Financial Moves to Make When Starting a New Job
Starting a new job is an exciting milestone, but it also comes with important financial considerations. Whether you’re switching companies, relocating, or stepping into a new career, taking the time to organize your finances can set you up for long-term success. Here’s a practical checklist to help you navigate this transition smoothly.
1. Reassess Your Budget
Your new job may come with a different salary, benefits, or expenses. Take a close look at your income and adjust your budget accordingly. If you’re earning more, consider putting extra funds toward savings or investments. If your paycheck is smaller or if new expenses arise (like commuting or relocation costs), find areas to cut back temporarily.[1]
2. Understand Your Employee Benefits
Your benefits package is just as important as your salary. Carefully review health insurance options, retirement plans, and additional perks like stock options or tuition reimbursement. If your employer offers a 401(k) match, contribute enough to take full advantage of it—it’s essentially free money.[2]
3. Decide What to Do with Your Old Retirement Account
If you’re leaving a job where you had a 401(k), you’ll need to decide whether to roll it over into your new employer’s plan, transfer it to an IRA, or leave it where it is. Each option has its pros and cons, so weigh them carefully before making a decision.[3]
4. Set Up Direct Deposit and Review Your Pay Stub
Make sure your paycheck is going to the right place by setting up direct deposit. Once you receive your first paycheck, review your pay stub to check for accuracy in tax withholdings, benefits deductions, and retirement contributions. Mistakes happen, and it’s better to catch them early.[4]
5. Build or Replenish Your Emergency Fund
Any job transition can come with unexpected expenses, so having an emergency fund is essential. Aim for three to six months' worth of expenses in a savings account to protect yourself in case of job loss, medical emergencies, or other surprises.[5]
6. Review Your Insurance Coverage
Compare the insurance benefits from your new employer to your previous coverage. Health, dental, vision, and life insurance plans vary, and it’s important to ensure you’re adequately covered. If your new job doesn’t offer the same level of coverage, you may need to supplement with private insurance.[6]
7. Adjust Your Tax Withholdings
A change in income could impact your tax situation. Update your W-4 form to ensure you’re withholding the right amount of taxes. If you’re unsure how this affects you, consulting a tax professional could prevent a surprise bill come tax season.[7]
8. Continue Financial Education
New jobs often come with new financial opportunities. Take advantage of any financial planning resources your employer offers, such as financial wellness programs or one-on-one meetings with a benefits advisor. Staying informed will help you make the most of your earnings and benefits package.[8]
Making these financial adjustments early in your new role will help you build a strong foundation for long-term financial health. A little planning now can prevent financial headaches down the road and ensure that you’re making the most of your career move.
Sources:
FMG- AGE-7751020.1(Exp.3/29)