A new job confronts a worker with many changes. There is a new commute, a new set of personal relationships, a different company culture, and a new set of responsibilities. The challenges keep coming and coming. But instead of only reacting to what your job is putting on to your plate, you could also use this moment as an opportunity to improve how you manage your finances.
Here are a few things that you should do:
· Create a new budget. It goes without saying that all of your expenses are about to change. You will have new costs for housing, transportation, utilities, and just about everything else. If you are not careful, you may squander the benefits of a raise.
· Upgrade your bank account: If you already have a bank account, you will still want to determine if it is still the right account given your needs. It may be the case that the bank that worked for you before will no longer offer the right combination of services and convenience. It may be the case that you were living with a sub-optimal account anyway, so before you start to direct deposit your paycheck into another less-than-ideal bank account, you could take the time to search for a better one. If you do not have an account, we recommend that you pick one at WiseWage.org. The only accounts that appear on WiseWage have passed our muster as “best-in-class” products. The most you can pay for any account on WiseWage is $4.95 per month. In some cases, the accounts have no maintenance fee if you set up a recurring direct deposit into the account.
· Make a financial center inside your home. You should have a place where you keep all of your statements, tax forms, and other important documents. Filing cabinets are an excellent way to store documents.
· Check your credit report: You may find that potential will landlords will want to check your credit as part of the application process. Landlords pay fees to conduct these background reviews. Some might reduce your application fee if you produced your credit report voluntarily. Note – your credit report is far more detailed than your score, which is only a number. A credit report will detail the status of all of your credit accounts. It will reveal any judgments, liens, or defaults on your record. Checking your report is always a good idea. If you see that there is incorrect information on your report, then you can ask the agency to change the misleading data. There are several places where a consumer can access a credit report for free.
· Find out if any of your moving expenses are tax-deductible. Many people don’t realize that IRS will let you deduct moving expenses under certain conditions. Your new job location must be more than 50 miles further from your old home than the distance from your previous home to your old job. For example, if you used to commute 6 miles to work, then your new job must be more than 56 miles from your previous residence. As well, you will have to stay at your new job. The IRS will want to see that you worked full-time for at least 39 weeks over the course of your first year at your new position. Moreover, you’ll have to start work soon after you arrive in your new community. Note: if you are a member of the Armed Forces moving because of a change in your permanent station, then you do not have to meet the distance and time tests. The IRS has the details on this page.
Please consider one of the great debit card accounts offered at WiseWage:
Pick a neighborhood with a grocery store, preferably one located on your commute. How you eat makes a significant impact on your budget. If you can reduce the difficulty of getting to the grocery store, then you are all the more likely to have more food in your house. Your finances will appreciate it. After all, the cost of eating at home is dramatically less than the expense of eating out. In 2015, for the first time since the Census Bureau began to keep this data, Americans spent more in eating and drinking establishments than they did at grocery stores. If you can stop off to pick up a few things on the way home from work, then you are far less likely to eat out. The price of food in grocery stores has not increased much lately, perhaps because large retailers (Wal-Mart, Target) have expanded their inventory to include groceries. But it is becoming harder and harder to find a meal for under five dollars. You will also benefit in other ways. For one, because restaurant food tends to be higher in saturated fat and sodium and lower in fiber, you may enjoy a slimmer body.
· Don’t pay to move stuff you won’t need: Moving is a great time to declutter your life. Your old place may have been full of things you never used. Why pay to have someone move your old stuff into your new apartment? You may be able to save on your taxes if you donate items to a local non-profit. Alternatively, selling a few of your unneeded things on Craigslist could produce some extra cash to cover some of the costs of moving.
· Buy renter’s insurance: Only about one of every three tenants has a renter’s insurance policy. The average cost of a policy covering $30,000 in property is only about twelve dollars per month. Rest assured, your landlord has not taken out a policy on your behalf. If the pipes burst in your home during a cold snap, the damage could destroy your electronics, your furniture, and your clothes. A fire could destroy everything. On the other hand, twelve dollars is less than the cost of one round of drinks.
· Quit smoking: Sure, this is easier said than done. But wouldn’t it be great to live in an apartment that doesn’t smell like smoke? Wouldn’t it be great to have a wider choice of places to live, and not just a few apartments that allow tenants to smoke? In the last few years, many states have decided to increase cigarette taxes to help balance their budgets. As a result, smoking costs a lot. Depending on where you live, a pack-a-day habit costs between $1,645 and $3,822 per year. The Mayor of New York recently proposed to raise the price on a pack of cigarettes to $13.00. The savings multiply when you consider additional costs for health and life insurance.
· Review your benefits package. If you have health insurance, do the research to find in-network providers. Remember that you may have to pay for a substantial portion of your medical expenses before you exhaust your deductible.
Think of change as an opportunity. With a good plan, you can convert an increase in income into an increase in your savings. Even if your earnings are slated to go up, you will not get ahead unless you can control your expenses. If a new job requires a move, then you will need to be extra careful. Will you be moving to an area where the cost of living is higher than your current hometown? Cost of living calculators, available from many sources, will give you an impression of the impact that a move could have on your finances. You may find that even with a raise, your standard of living may go down.
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