Money is the Answer. What’s the Question?

Chasing your dream and paying the mortgage don’t have to be mutually exclusive activities

We're told money doesn't buy happiness. Yet it tops the list of happiness-drivers in study after study. Why? Because not having enough money can keep us from prioritizing the things that matter most. Is it realistic to expect we can afford a life of passion and purpose? Financial expert Jean Chatzky says yes. Here's how.

Here's a surprising fact that might make your day: You can quit your day job (assuming you want to), and maybe a lot sooner than you think. That might sound surprising coming from me; my first piece of advice is always: "Don't quit your day job." But I follow that with "just yet."

Chasing your dream and paying the mortgage don't have to be mutually exclusive activities. You just need to be practical. For your passion to become a career or business, you have to be able to make money at it—enough money to support yourself and possibly others. Otherwise it's not your job, it's your hobby.

Which is why, for most people contemplating what's next in life, the big question—after "What should I do?"—is: "Can I afford it?" More than half (57 percent) of folks ages 40 to 59 said they are not working in their dream job, and almost one-third planned to change careers in the next five years, according to a USA Today survey conducted in May with Life Reimagined. The biggest thing holding them back? Finances.

Similarly, a new survey conducted by Luntz Global (also in collaboration with Life Reimagined) revealed that when asked to select what would most increase their happiness, nearly 4 in 10 people (39 percent) between ages 40 and 59 said more financial security. And 33 percent said that a lack of financial security was the main obstacle to prioritizing things that would make them happier, followed by 20 percent who said a lack of enough time, and 14 percent who cited job demands.

But money doesn't have to be a blockade between where you are right now and where you want to be. There are many ways to look for—and find—more fulfilling work while remaining financially afloat. You just need to be creative, determined and disciplined. You've heard the old real estate adage: location, location, location. With career reinvention it's: preparation, preparation, preparation.

Test Drive Your Dream

Remember that reimagining your life is not an all-or-nothing proposition. Even though you may be dissatisfied with your work life right now, dumping it cold is generally not the wisest financial maneuver. A better way to go: Road test your fantasy career or lifestyle before abandoning your financial safety net. Here are seven ways to leverage what you already have to propel you toward what you want:

Step 1: Build your own exploration fund.

Think of it as a 401(k) for your reimagination rather than your retirement. Here's the incentive: You need two things in order to explore your options—time and money. Extra cash can help you finance time off from your primary job to try out things you're interested in doing. "You're not going to stop life to reinvent yourself," says Pamela Mitchell, CEO of The Reinvention Institute. "So buy yourself more time by having enough cash on hand." The best way to save for this is automatically, a little at a time—just like you save for other important goals. Divert a percentage of your paycheck into a separate savings account earmarked for taking classes, joining networking groups, and building your skills. (One possible source of available funds: If your kids are moving toward independence, divert the money you were spending on their car and medical insurance, cellphone bill, and other living expenses into your exploration fund.) Then don't hesitate to spend that money to explore. "It's a lot cheaper to take a class than to go get a job and find out it's not a fit," Mitchell says. "It's a lot cheaper to take a trip to a place you might want to live than to move there and find out it's not a fit."

Step 2: Learn and earn.

Mitchell once had a client who was thinking about opening a coffee shop. Mitchell told her to go out and get a weekend job in a coffee shop in addition to her full-time corporate job. "You really need to allow for room to test your ideas," says Mitchell. "You need specifics." As a bonus: Any extra income you make becomes part of your exploration fund. The extra cash flow may also provide enough of a cushion that you can cut back on those full-time hours and devote more time to exploring. Perhaps most significant of all, Mitchell says, are the psychic benefits: "If you're too concerned about cash, that takes mental bandwidth away from the exploration process."

Step 3: Let your employer fund your education.

It's important to update your skills before you walk away from your paycheck, says Melinda Emerson, author of Become Your Own Boss In 12 Months. While you're still working, "You might be able to take courses [that the company will pay for], learn to use social media, or go through a leadership or talent development course," she suggests. Check with your boss and with your human resources department, and take advantage of any educational benefits or resources available to employees. At age 67, a former colleague of mine is now thriving in a public relations career, creating social media to change attitudes and behaviors for nonprofits with causes he believes in, after financing graduate work in digital communications through his former employer. If your employer doesn't offer educational benefits, keep in mind that many universities let you audit courses free of charge. With an authoritative listing of courses you can take, plus information on the fastest growing careers and scholarships at any age, LearningAdvisor, an education portal designed to help folks of any age reimagine their careers, can help.

Step 4: Be open to opportunities in your own backyard.

Before you take a giant step away from your current field, consider whether you can find satisfaction without setting off in a whole new direction, suggests career coach Valerie Young of Changing Course. For example, if you like your work, but you're looking for the freedom to be your own boss, look into becoming a consultant in your industry. And before quitting cold turkey to hang out your shingle (which of course you wouldn't do, having read steps 1 to 3 above), see if you can sign up your current employer as your first client. If your goal is to execute a more dramatic 180, look for ways to use your expertise to make the maneuver more gradual. A financial adviser interested in becoming a freelance writer, for example, could start by writing articles for financial journals, magazines, websites and blogs, thus compensating for lack of journalistic experience by providing valuable financial wisdom. Do an inventory of your skills and experience to see what might get your foot in the door of a whole new field.

Step 5: Consider hiring a coach.

There are two scenarios in which it's especially helpful to engage a professional to coach you through your exploration. The first is when you're struggling to figure out what you really want, says Mitchell, who is a certified coach. "A coach can guide you through the process and save you a lot of time and trial and error," she says. A coach offers a neutral sounding board and a positive yet practical perspective. As a result, you may come up with more creative options than you would have on your own—or you may find the solutions you are looking for more quickly. The second scenario is when you're in action mode—you're moving toward your next phase—but you need the sort of accountability you'd get from a boss (or from colleagues) in an actual job. In that case, a coach can help keep you moving forward and bolster you through the down moments, when you feel nothing is happening and might be tempted to give up. In other words: Provide a push. You can find a coach at, the website of the International Coach Federation. Pricing varies from about $100 a session to $1,000 per month, or more. Some coaches charge by the session, others by the hour or month. But many offer a free introductory session—which I highly recommend—if you'd like to see whether or not a particular coach feels right for you before you make the investment.

Step 6: Chart your courses.

For any job, career or lifestyle change (say you want to move from the big city to a farm in Vermont), you should understand what pursuing it full time would mean to your life in terms of salary, time at work, benefits and career trajectory. It's helpful to plot out each possible path on a spreadsheet so that you can compare plusses and minuses. Talk to people who are working in the field or living the lifestyle you're considering. Don't just stop at a single source, says Young. "I can't tell you how many people have gotten really bad advice from one person and allowed it to dash their dreams," she says. "The old advice to throw out the high score and the low score really helps here." To find people who have the knowledge you need, hop on the Internet. LinkedIn is particularly great for this. Make connections with a variety of folks who are working in the industry or living the life you're aiming for, and ask them for some details. If they are local to your area, offer to buy them coffee. You'd be surprised at how many people are willing to give you a little time.

Step 7: Practice living on less.

Finally, if you're headed into a field that's likely to pay you less than you're making now, increase your savings and slim down your spending—now. It's a similar exercise to the one that smart, soon-to-be parents use when one spouse plans to stay home following the arrival of their newborn. They bank the second income during the pregnancy and, voila, they've got a flush emergency cushion and nine months of experience living leaner. If you don't have a second salary to bank, bank part of your own. Start by journaling all your expenses for a month, then look at the ones you could divert into an emergency fund: lunches out, vanilla lattes, magazines that pile up, the weekly pooper scooper (OK, maybe keep him), the grocery store impulse buys you don't need. They add up. For help, use my worksheet to determine "Where You Stand Financially."

So yes, you can find a way to responsibly afford your dream, provided you lay the groundwork first. When money is the answer to pursuing your passion, then preparation, savings, discipline and determination will help pave the way—without question.

With Reporting by Arielle O'Shea and Steven Goldstein

Tags: investing