3 Steps to Take When You Start a New Job
Congratulations on your new job! Before you start planning what you’re going to be doing with that paycheck, there are a few very necessary steps to take. Walk through these three steps to make sure that you’re making smart money choices as you step into your new role.
1. Analyze Your Benefits
This part might seem daunting or tedious, but not paying attention and only skimming through those documents from Human Resources will mean likely leaving money on the table or paying for things you don’t even need. Make sure you read and understand everything your company offers, and when in doubt, ask your HR team to explain your options to you. Here are a few common benefits employers may offer:
401(k)
A 401(k) is a type of retirement account that is provided by employers. Take it from Theresa Raleigh, SHRM-CP, Jeanne D’Arc Vice President – Human Resources. “Starting a new job is exciting, and making the most of your benefits is a smart move! When it comes to your 401(k) plan, dive in headfirst. Take the time to understand all the details—what’s the employer match, what investment options are available, and how to make the most of tax benefits?”
Employees contribute their own money, usually written as a percentage of their income. Some employers will also match some of that contribution, growing your investment. For example, a company may have as one of their benefits that they’ll match 50% of employee contributions up to 6%. That means that if a worker at that company contributes 6% of their income, their employer will contribute an amount equal to 3% of that employee’s salary to their 401(k).
Raleigh explained, “Begin contributing as soon as you’re eligible; it’s like planting a seed for your financial future.” Starting early means that you have more time to take advantage of compounding interest. Raleigh recommends new employees be proactive when planning for the future, saying, “Here’s a pro tip: set up automatic annual increases to your contributions that align with your pay raises. It’s a painless way to gradually boost your savings and watch your retirement nest egg grow without even thinking about it.”
FSA/Dependent FSA
Some employers offer a Flexible Spending Account (FSA), which workers contribute money to and then can be used to pay for copays, deductibles, and other qualifying health expenses. The benefit to this type of account is that the money comes out of your paycheck pre-tax, so you save what you would have been charged income tax on. This is especially helpful for those who have a lot of recurring appointments or medications with copays. There’s also a version of this called a Dependent Care FSA that operates on the same principle, but funds are used on child or adult care expenses, such as daycare, after-school care, or transportation of a dependent by a caregiver.
Insurance
In addition to the more typical health, vision, and dental insurance, some companies also offer additional insurance plans you may want to take advantage of. These vary and can include accident insurance, life insurance, cancer insurance, or pet insurance.
2. Revisit Your Budget
Now that you’ve figured out what benefits you’ll be signing up for and how much will be deducted from your pay, it’s time to review your budget. With this new career opportunity, you may be benefiting from a raise in pay. If so, this is a great opportunity to make sure your budget matches your new wage. Your higher income could mean paying off debts faster or allocating more to retirement savings. Maybe your commute is shorter and the money you save on gas can go towards a future vacation instead. Even if you don’t have any significant changes to make, it’s a great idea to make sure your budget is still working for you from time to time.
3. Opt-In to Job Perks
Your employer also might offer many other perks with the job, so make sure to really pay attention during your new hire training. For example, two perks full-time employees at Jeanne D’Arc can take advantage of are student loan repayment assistance and an exclusive account for employees, EmergeStrong. Check your company’s benefits periodically to make sure you’re not missing out on any that you’d like to take advantage of.
Bonus: Don’t Give In to Lifestyle Creep
It’s really easy to start buying stuff once your paychecks start rolling in, from new clothes for the office to lunches out with coworkers, but don’t give in! Stick to your budget so that you don’t start spending that pay raise on frivolous things instead of using them to pay your debts or save more for retirement.
The first few days of a new job can be a lot to take in – learning a new commute, meeting people, filling out lots of forms, and learning new procedures – but take the time to review the benefits that you’re entitled to. Skimming through and not giving them your full attention could mean leaving hundreds or even thousands of dollars per year on the table.
If you’re looking for your next step and are searching for the place that fits you best, visit the Jeanne D’Arc Careers page. We’re looking for friendly, professional people to join our team to serve our community together. Find out more about us and our core values, benefits, and current openings on our website today!