This post is sponsored by Lexington Law.
Starting a new job can be awesome, especially if you’re going to be making more money. But it’s so easy to fall into traps, spend more than you have and wind up with higher debt. Every time I switched organizations there was always something new to learn whether it be about the insurance, pay schedule, or retirement plans. Without taking the time to get everything in place, you not only can be losing out on money but get yourself in more financial trouble in the process.
We’re going to go over five ways to get your finances in check before you start your new job. These are easy things that you can do and will have a huge impact on your financial future.
Re-evaluate your financial plan
You’re most likely taking on a new role with a higher salary. The goal is not to use the new “extra” money to buy things you don’t need but to continue to live the same lifestyle until your debts are paid. This can also be a great opportunity to put more money towards savings, retirement, or an emergency fund. If you were already living a comfortable lifestyle, put your added income in a place that can enhance your financial future.
If you were looking to move into a new place or upgrade daily necessities, take it one step at a time. Don’t jump all in and buy new things or sign up for new monthly recurring bills just because you can. Just because you have more money coming in, doesn’t mean it has to go right out. Understand your new income and create a budget that allows you to pay off debts while putting money aside for the future.
Understand your health benefits
Looking at benefits can be extremely confusing, and the costs can be all over the place. In some of my jobs, we used my plan for the family and in others we switched to my husband’s. We looked at each aspect of the medical benefits (co pay, deductible, medication) before making a selection to ensure we weren’t spending more money than we needed and received the same level of care. For example, even though the monthly cost may be less, you might have a higher deductible plan which can result in high doctor’s visits, hospital stays, and prescriptions. It’s important to evaluate your new company’s options to ensure you’re picking the right one for you. You also want to see how much is being deducted from your pay and set aside some for your HSA or FSA to ensure you don’t break the bank if you get sick and need medication.
Re-evaluate your retirement accounts
If you’re switching from another company, you also have a few options of what to do you with your retirement accounts. It may be easiest to leave the funds where they are but if that company is closing or you want to diversify your funds, you need to have a game plan. Know how much you have in your original accounts, your contribution, and ensure that you’re making the same contribution in this new role. Check with your new company and make sure you’re taking advantage of their matching program to build up your retirement account.
Repair your damaged credit and pay off your debts
If your old job wasn’t cutting it or if you haven’t been employed in a little while, now’s the time to repair your credit and pay off your debts. You might have gotten yourself into credit card debt or had other issues that may have decreased your credit score. Pull your free credit report to review for inaccuracies and find out where you stand. Then talk with a professional, like the ones at Lexington Law for personalized assistance to help you understand your score, fix inaccuracies, and repair your credit.
If you have debts to pay off, create a budget and a plan of action. Assuming you’re bringing in more money, this is a great time to pay back what you owe. Don’t fall into a trap where you’re using the money for things you don’t need. You can automate your bills or automatically put money aside in alternative bank accounts that can be specifically used to pay off your debts.
Identify how and when you’ll get paid
This might sound obvious, but you want to know when pay day is and how you’ll actually get your money. When I started in one of my previous roles, they just transitioned to direct deposit and no longer gave checks. Since they hadn’t verified my bank account come pay day, they wound up sending me something that looked like a gift card with my entire month’s pay on it. I put in the “to be shredded” pile as I assumed, I would be getting paid via direct deposit and looked like a spam credit card. Had I not spoken to my HR person after not receiving the money, I would never have known what happened.
You also want to know if you’re going to get paid weekly, bi weekly or monthly. When holidays come around, will you get paid before or after the holiday? Is it the first Friday of the month or is a specific date regardless of the day of the week (1st and 15th of the month)? Many of my jobs I got paid once a month and I had to transition a lot of our bill dates to accommodate this new schedule. There’s nothing worse than bills being due and pay day hasn’t happened yet. Make sure you know what’s to come so you can plan as best as you can.
As you’re going on this new journey, check out the Lexington Law’s blog for additional resources. This article on picking the right health insurance for your finances can help identify what type of plans might work best for you. It’s important to educate yourself as much as possible and find professionals that you can trust like the ones at Lexington Law who provide personalized assistance that can help you repair your credit.
She provides training, consulting, and speaking services to organizations all over the world. She has an MEd in Social and Comparative Analysis in Education from the University of Pittsburgh and is a Gallup-Certified Strengths Coach. Her work helps to bridge communication gaps across generations, job functions, and geographies, and she has worked with organizations ranging from non-profits to multi-billion-dollar enterprises. She has delivered a TEDx talk on authentic workplace communication, and has been featured in media outlets including Forbes, ABC, FOX, and CBS. Her book, Humanize Your Workplace (Career Press), is set to release next year.