So – you’ve got a new job. Congratulations! But before you run out and celebrate with your first month’s paycheck before it’s even been officially earned, there are a few considerations you need to make. Starting a new job is exactly the right time to get smarter about how you’re managing your money, and it’s super simple to make a few basic arrangements right now that will ensure your finances stay in tip-top shape as your job progresses.
Checklist Item #1: Automate Your Savings
If you’ve been putting off starting an automated savings account, now is the time to get it open and get on track to meeting your financial goals. Whether you’re saving up for a new household appliance or a hot-weather vacation once it’s safe to travel, an automated savings account will help. Starting a new job is a great opportunity to arrange for regular contributions to go into your account throughout the year via payroll reduction, so you’re basically saving without the stress and hassle of needing to make additional transfers between accounts. Check out HUECU’s Club Savings Accounts for more information on easy ways to save up for a specific need.
Checklist Item #2: Rebuild Your Budget
Whether you’re making more money or less money than before (hopefully it’s the former), a new job means a new paycheck, which means it’s time to rebuild your budget. If you don’t already have a budget, then you have the fortune of being able to start from scratch! All that’s important is that you do start, because maintaining a budget has major benefits for your wallet; helping you to pay down debt, save for important purchases, and manage your regular spending with more smarts. With so many new things to learn during the first few weeks at the job, it can be easy to let budgeting fall by the wayside – so aim to get your budget in order before you kick off the new job.
Checklist Item #3: Review Your Retirement Options
Most jobs offer some form of retirement savings, such as the 401(k). When you change jobs, you have the option to keep your savings in your former employer’s plan; or, you can roll-over that money into the plan offered by your new job. There are advantages and disadvantages to both approaches. If you’re quite happy with the old plan, you might be best off leaving your money there, but you’ll still need to keep track of the account, possibly for a number of years. Then again, consolidating your retirement savings makes it much simpler to manage these funds, as long as your new employer has a robust retirement plan. It’s not a bad idea to speak with a retirement expert if you have any questions about what’s the best move for you.
Checklist Item #4: Set Spending Limits
Similar to building a budget, when starting a new job it’s also a good idea to set spending limits for yourself. When we start a new job with a shiny new salary, it can be tempting to spend above and beyond what we really need. Having a budget and sticking to it can help you avoid this so-called ‘lifestyle creep’, and simply recognizing the issue will go a long way toward preventing it from becoming a problem. The importance of saving money and maintaining healthy financial habits is especially importance during our current economic situation, with unemployment facing record highs. So enjoy your new job and feel free to celebrate, but at the same time, make sure you’re maintaining an appropriate-sized nest egg for the future so that you’re prepared no matter what.
Checklist Item #5: Become a Benefits Expert
While you’re busy becoming an expert at your new job, take some time to become an expert on the benefits as well. Too often, employees focus only on their salary and forget to make the most of great workplace benefits like shopping discounts, gym memberships, and other extras on offer. If you can make use of these benefits in a smart way, you can reduce your own out-of-pocket spending and effectively increase your salary. Another important benefit to make use of is health insurance. Put in the effort to thoroughly review and understand your job’s healthcare policy and ensure it offers enough coverage so that if the worst should happen, you won’t go broke paying for a critical medical expense.
