Financial Management: 7 Tips for a Newly Hired Worker : Under30CEO Financial Management: 7 Tips for a Newly Hired Worker : Under30CEO
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Financial Management: 7 Tips for a Newly Hired Worker

| October 3, 2013 | 1 Comment

Financial Management

Getting hired for a new job is really exciting and definitely a testament to your continued progress in life. But don’t let that success go to your head. There are some things everyone should do when hired for a new position. Here are a few of them.

Set Up a Budget

A new job means new income, and chances are that cash flow will be different from your old job. A wise first move would be to plan how this change in income will affect your daily spending. Also take into account other factors such as how much gas you’ll be paying during your new commute, and any work-related expenses (uniforms, equipment, etc). Also re-evaluate your monthly payment schedules in regards to outstanding debt and loans, as well as how your new income will help you achieve long-term goals.

Have a Rainy Day Fund

While you’re working on that budget, consider developing a savings contingency plan. Say, worst case scenario, your new job doesn’t work out after a few months. If you start putting money away with each paycheck into a safe place like a money market or savings account, you’ll have enough cash to live off if you suddenly find yourself jobless. Just put some money away each month until you have about five months of living expenses in the bank.

Get Direct Deposit

Going to the bank and physically depositing your paycheck can become a massive headache and inconvenience. Many people have a tough time getting to the bank during business hours. After-hours deposit boxes aren’t as secure either. Direct deposit eliminates this hassle, and can also make it easier to save money. Oftentimes you can designate two bank accounts for the deposits to go into. You can have a certain percentage or dollar amount of you check deposited into your savings account, and the rest added to your checking account for spending.

Unless you have a crush on a bank teller, save yourself the trouble and secure the prompt and safe delivery of your pay with direct deposits. You’ll be glad you did.

Sign Up for Health Care

Nobody is invincible. Even if you’re in the best shape of your life, there’s always the possibility you could contract some grave illness or injury. Medical visits for even the most routine or simple procedures can result in astronomical bills that’ll take a huge chunk out of your wallet, or worse, put you deep into debt. Find out what services your employer offers. Ask about dental coverage as well. Find a quality dentist in Norman, and keep those pearly whites sparkling.

Start Planning for Retirement

If you haven’t started socking money away for retirement, start as soon as possible. How much you put in isn’t as important as starting early. This will allow compound interest to kick in. See if you employer offers some sort of 401(K) plan. Contribute the largest amount your employer is willing to match (hey, it just means free money for you). If they don’t have retirement plans, open up your own traditional or Roth IRA. Be sure to actively investigate your investment options as well. Invest in high yield/high risk if you’re young, and more stable fixed-income investments when you’re older.

Get Out of Debt

Now that you have a new source of steady income, it’s time to take charge of your outstanding financial obligations. The longer you wait to pay them back, the more you’ll end up paying in interest, plus you’ll be at a higher risk of paying late fees or worse — bankruptcy. The sooner you get out of the red, the better. On the same note, carefully consider the pros and cons of major purchases before you make them.

Understand Your Tax Obligations

Depending on how much more money you’re making now, you ought to take the time to investigate whether your tax obligations have changed. In short, figure out which bracket you’re in. This would also be a good opportunity to see how taxes apply to your different 401(K) or IRA investments.

Starting a new job is an exciting and wonderful process, even more so if you carefully plan and manage your next steps. If you follow these seven bits of advice, you’ll be leaps and bounds ahead of other new hires that don’t put in any planning.

Dylan Adams is a freelance writer specializing in business finance, health and mobile technology. When he isn’t writing he is working part-time for a dentist in Norman and playing video games.

Image Credit: Shutterstock.com

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Category: Entrepreneurship, Personal Finance

  • michael bian

    Really liked the article! Suit to all newly employed individuals. Thanks ~