Our firm has recently moved location, which included organising the transfer of utility services such as electricity, phone and Internet, negotiating the lease of the new premises – and all the other things you need to do when moving your business.
Going through this process was a reminder of the large number of things that need to be considered when making a change, and that applies to individuals who change jobs just as much as businesses that change location.
With that in mind, here are a number of things you need to think about if you are moving to a new job.
New Income, new budget.
With Australia’s total credit card debt over $32 billion and rising, the reality is that most Australian’s are either living beyond their means or at least from paycheque to paycheque. Hopefully, your new job will come with a pay rise, so before you get used to the additional income and end up back spending everything you earn, take the time to create an updated personal budget.
Your budget should include all of your daily and weekly costs, as well as less frequent expenses such as monthly and quarterly utility bills. If you aren’t sure what you spend your money on, a good place to start is credit card and bank statements. Once you know what you are spending, review those expenses against your new income to estimate your savings surplus. Now comes the hard part. Set that money aside, either directly into your superannuation as a salary sacrifice or into an account that is used solely for investments. Keep in mind that although salary sacrifice into super reduces your tax bill, it also reduces your access to the money prior to retirement. If you are unsure whether you might need the money in the near future, perhaps look to invest it elsewhere.
Where will your superannuation go?
Particularly important if you plan to salary sacrifice, but at the very least you will need to ascertain whether your super is paid into your chosen fund or your past employer’s default fund. If this is the case, you will need to organise a transition to your new employers fund, or even better, take this opportunity to review numerous funds to decide which one suits your needs best.
Are you insured?
Insurance is often included to varying degrees within your superannuation, so you will also need to review how changes to your super will impact your insurance cover, and update your coverage if necessary.
Following these suggestions will allow you to maximise the financial benefits of changing jobs.
By Jennifer Lowe
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