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How to Start Your New Job with Savings in Mind

A recent job report by the Bureau of Labor Statistics showed that American workers hold an average of 5.5 jobs during the years when they are 18 to 24 years old. In today’s favorable job market, the average worker now changes jobs 10 to fifteen times during their career.

Whether you’re a recent graduate or just changing employers, job transitions require a lot of decision-making and paperwork. Wherever you are in your career, there are few things you should consider as your job’s start date approaches to help you on your path to savings.

This post will offer up six questions to ask yourself as you prepare for your new gig:

1. When was the last time you updated your budget?

When you start a new job, you’re uniquely positioned to review your budget. Chances are this job change is bringing more money into your monthly coffer, and it’s important to make a financial plan before your first paycheck arrives.

Here are a few questions to guide your budget update:

  • When will your first paycheck arrive? This is an important piece of information to have on hand. Once you have your start date, feel free to direct this inquiry to the HR department along with any other questions you have about enrollment and onboarding.
  • Are you prepared to cover your expenses until your first paycheck arrives?
  • Will you have any moving expenses? If so, will your employer be covering any of these?
  • If you have them, will this new job impact any of your regular childcare costs or commuting expenses?

If your new paycheck is bigger than what you were bringing home before, revise your budget with small changes to your monthly spending habits. Keep your housing costs low, and avoid taking on major expenses that you would have to drop if you were unexpectedly unemployed in a month or two.

One of the best things to do with the new “extra” money is to save it. Use the SMART strategy to save for something big or put it in your retirement account. Speaking of which…

2. How’s your retirement fund doing?

If you don’t have one yet, look for an opportunity to open a retirement account. Many employers offer the option to open a 401(k) account or a 503(b). If you have the chance, take advantage of employer matching offers – this can be a great source of workplace savings.

The miracle of compound interest can only work for you if you start using it: the sooner you begin saving the better. Even if you can only put away one percent of your paycheck each month, it will grow over the course of your career into money you’ll be glad to have in your old age.

If you already have a retirement account, take a look at how it’s doing. If you’re moving off of an employer-sponsored plan, you’ll need to do some research into rollover costs and fees associated with account maintenance, but it’s better to get this out of the way sooner rather than later.

3. What budget-friendly programs are available through your new employer?

These days employers often include financial health and wellness opportunities as a low-cost way to support employees. And these are great benefits.

Pre-tax commuting benefits are a common way that employers offer to help. By cutting out the taxes you’d spend on getting to and from your job, you can increase your monthly savings toward something bigger.

Your new employer may offer a high-deductible healthcare plan with a Health Savings Account (HSA) or insurance plans that can be paired with a Flexible Spending Account (FSA). Don’t discount these opportunities to save money.

Knowing how to make the most of your healthcare plan is something you may need to read up about, but the annual savings can relieve pressure on your budget.

4. Are you prepared to transition off of your old benefits?

It’s important to take stock of your current insurance benefits and healthcare needs before you move off of your current plan. Your answers to the following questions may add to your to-do list, but your health is an integral part of your ability to perform at your new job. Ask yourself:

  • Are there any benefits you can take advantage of or get more out of before you switch over to a new insurance plan? For example, if you haven’t ordered contact lenses this year or made use of an optometry benefit, you may be able to get a very affordable pair of glasses before your benefits expire.
  • Do you have any regular prescriptions? Do you have documentation for all your prescriptions? Are there any you need to refill in case there’s a delay in the start date of your new coverage?
  • Do you have an HSA? If so, consider rolling it over, closing it out, or spending what you’ve saved this year.

If you’ve been without insurance, don’t sit back during your onboarding process. Be sure to ask questions: figuring out which providers to go to may seem complicated, but you’ll be presented with great free resources to help you navigate this during the onboarding process.

Your HR professional and new coworkers will be happy to help you figure out which providers are in your new network. The trick is to be proactive: reach out and ask for help if you need it.

5. Have you updated your emergency financial plan?

It may seem like your new job will last forever (and that’s often how they’re pitched), but you never know where life may lead you. As part of your budgeting effort, you should also update your emergency financial plan to make sure it reflects your current needs.

Conventional wisdom says that you should have enough saved up to cover your basic costs for three to six months without a job. If your monthly spending changes after you begin your new gig, be sure to revise your emergency plan and savings accordingly.

This may also be time to consider employment insurance to help cover you in the event of an unexpected job loss or disability.

6. Have you updated your address?

This may sound like a small detail, but it is important that you update your contact and account information before changing jobs.

Missing emails or paper mail can result in administrative issues that may result in fees or fines. If you have outstanding claims on your prior health care plan or an HSA account where you’ll begin accruing monthly fees, it’s important to your financial health that you stay on top of your paperwork.

Check to make sure all your health and wellness benefit providers have your latest contact information: this includes your mailing address and your email address.

If your old logins are tied to a previous employer or an educational institution, update your health and wellness accounts so that they are attached to an email address that will remain active after your old email address expires.

Congrats on Your New Job

Get excited and stay excited. Your new job is a great opportunity for growth, personally and financially.

If you’re feeling overwhelmed by the choices you’re faced with as you make this transition, read up on financial health.There are plenty of resources available to you online. And you’re in the driver’s seat. Good luck on your first day!