Have you recently started a new job? Are you entering the workplace for the first time? If you want to make the most of your opportunity then these money tips for starting a new job are for you.
Starting A New Job Off Well Financially
When you are starting a new job you likely have a lot on your mind. You have to learn new systems, meet new coworkers, and find your groove in a new environment.
It’s easy to push aside paperwork and not worry about your money.
You will be getting a paycheck regardless, right?
When you start a new job it’s the best time to evaluate your financial situation and make money moves. If you take the time follow these money tips you’ll be setting yourself up to win financially for a long time.
6 Money Tips For Starting A New Job
The following money tips are things I always suggest for people starting a new job.
If it is your first job ever then it is even more important to do these things when you start working! This will change the course of your life if you start early.
Sign up for your 401k.
When you start a new job you are often eligible for contributing to a 401k plan. This is something you should sign up to do as soon as you are eligible, especially if your company offers a match.
A 401k match is when your employer matches your 401(k) contributions by also contributing a certain amount to your account based on what you have contributed.
The average 401k match is 4.3% of a person’s pay.
When you start a new job you should immediately contribute enough to your 401k to get that employer contribution. Not doing so would be like saying you don’t want an additional 4% of pay from your employer.
Many people call the match “free money” but it’s actually just part of your compensation package. Your employer offers it as long as you take the action of signing up and contributing to your 401k.
You should always do this even if it feels like you can’t “afford” to at first. That employer 401k match is the best return you can get on your money.
Set up auto-draft for savings from your paycheck.
One thing that helps many people to save more money is to set up automatic drafts from their paycheck directly to savings accounts.
Many employers offer the ability to set up direct deposits to multiple accounts. You can select a certain percentage like 10% of your paycheck to go directly into a savings account.
Setting up auto-draft savings helps many people save money because the money they don’t see is money they don’t spend.
If you can’t set up the direct deposit at your employer to do this then you can always set it up at your bank. Set up an automatic transfer for your payday to move money from your main checking account to a special savings account.
This is so helpful to do as soon as you start a new job because you won’t miss that money. It will never be part of your regular spending and you’ll be able to save up money faster.
Make a budget.
When you start your new job you should make a budget for yourself.
This budget should be based on the amount you will be bringing home after your taxes, 401k contributions, and your automated savings.
If you’ve never budgeted before, here is a helpful video to show you the basics:
There are a number of ways to budget including spreadsheets, apps, and by paper. I personally prefer writing my budget out on paper because of the benefits of achieving goals you write down. When you write out your budget your brain processes the information differently and that helps you better stick to your plan.
At the very least, plan to track your spending with an app like Personal Capital or Mint. Having an idea of what you are spending per month can help you avoid a financial mistake like spending more than you make.
Research your benefits.
Do you know all the benefits that your company offers? Most people don’t but taking time to research your benefits when you start can help you win big.
You probably know about the health insurance or even life insurance offered with your new job. But do you know about all the other benefits?
Here are some common job benefits your company might offer:
- Health insurance
- Disability insurance
- Dental and vision insurance
- Life insurance
- PTO/paid holidays
- Retirement planning
- Paid family leave
- Paid gym memberships or fitness equipment
- Remote work or flexible schedules
- Student loan repayment
- Continued education and professional development
There are many different potential benefits that your company may offer. It’s up to you to learn about these and take advantage of the ones that might benefit you the most.
The best time to do this is when you start the job so you can get all the benefits as long as possible.
Learn what your health insurance plan covers.
Your health insurance is likely something you won’t think about until you need to use it. However, it’s a great idea to get acquainted with what your plan offers.
Look over your health insurance benefits and ask some questions:
- What is your monthly payment?
- What is your yearly deductible?
- How much do you need to pay if you go to the ER?
- Which hospitals and doctors are covered by your insurance?
- How much will your prescriptions cost?
Figuring out these numbers will help you figure out how to budget. You’ll know if you will you need to save up a medical sinking fund or will be able to cash flow most expenses.
It’s also helpful to know where your health insurance is and how to access it later when you do need the information.
Take your time making big purchases.
The final thing on this list is perhaps the most important: take your time and don’t rush into big purchases.
Do not go out and buy a car or a house as soon as you start a new job. Do not quickly rush into these decisions that will have ramifications for years to come.
Doing anything that takes part of your income each month should be a big decision.
If you are thinking about a big purchase like a home then do some research first. Learn as much as you can while you adjust to the new job and also build up savings with your new income.
Here are a few helpful posts for potential home buyers:
- First Time Home Buyer Tips
- Are You Ready For A Home Mortgage?
- 4 First Time Home Buyer Mistakes We Made
Whether it’s a new car or a new home just make sure you are being thoughtful and considering all the impacts on your new income.
Hopefully these financial tips for starting a new job have you starting off on the right foot!
Mary is the founder of Pennies Not Perfection where she shares her journey to build wealth through online income. She quit her day job in 2021 after she paid off her debt and doubled her 9-5 salary.
Mary's favorite free financial tool is Personal Capital. She uses their free tools to track net worth and work toward to financial freedom.