Along with a change to your daily routine that tends to come with a new job, it can help to put in place positive changes for your finances too. Here are some useful tips:
Plan around your pay cycle
While most companies pay monthly, it may be at a different time to what you’re used to. Updating your direct debits and bill payments to reflect any change in pay dates is a good time to look at what you’re actually paying for and whether savings can be found.
If your new job pays fortnightly, this is a great opportunity to modify your mortgage repayments. Paying half your monthly mortgage as a fortnightly repayment lets you squeeze in one extra monthly repayment each year – potentially saving thousands in interest over the course of a loan.
Why waste a pay increase?
As a job change sometimes come with a pay increase, there is an opportunity to save more while maintaining the lifestyle you’ve become accustomed to. One of the most tax-effective investments might be making an additional concessional contribution into your super. Using your before-tax pay, it’s usually taxed at just 15 per cent instead of your marginal tax rate.
Individuals may contribute up to $25,000 during 2019/20 as concessional contributions to super.
Check your Insurance
As you move through your career, priorities change and with a mortgage and children comes the need to protect your income. Changing jobs is a chance to check your insurance – inside and outside of super – and make sure it matches your financial situation.
Seek professional financial advice
A financial adviser can help with a new budget based on your new salary along with investment strategies to ensure your new job gives you a boost today, and in the future. The time you spend chatting might be a great investment.
With many people predicted to have more than 10 jobs in their lifetime, having a super fund that can move with you from job to job and into retirement has never been more important. After all, losing track of just one super fund can cost you thousands in retirement.
Not all super funds can do this though, and once you’ve done your homework to find the fund that best suits your investment profile and insurance needs at the right cost – it’s often a good idea to stick with it. This gives you peace of mind throughout your working life that your retirement savings won’t get lost and you won’t be paying unnecessary tax and fees when the time finally comes to retire.
There are other considerations, too, when looking at your super arrangements between jobs.
Most plans have different default insurance. If you roll your super from one fund to another, your existing insurance will usually lapse when you do so, while your new fund may not provide the cover you need or expect.
There are transaction costs associated with selling and buying underlying investments, which you need to be mindful of when transferring to a new super plan.
If you’re a 'Choice' member – that is, you’ve actively chosen where you want your super invested, changing funds may mean your previous options are no longer available, and this could have a significant impact on the growth of your super.
For help with your super, savings and more, contact our professional financial adviser today on 03 9471 0080 or email@example.com.
This editorial and the information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser. From time to time we may send you informative updates and details of the range of services we can provide. If you no longer want to receive this information please contact our office to opt out. The views expressed in this publication are solely those of the author; they are not reflective or indicative of Licensee’s position, and are not to be attributed to the Licensee. They cannot be reproduced in any form without the express written consent of the author. RI Advice Group Pty Limited ABN 23 001 774 125, AFSL 238429