Changing jobs is nothing unusual, but remember that when choosing this option, one must have an appropriate career plan.
Career planning is not an appalling task; you don’t have to avoid it or put it off. Career planning can start by providing goals in your current career or even beginning with a new changeover to the existing current career path. Planning your career should always be a positive experience.
Changing jobs can open new ventures and challenges, but it’s important to remember to maintain your financial track while doing so. Let’s take a look into the financial issues that come along with a change in your career.
o Open direct deposit- Many employers are offering direct deposit as a perk and time saver.
o Benefits- Understand the benefits offered by the new employers when you change your job, no matter what the reason for change is. Do this, and while signing up for your new job you will clear all your doubts about health coverage, retirement savings plans, and additional benefits.
o Expenses- Limit your expenses for a few months; you will be surprised at the savings! While negotiating, do not forget the dollar figure is the gross pay and not the net pay. It may sound obvious, but people tend to start spending considering their gross pay without considering the net take home salary. Remember that taxes, retirement contributions and health insurance payments will all affect your salary structure. Try and use the interactive spending work record sheet!
o Manage 401(K)- Always manage your employer-sponsored retirement plans accumulated in your last job. You might be tempted to use the amount but don’t do so; you will have to pay income tax or early withdrawal penalties assuming you are not retired. Ask your new employer about the prospect of 401(k) and 403(b) plans and then consider rolling the previous amount into it or trying to transfer the old plan into a new retirement plan.
o Consider range of options- Before changing jobs look into your financial status and also consider the job market. Think about medical emergencies, and don’t opt for a job that does not cover health insurance as catastrophic medical costs can sometimes lead to bankruptcy. Besides health insurance, be prepared for the change in lifestyle and also understand the new work environment. Disability in income coverage is a necessity. It is tempting to ignore these issues, but don’t do so! Negotiate for them in your new position.
o Review your financial goals- Don’t go ahead without a proper goal. Analyze where you would like to see yourself five years from now. Money trade-offs must be expected and answers to such questions are sometimes complicated.