28 Dec 5 Financial Decisions to Make After You’ve Changed Jobs
You’ve changed jobs and you’re busy focusing on settling in and succeeding in your new role. However, when you change jobs you should also consider your financial plan and how this job change will affect your goals. Will it help you achieve your goals faster? Or will you need to readjust your goals with your financial planner? If you have recently changed jobs, here are 5 financial decisions you’ll need to consider to ensure you’re on track with your financial plan.
1.Talk to your financial planner as to how you can reduce debt
The interest rates you pay on borrowed money can quickly absorb any extra income. If you’re looking to reduce your debt, but can’t decide what to pay off first, it is a good idea to talk to a financial planner. A financial planner will be able to help you decide what debt is most pressing. They can also help you navigate tax implications and advise you on what the best approach is to reducing your debt and increasing your wealth.
2. Get tax ready
Go to the ATO website and review the marginal tax rates and how your income level is taxed. If you have a higher level of income you may incur additional Medicare levies if you don’t have the required levels of private health insurance. It may be worth keeping a little money aside for tax time.
3. How to plan for extra income within your financial plan
If your salary has increased, there are many different ways this can add to your financial plan. Your financial planner may suggest setting up a regular super top-up payment, called “salary sacrifice” where you forego the added income and place it into your super account. You may not even miss the extra income, but your super account will grow much faster.
Effective salary sacrifice payments made by your employer to your super fund are treated as concessional contributions and therefore are only taxed at 15% up to the concessional contribution caps as opposed to your normal marginal tax rates. At Master Your Money Now, we know super is likely to become one of your biggest investments that will help you enjoy more lifestyle flexibility once you have retired.
4. Check your super is going into the right account
If you’ve requested your new employer to pay your super contribution to your super account, check you are receiving the new contribution. To do this log into your super account online and viewing your transactions. This will ensure it’s going to the right place, the last thing you want is missing super. If you haven’t yet provided your employer with your super details, make sure to provide them as soon as possible.
5. Update your income protection insurance
Income protection provides you with an income if you become ill or are injured and can’t work. You should carefully consider whether to take out income protection or salary continuance insurance if you don’t have it already. If you do, then now is the time to consider whether to update it with your new income level. If you leave it at your current level at claim time, you may quickly realise the shortfall when it comes the time you need to access it.
Get in touch with a Financial Planner today
The team at Master Your Money Now are experienced financial planners who can help you adjust your financial plan when you have changed jobs. If you need financial advice on what to do with extra income or how to restructure debt, do not hesitate to book a strategy session NOW!