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New Job? Make These 4 Financial Decisions Immediately

New Job? Make These 4 Financial Decisions Immediately

October 04, 2021

When you start a new job, don't let your excitement keep you from setting yourself up for financial success with your new employer. The financial planning experts at Summit Wealth Group are here to help you sharpen your financial skills as you focus on improving your professional skills. Prioritize these four tips as you get settled at your new job.

1. Manage Your Insurance Switch

According to BLS, in 2020, companies paid roughly 90% of medical care premiums for single coverage plans. If your old company offered employee disability, health or life insurance, wrap up your old coverage carefully. Rather than continue with your former employer's plan, it could make more sense to switch to your new company's plan if you'll have the same or better coverage. Speaking with financial services professionals could help you make a well-informed decision.

If you switch insurance providers, contact your current company to let them know. You don't want to risk unpaid premiums or bills hurting your credit score. Determine whether you should consider financial planning for a gap in coverage while switching companies.

2. Start an Emergency Fund

If you don't already have an emergency fund or savings plan for emergencies, put one in place for your new job. You hope for the best with your job and financial life, but you never know when a single event could serve a severe blow to your financial health. If you already have an emergency fund, keep devoting a portion of your salary to it. Depending on your difference in salary, you may need to adjust the percentage of earnings you devote to your emergency fund. Even if you never find yourself in dire financial straits, knowing you have an umbrella can bring you great peace of mind.

3. Submit Your W-4 Form

Note whether your tax liability changed when you switched companies. Perhaps you make more money in your new position. If so, work with a financial planning professional to determine how much more to request your new employer withhold from your earnings. Other than changes to your W-4, you could also need to change your claimed allowances to sidestep a massive bill when the next tax season rolls around.

Did you take a few months off between jobs? You could need to ask your new employer to use a part-year withholding strategy. That way, you don't have more withheld from your checks than necessary. 

4. Enroll in Your New Company's Retirement Plan

The ADP Research Institute notes that nearly 80% of workers strongly consider retirement plans and other benefits when deciding whether to accept a new position. If you're among that number, prioritize enrolling in your new company's retirement plan. Before signing up for a 401(k) or something similar, familiarize yourself with the fees. Try to enroll sooner rather than later, as you want to maximize your savings as quickly as possible.

Hopefully, these points give you a better idea of what to prioritize for the first couple of weeks in your new position. For more useful financial planning tips, contact a Summit Wealth Group representative at 719-633-4033 or via online form.