Financial Mistakes To Avoid When Starting A New Job

Starting a new job is an exciting time which is often accompanied by a sense of achievement and hopefully a better financial future! However, this transition can also lead to common financial mistakes if not managed carefully so it is good to be already aware of any potential pitfalls that you may experience.

One of the most common mistakes you can make when starting a new job is to overlook the benefits package that your new company may be offering. Many new employees focus solely on the salary and neglect to consider the valuable perks that come with the job. These can include benefits such as healthcare options, retirement plans and even stock options which can substantially enhance your financial wellbeing. Take time to consider and fully understand everything that is offered, asking for further explanation if required, as these may provide significant long term value.

Many new employees can decide to delay contributing towards retirement, which is a mistake that I have personally made, with the notion that it can be started another time! Unfortunately time does not stand still or even slow down so postponing retirement savings can lead to missed opportunities. Even small contributions early on in your career can accumulate over time so aim to start contributing as soon as you can and take advantage of any employer schemes.

A new job brings with it a new salary which can easily tempt new employees to increase spending habits! Without a carefully planned budget, it is all too easy to fall into the trap of lifestyle inflation. This is where your expenses increase with your income, so do create a sensible budget that aligns with the new salary and financial goals, ensuring you live within your means and can save for the future as well as being able to navigate through any unexpected expenditures.

A change in your income can have considerable tax implications that many new employees may initially overlook. Earning a higher salary may place you into a higher tax bracket which can affect your take home pay. Additionally, receiving a higher salary may mean you lose out on certain welfare benefits that you have been receiving so it is important to know exactly what you may be entitled to and how this can affect your new salary.

Starting a new job can provide a great sense of financial security but no one should become over complacent. Life can be very unpredictable and an emergency fund is essential in order to cover any unforeseen expenses. It is advisable to have between three and six months of living expenses which is easily accessible.

Failing to invest in your own professional development can be a huge mistake to make. Accept courses and industry events that can enhance your skills and career prospects. Continuous learning can invariably lead to promotions, pay rises and much better job opportunities in the future so invest in yourself as much as you can!