🌊What Does Finding a New Job Cost?

Hi there! 

Today we have a feature focused on how to prepare your budget for a job search from Alex Marcus, Cofounder of Mento, 

Mento is a career development platform to help you find the job you actually want. Introducing a new platform for ALL of your job search. 1-on-1 coaching, resume building, practice interviews, community workshops, & access to employers. Work with a ~fire~ team to land your next role — and make new profesh friends along the way.

Before you get too deep into the strategy of your job search, it’s important to understand your personal finances and allow them to guide your search. Your personal finances will dictate whether you can be more flexible, and take your time searching for your dream job, or if you just need a paycheck ASAP regardless of the role. 

The job search –  from first application to signed offer letter – takes on average 4-6 months. To give your search the time it needs, you need to make sure you have (or can create!) the financial runway for success. 

👉Please make sure to use our Mento budget calculator alongside the below steps!

Let’s start with how much money you are earning and have in reserves. All the major categories are included in Income and Assets are listed in on the far left side of the Mento budget calculator in green (make sure to have your budget calculator open if you don’t already!). 

Your monthly inflows include your primary income (your salary plus bonuses), your secondary inflows (side hustles, freelancing, etc.), and if you have been laid off, your Unemployment Insurance. Your assets include money in your checking and savings accounts, your emergency funds, stocks, and any other random accounts you might have that you can extract cash from. Note, in this exercise we are not going to include illiquid assets like property, startup equity, property, etc. 

Now take a moment and enter your monthly income and assets into your budget calculator, and let’s move onto your expenses. Whoo!

Enter your core expenses into the budget calculator in the middle blue section. Your core expenses are the essential things you need in order to live.

By nature, it’s hard to decrease your core expenses too much. But, you can certainly do your best to not increase them while you are job searching. This is not the time for you to upgrade apartments, start ubering to work, or opt ordering delivery instead of grocery shopping. Your job search is not going to last forever, and if it goes as planned, you might be able to reward yourself with some upgrades!

Your discretionary expenses are the categories in purple on the far right of your calculator. They are the fun categories and the places where you spend your extra cash. Everyone’s discretionary spending is different but for the most part, are the easiest things to either increase or decrease. They add a little spice and fun to life, but unlike your core expenses, you do not need them to get by. In the next section, these will be the easiest expenses to cut out. 

Go ahead and enter all your discretionary expenses. It might be helpful to pull up a copy of your last credit card statement while you do this.

Boom! You have now finished your budget calculator! In the bottom right of your calculator you should see a summary of how much money you have coming in, and how much money you have going out. Those numbers combined equal your Monthly Surplus/Deficit..aka how much you are making (or losing) each month. 

Under that highlighted in yellow, is your Total Runway. If you are making more than you spend each month, great job! You will see a message highlighted in yellow that says “You are cash flow positive.” This means that you can take your time job searching and be super particular about the type of role you are looking for because you will not run out of money in the meantime. 

If you do not have an income, or are spending more money than you make each month, you will have a negative number for your Monthly Surplus/Deficit, and you will see a number highlighted in yellow underneath it. That number is the total amount of months you have left until you run out of money and MUST find a job :( 

Now if that number is greater than 6 months–the high average time it takes to find a new job–you should be okay to conduct a selective job search and be just fine. However, if that number is less than 6 months, or you think your search will take longer than normal…you need to increase your runway to give yourself time for a proper search. 

There is no science or special ingredient for how to best cut your expenses. Starting with your discretionary expenses and moving into your core expenses, be honest with yourself and evaluate what things you can live without. As you play around with the calculator and cut spending in certain categories, you will notice how it impacts your monthly net income in the bottom right of the calculator.

All this budgeting will be for nothing if you don’t stay accountable! Create a support system. Whether it’s a sibling, parent, or a responsible friend, ask them to check in with you every two weeks to make sure you are following your budget. 

You can also use technology to hold yourself accountable. Try out a basic budgeting app like Mint, PocketGuard, or Co-Pilot. Sync your accounts and cards with the app and set a limit on how much you want to spend each month. And then don’t stop there! Apps like Drop, Acorn, Swagbus, Rackuten can help you continue to save and get cash back on purchases. The amount of technology out there to help you save money is probably worth a standalone article (or even a textbook 😂) but those platforms should give you a running start.

That’s a wrap! We hope this was a helpful exercise and that it will help inform how to best approach your job search. If you have any questions, or need help on your search, you can find us at www.mento.co.