PERSONAL FINANCES: How to be financially savvy when changing jobs | Business

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The tight job market prompts many people to weigh options for starting a new career. If you are one of those who are considering leaving your current role in search of a better opportunity, it is important to consider how this could affect your finances. Here are some things to consider before handing in your two week notice.

Compare the complete package. Many factors contribute to job satisfaction. Take these factors into account when considering whether you want to keep your current job or seize a new opportunity.

To pay – Better pay is often the main reason for changing jobs. However, salary comparisons are not always as clear as they seem, especially when moving from an hourly position to a salaried position or to a position dependent on the commission. With a salary, you can be expected to work overtime without benefiting from overtime, but bonuses can potentially increase your income.

Advantages – Benefits vary from employer to employer. How much paid vacation does your employer offer? Will you have quality health, dental and life insurance options? Will they cost more? Does the company match 401 (k) contributions? There are other perks as well, such as an on-site exercise room, dry cleaning, or daycare that can save you time and money.

Culture – Pay attention to the culture of your future workplace. How do you see your place? Does the workplace seem collaborative or hyper-competitive? Where are you thriving? Is there flexibility to work from home? All of these things can make or break a new job.

Commute – Is the new job closer or further from home? If the new job is further away, you will spend more time commuting. You will also have to incur additional expenses in bus costs or in gasoline, oil and wear and tear on your vehicle. These costs can offset potential wage gains.

Opportunity – Think about where a new job can take you. A potential employer should be able to outline your intended career path along with a timeline for advancement. Ask yourself if you could walk away from a bright future in your current workplace. Is there a chance that your employer will soften your terms to keep you on board?

If you decide to take the plunge and have a new job offer in hand, here’s what else to consider.

Negotiate while you can. Most potential employers expect give and take when discussing wages and benefits. Think of ways to quantify the value you would bring to the business, and be prepared to counter if an offer doesn’t meet your expectations.

Transfer your benefits. Use your paid time off before leaving your current job. Ensure continuity of health care coverage by enrolling in COBRA until your new benefits take effect. You will have decisions to make regarding your 401 (k) savings. You can keep them where they are, transfer them to your new employer’s plan, or transfer your savings to your own account. You can also cash out your savings, but this will incur a tax penalty and lower your retirement goals.

Go on good terms. Ideally, you want to have good relationships with former employers. Give them enough notice to help them find a replacement. Request a letter of recommendation. Attend an exit interview if offered.

Talk to your financial advisor. Job changes are life events that impact your financial future. Rely on the expertise of your advisor to adjust your financial plan as your career transition progresses.

Holley Smaldone-Cragg, CMFC, is a financial advisor at Ameriprise Financial in Geneva. She specializes in fee-based financial planning and asset management strategies and has practiced her profession for over 35 years. His website is ameripriseadvisors.com/holley.com.


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