It’s a lot of work to find the job that’s perfect for you. Ideally it will have some combination of doing what you enjoy, providing for your financial needs, and helping you develop a career path. And not everyone sticks the landing on the first try! Or even the second! And so on… changing jobs can have a major effect on your personal financial situation if your wages increase, your benefits change, or the cost of your commute and other associated expenses might decrease. But the transitional part of your effort to change jobs can also pose some financial stresses. Here’s how you can identify and avoid some of them.
Before leaving your old job:
- List all monthly income and expenses to see where your budget stands.
- Evaluate your health insurance coverage – what benefits are you afforded and when will your coverage expire?
- Ensure that unused vacation/sick pay and any other compensation that may be due is paid out to you.
- Understand how long you have to exercise any vested stock options if they exist.
- Save all documents related to your separation from your former employer; make sure your former employer has your new address (if applicable).
- Develop a budget that will cover your expenses while you’re not receiving a paycheck between jobs. Your goal should be to get by with the money you have vs. going into debt to cover non-essential purchases.
Once you start a new job:
- Review your new employer’s benefits package and take advantage of all that’s being offered to you. Small benefits can add up to big savings.
- If a pension or retirement plan is offered, sign up as soon as you’re eligible: contribute at least enough to get the maximum employer match amount offered.
- Request direct deposit for your paycheck.
Dreams and Details – Other Considerations
- Some job transitions will require additional training, education or certification. Consider the longer term investment you may need to make in this training: what will it cost? Can you pay it off in a timely manner?
- Consider the value of your employment history when it comes time to apply for financial products or services. Being able to show a stable and lengthy employment history is likely more important to a lender than the fact that you’ve only very recently secured a more lucrative job.
- Financing the transition to a new career can be a leap of faith, but you can do a lot of research and planning to give yourself the wings you need to succeed. Minimizing your external risks such as debt, credit score and collections will be a major part of creating the support structure you need. Feel free to contact us at Progressa if you have questions about how we can help you plan for changes to your personal financial picture.