 4 years of working in the dot-com maelstrom.  Plus, this was a scant 4 years post-MBA, so the struggle of trying to study part-time while working full-time (translation: no life) was still fresh in my mind.  And now that I’d finally found the answer to the question “What do I want to be when I grow up?”, I just wanted to get on with it, frankly, as opposed to dragging it over several years.

A few other factors that enabled this decision:

• While not cheap, the costs of CFP® certification are relatively reasonable compared to other professional programs.
• While I could have kept the actual dollars invested lower by learning the materials via self-study,  I decided it was worth the extra money to pay someone for formal classroom instruction.  As a trained engineer who might tend towards overengineering when left unchecked, I know myself well enough to realize that externally imposed deadlines would be valuable far beyond the outlay of cash required.
• There was another absolutely critical piece that made this work…  At the time (and maybe even now), only colleges 45+ minutes drive from my home even offered this curriculum, and most did so in the traditional “one class per week for a full semester” mode.   Northeastern University, however, was unique in offering what I called crash courses, where the instruction of an entire semester was delivered in 2 full days over 2 full weekends at their more easily accessible suburban campuses.  Although this format was probably targeted at full-time employees who could only attend on weekends, it was also the perfect way for me to fast track my certification, while also avoiding the commuting costs and wasted time (= money!) of driving into Boston every week for probably 2 or 3 years.
• I did some consulting work, using skills from my previous life, but in the new industry.   Not only did this help defray the costs of living and tuition, but it was a major coup in another, perhaps even more important way.  That is because it required me to discuss fee-only financial planning practice models with a variety of experienced members of the National Association of Personal Financial Advisors (NAPFA), to whom I otherwise wouldn’t have had access.   Talk about fast tracking an education!  This work was absolutely integral to helping me understand what my desired career change would take, and how I would want to run my own practice when the time came.  (A big shout-out to Warren Mackensen and the rest of NAPFA for this tremendous opportunity!)

As I look back over this post, I realize it is not so much a tale of controlling costs, as it is of matching the time/money equation to the wanna-be student’s needs and resources.  Something tells me that might be worth a lot more when the final tally is made.

But even going back to school only twice can add up to a whole lot of tuition and book money.  So I thought I’d share how I kept my education costs to a minimum.

The first time I went back was about 8 years after undergrad.  At that point, the only career direction I knew for certain was that I didn’t want to be the engineer my undergrad degree qualified me to be, and I’d already made the shift to engineering manager at a small company in Marlborough, MA.  (Any Viewlogic alum out there??)  I was curious to learn more about management but not sure I’d like it enough to take on the financial risks (i.e. no cash in, lots of cash out) that going back to get an MBA full-time would entail. 

Fortunately, my company offered tuition reimbursement, and Clark University offered classes at a satellite campus only 15 minutes away.  So I went part-time, and found I kept wanting to go back for more.  It was an absolutely ideal arrangement… for the first few years, until I realized that by the time I finished the degree, I would be eligible for Social Security.

In the equation “time = money”, sometimes there comes a point when time equals more than money, and I had reached it.  So I applied to finish full-time, Clark generously offered some scholarship money, and I was out of there — degree in hand — about a year later and not that much poorer.  Honestly, I don’t even remember what the whole thing cost, but I can tell you it wasn’t even 1/10th of what I might have paid if I’d gone full-time and footed the entire bill.  Best of all, I didn’t end up with any student loans that would be sure to dog me long after I’d forgotten how to use the Black-Scholes model.  (Don’t ask.)

The moral(s) of the story:

• If you’re not sure what you want to do when you grow up, find a way to test drive your interests before committing to an expensive education program.
• Look around to see who else might have a stake in you learning.  In my case, my company benefited for several years as I was attending Clark and applying my newfound knowledge (“So that’s what they mean by profit!”) back at the office. 
• Don’t assume schools won’t help an older student.  If you have the characteristics they’re looking for, you might be just get a nice $urprise.

Now, if you’re any good at math, you’ve probably already figured out that this all happened more than a decade ago.  Since then, college costs have gotten exponentially higher as purse strings at companies and colleges have gotten tighter.   But I know from talking to friends, family, clients, and our “go to” college planning expert Todd Weaver that opportunities to get smarter for less still exist.  With costs as forbidding as they are today, it’s likely to be worth your while to do a little digging to find them. 

(Next up:  Student prophecy II, The Sequel — Back to school again, this time to learn what a financial planner needs to know.)

Prior to making my shift, I had anticipated I’d have to take a pay cut to make such a dramatic jump.  Much to my amazement, I ended up getting offered more post-transition, for a job for which I didn’t have a ton of direct experience.   OK, the MBA probably didn’t hurt, but I also believe the internship played a part in helping my prospective employer see me as a card-carrying member of my target profession. 

The lesson: Don’t overlook, downplay, or genericize volunteer work you may have done.  If you gained valuable experience that contributes to your readiness for your new career, make it easier for employers to figure that out, and compensate you accordingly.  Check out this article from fellow Clark alum and career marketing architect Abby Locke for tips on how to do just that.

Being on the receiving end of the news that — along with much of the company — I’d been laid off, going from essential contributor to essentially expendable in a matter of minutes, was a gigantic, world-view-shifting wake-up call.  Well, OK, I’d been inching towards an escape from my position, company, industry… for quite a while, but somehow I always imagined the timing would be up to me. Ha, sweet kid!

At first, I was none too pleased to be among “the chosen,” but over time, I began to see this as one of my lucky days.  Frankly, were it not for being shoved, I don’t know how long it would have taken me to muster the courage to jump off this particular cliff. Not usually one to “jump and grow wings on the way down,” I am thankful for the nudge.

The other thing that allows me to be grateful is that, on some level, I had been preparing myself for a shift for quite some time.  In fact, it would be fair to say that, before I even finished my Electrical Engineering undergrad degree, I already wanted to do something else.  Problem was: I didn’t know what the something was.

In a classic case of not seeing my own nose in front of me, it turns out that “something” must have been financial planner all along.  And I now know that because (consciously or no) I had already been doing many of the things that a financial planner would recommend to a prospective career changer:

• Spend beneath your means
• Avoid “bad” debt
• Save money from raises & bonuses
• Take advantage of employee benefits
• Invest Escape Fund (i.e. money for the transition) conservatively

There was also plenty I woulda, coulda, shoulda done, but didn’t. For starters:

• Review insurance coverage, especially health insurance
• Research career options
• Get a home equity line of credit

As Pink Slip Lemonade month continues, look for details on these and other ideas for prepping yourself for a period — voluntary or otherwise – of earning less, as well as Parts II & III on what to do in the immediate aftermath of layoff, then later once your transition is complete.  Happy Trails!