You even got a new job with a higher salary. That’s terrific! But wait….there are a few things to think about not that you have a new job. So before you go out and commit to a new house or car payment, or commit a deadly sin like charging to those credit cards, listen up.
Think about these moves to make right now.
1. Research our new Company Benefits.
You may have done some of this at the beginning of your job search. Most of us will look at health insurance and probably a 401(k). Get a grasp on what is available to you. What are the deductibles on the health coverage? Does the company provide a 401(k) match? Do they have dental or disability insurance? These are overlooked issues with benefits. Make sure you maximize them and use them to your advantage.
2. Rollover your old 401(k).
I can’t believe how often this happens. People get caught up in the new job and trying to impress, and before long, you forgot about that chunk of cash at your former evil employer! First, don’t cash it out and pay off expenses and bills. Do a direct rollover into an IRA. It will help you continue to have the tax advantages and you will avoid penalties and income taxes.
3. Check Your Tax Withholding.
Check your W-4 and make sure you are withholding the right amount. If you are making substantially more money, you may want to increase the withholding. You don’t want to be way over at tax time, and you certainly don’t want to owe more either! Luckily, this is one of the first pieces of paper you fill out at a new job so think about it.
4. Increase savings or decrease debt.
If you are making more money, consider increasing your emergency savings or retirement savings. Try to have at least six months of expenses in your emergency account. If you are trying to pay down debt, do the same with the extra income. Debt is a never-ending misery.
5. Go ahead, spend some. Give yourself a reward for the new job. Just don’t go crazy and commit to a bunch of new debt. You don’t want to increase the cost of your lifestyle, but you can go splurge a little on entertainment or your spouse and kids. Get something fixed around the house that you’ve been putting off.
Even if you didn’t make these moves right after a new job, you can still do them anytime. They just make a lot of sense while you have not committed that extra dough to maintaining your lifestyle. If you would like some help analyzing new company benefits or rolling over your old 401(k), write me at email@example.com, or call me at (859) 225-2596.