After all the effort you put into interviewing, you finally did it. You beat out the competition and got the job.
Whether you work in the cybersecurity industry sector, healthcare field, or something totally different, congratulations are in order! This is an exciting moment in your life.
It’s also a busy time of your life. Not only do you have to settle into your new position and learn the ropes, but you also have your budget to think about.
Whether you agree to a pay cut or manage to clinch a larger salary, you need to adjust your budget to ensure it reflects your new wage. If you do just this, you’re already in a better financial position for your new job. But if you want to set yourself up for success, follow these tips:
Beware of Lifestyle Creep
Now that you earn more, you can easily spend more. There’s nothing inherently wrong with this; you earned that money, and you should use your wages to make the life you want.
Ideally, you gradually add expenses after thinking about your budget, rather than diving headfirst into a new car, home, and other big purchases. This can kickstart a lifestyle creep that encourages you to keep spending until you lock all that new income away in car loans, mortgages, and personal loans.
Next thing you know, you’re living paycheck to paycheck, lacking emergency savings, and no better off than before your new job.
Increase Your Emergency Fund Savings
When it comes to savings, a popular rule of thumb is to save 20% of your income. That’s according to the 50/30/20 budget, which earmarks 50% of your income for essential bills, 30% for wants, and 20% for savings and debt payments.
Now that you have that covered, it’s time to figure out what 20% looks like with your new salary. Sit down with your budget to figure out how you want to split up that 20% over your emergency fund, retirement savings, and debt payments.
Be careful when dealing with debt. The 20% covers payments that go above and beyond your scheduled payments outlined in your direct deposit loan contracts and the minimum payments on your lines of credit or credit cards. The scheduled, minimum payments fall under your essentials.
Before you start paying more than what’s expected on your online direct deposit loans or lines of credit, double check with your lender if this is allowed. Most lenders want you to repay them as quickly as possible, but there are some outliers who will penalize borrowers for extra or pre-payments.
Set Up Employer Saving Accounts
If you’re being hired by a legitimate employer, they will have several savings programs in place to help you hit your savings goals. Talk to your HR or hiring manager about whether they have health savings accounts, employee savings accounts, and 401(k) matching.
Register for any savings program available, especially when it comes to 401(k) matching. You want to hit your employer’s match limits to maximize your retirement savings.
Starting a new job is not just about adjusting to a different workplace — it’s about making sound financial decisions that set the stage for your future. By prioritizing these financial chores, you can navigate the transition with confidence, ensuring both professional and financial success in your new role.
Good luck in your new position!
