If you just got a new job, be sure to celebrate first, and then take note of some important money tips to remember when you first start your job. It is so easy to go a little crazy when you first get a job making more money, or getting more hours, raising the amount on your paycheck. You’re on an endorphin high, and spending that hard earned cash, is all you can probably think about. New clothes, jewelry, maybe a bigger purchase like a car, computer, iPad, iPhone,etc. are all typical things many people “celebrate” their new job with. To prevent yourself from creating a new cycle of debt and make that money work for you, not against you, keep these money tips to remember in the back of your mind when you get that promotion or new job.
1. Save First
The most important of all money tips to remember when starting a new job is to save some of those hard earned funds first. Save as much as 20% of your paycheck if you can for a rainy day, or put it into a retirement fund through your company. Saving pays yourself for the future, and there’s absolutely nothing more rewarding than that.
As mentioned, if your company has a 401K program, be sure to invest it in as soon as possible. This makes your company work for you, just as much as you work for them. By putting this into an interest free investment plan, it means a portion of your dollars are vested in the company through the stock market, helping you make money. You can’t lose what you don’t put in, so there’s no risk at all. The worst thing that could happen is you don’t make much off the stock. When you go to remove the funds at the beginning of retirement, or when you leave the company, you’ll get back everything you put in, plus whatever the stock made. Sometimes penalties occur with early removal, so be sure to stay with the company as long as possible.
3. Spend Smart
There’s nothing wrong with going to buy yourself a new outfit for your first day, or even getting a more reliable car if you have a commute, but spend smart. Don’t buy a whole new closet worth of clothes and go broke trying to pay for it, or get a car that is out of your price range. Be smart with your money and you’ll enjoy your job, and spending your money, more.
4. Be Economical
When you get a new job, try to be as economical as possible. Eat your lunch at the office instead of eating out each day,and if your job is within walking distance, or there is a nearby train you can take to work, consider that instead of a car. This will save you money, and possibly give you more exercise too.
5. Resist Happy Hour
If your new colleagues go out for cocktails during happy hour every night after work to unwind, be wary of making it a habit just to fit in. Go once a week, but not everyday to avoid spending unnecessary money on drinks and appetizers, when you could come home and enjoy a home cooked meal and nice glass of wine instead.
6. Be Tax Smart
When you get a new job and fill out a W-2 upon hiring, be tax smart. It might not be a bad idea to go ahead and save through your paycheck, which you’ll get back through your taxes. Those funds will either come back to you through your taxes, or you can use them to pay towards your taxes if you owe. Also be sure your dependants are right, so what you take out will be what you need to bring home in terms of money. Depending on how many you claim for, you’ll either bring more money home now, or get more back at tax time. Decide what’s right for your budget when you fill out your W-2, and remember, you can change it at anytime.
7. Ask about Health Insurance
Lastly, you should always ask about health insurance when starting a new job. Most places of employment have a 90 day waiting period before they offer you part time or full time insurance. After the waiting period is up, be sure to sign up for a health insurance plan that is fit for your budget. You may not need the most expensive package. Getting health insurance is important as a precaution, just in case of an emergency, to ensure you receive care and don’t end up going into debt over it. Be sure to select a deductible that is right for you as well. Some insurance companies offer high and low deductibles, or both. High deductibles mean you’ll have to receive a certain dollar amount of care before the insurance kicks in, and you’ll have to pay until then for all care received. A low deductible, which usually costs more per month, means you’ll have to meet less of a dollar amount of care before insurance kicks in. If you don’t usually go to the doctor and don’t have a lot of money to spend on insurance, select a higher deductible, yet if you have medical costs on a regular basis, it might be best to select a lower deductible instead and pay more a month. If your company doesn’t offer health insurance, go online to healthcare.gov to get a low cost insurance plan provided by the government.
If you’ve just started a new job , congratulations, and I hope these tips will be helpful! Also, if you have some money tips for the rest of us, please feel free to share them! What’s your best money tip when starting a new job?