Hello $World: Financial Planning for Aspiring Engineers

Becoming an engineer requires major time and financial investment.  Whether you are learning on your own or attending school, there comes a point where you’ve got to make some tough decisions — when to quit your current job, how long you’ll need to study before you find a new job, etc.  Factoring large in this equation is the task of figuring out how much money you’ll need during the time span where you’re not bringing home a paycheck.

Some costs to take into consideration:

Educational costs:

  • What are your direct educational fees? (tuition, hardware)
  • Indirect educational fees: you’ll need a small discretionary fund for Meetup fees, conference fees, software, and a couple of books (most are available online, but I purchased a few so that I could study on my commute).

Living expenses (monthly):

  • Based on past expenses, how much money do you need per month to support yourself and your dependents?
  • What are your additional living costs in order to pursue your goals? (This category could include things like extra commuting costs, healthcare, internet access.)
  • Learning a new career skill is an investment in yourself — it’s what my instructors at school call a high-leverage time: for every hour of focused time, you will reap exponential learning and financial benefits in the future.  In order to get the most out of your few months of dedicated studying, you will need to minimize other time demands.  You may have to outsource tasks you normally take care of yourself, such as child- or eldercare, cooking, tailoring, etc.

Once you have figures for these, it’s time to think about the duration of time you will be out of work.

Based on conversations with developers about the length of time it takes to get a job as a new engineer, I created two budgets:

Best-case: I would attend school for 4 months and find a job 3 months after graduation, landing a full-time job at the end of those three months.  I will have one or two personal emergencies that require extra money.

Worst-case: I would attend school for 4 months and find a job 6 months after graduation.  I might have four or five personal emergencies.

There are always worse worst-cases, but these seemed like the most likely timespans given my situation and the level of demand in the field (fairly high).

Having costed everything out and put my two budgets in place, I was able to leave my job and focus on my studies with more confidence.  And as I experienced setbacks (there were a couple of big ones), instead of feeling terrified of some nebulous threat of poverty lurking in my future, I revisited my best- and worst-case budgets to re-calculate my finances and look for areas to save.

The challenge becomes finding ways to stay within budget, but to do so without compromising your study time.  In the next post, I’ll talk a bit about walking that line.

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