If you’ve taken a new job as a step up in your career or you’ve received a promotion at your current company, you’ve also very likely received an salary increase. Congratulations — that’s great news.
But before you get too far into your celebrations, take some time to review your finances, your financial plan, and your future goals so that you can make the best decisions with your money. Keep these four points in mind and you’ll be on your way to making the most of your new and improved salary.
1. Maximize the company’s benefits.
If you’ve taken a new job, don’t skate past the introductory parts where you learn about the company’s benefits. Most companies offer benefits that can boost your bottom line, but you can’t take advantage if you’re not fully informed.
Abigail Gunderson, CFP®, a financial advisor for Tanglewood Wealth Management, has a simple suggestion: Do not skip the company’s first HR meeting. In that meeting, you can learn about benefits that are essential to keeping you financially stable now and in the future, like long- and short-term disability, health insurance, and retirement plans.
Most importantly, don’t let your eagerness to jump right into your new role distract you from the importance of planning for your future. “When people start new jobs, they’re usually excited to get into the work, and this can mean a lack of focus when it comes to sitting down with the HR department to set up a retirement plan,” Gunderson says. “And when these conversations are rushed, it can have a big impact down the line, as we know that even a few percentage points a year can make a significant difference in long-term savings.
”When it comes to setting up your 401(k), Gunderson recommends asking the following questions:
Do the available funds offer institutional shares?
Are less expensive share classes of funds available?
What are the self-directed options?
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