A new job could mean a bigger salary, different financial benefits or changes to commuting costs.
That's why the first thing you need to do when you get a new job is to reassess your financial situation.
1. Recalculate your budget
Perhaps you’ve become so used to your old budget that you feel you can easily manage all your finances in your head. However, if you've just started a new job, there might be changes you need to make to your finances that you haven’t even considered yet.
Recalculating your budget will keep you on track with your income and expenditure. If you don't already have a budget, there are plenty of great budget templates you can use online. Or you could use an app such as Money Dashboard.
Some people swear by the 50/20/30 financial rule. This rule encourages you to use 50% of your income on your financial needs such as rent, bills and food shopping. A further 20% goes into savings or used for paying off debt, and 30% to spend on your wants such as clothes shopping and takeaways.
2. Check your tax code is correct
When you start a new job, you should always make sure your tax code is correct, or you might end up paying more tax than you're supposed to.
If you're starting a job for the first time, you might get emergency taxed. Usually, this happens when HMRC don't have all your details, so they issue an emergency tax code instead.
If you get emergency taxed, there's no need to worry as it's easily rectified via the government’s website. Once your tax code is updated, you’ll be able to get a rebate if you’ve overpaid.
3. Set up auto-savings
Auto-savings are a great way to help you consistently save, without having to worry about transferring the money yourself. If you're not usually a regular saver, or you forget to put money aside every month, then auto-savings could help you build up your pot - without you having to do anything!
You can potentially set up a direct debit for a certain amount to go into a separate account every month. However, there are plenty of auto-saving apps that will do all the work for you. Apps such as Chip and Plum are auto-savings apps that will put money aside for you.
Alternatively, apps like Tandem and Moneybox offer innovative ways to save money. For example, the app will round up the amount you spend on everyday purchases. So if you spend £3.60, the app will round it up to £4 and deposit the extra 40p into your savings account.
4. Pay into a pension
Your pension is the money you save for your retirement. The best thing about it is that you get tax relief on it.
Workplace pensions are usually organised by your employer. Both you and your employer would usually contribute to this type of pension. Your contribution is automatically taken from your salary before you receive your wages. If you can afford to contribute more, you should consider it.
If you don't have a workplace pension, it's a good idea to set up a personal pension plan. You can set up a direct debit so that the money automatically goes into your pension every month.
5. Pay off debt
If your new job has put you in a stronger financial position, you should consider paying your debts off faster. By reducing your debt, you’ll eventually end up with more disposable income, which means you’ll have more money to spend on the things you want, or for savings. If you've got multiple monthly payments that are hard to keep track of, you could consider consolidating your debt. But you'd need to make sure this is the right option for your personal circumstances first.
To find out where you could get support and advice with debt, read here.
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