You've finally landed your dream job, or at the very least you’ve managed to escape your old hated job by finding a new one. It’s easy to get caught up in the excitement of your new life, but don’t let yourself start making some common financial mistakes. Here are a few you’ll want to avoid:
Not Reassessing Your Budget
A new job inevitably means that your finances are changing. The first thing you need to immediately do is sit down and redo your budget. Since your budget is the most important financial tool you have, it’s important that it’s kept up to date. Whether you’re making more or less money now you need to assess all the ways it’s going to affect your bills. Don’t forget to factor in what you need to be saving for an emergency fund, retirement, and other savings.
Buying a New Car
Going out and buying an expensive new car as soon as you get a new job is a very common financial mistake, especially when you don’t really know if you can afford it yet. It’s smart to wait at least a few months so that you can be certain you won’t lose or quit the job. There’s nothing worse for your finances than taking on a big monthly payment and then losing the income that you were using to pay for it. Don’t fall into the trap of increasing your monthly expenses just because your pay has increased as it’s smarter to continue to expand your savings instead.
Going on a Shopping Spree
Even if you don’t just buy one big item, but instead start spending loads of money on a bunch of smaller items you’ll still manage to put yourself in quite a deep financial hole, especially if you’re putting all of those purchases on a credit card. Racking up credit card debt because you think you’ll have more cash to pay it off come payday is dangerous for your financial health. Remember that you should only put on a credit card what you can immediately afford to pay off. Building interest on those new items will end up costing you more and shrinking your new paycheck even further.
Ignoring What This Might Mean for Your Taxes
When your job situation changes so does your tax situation, and it’s important you know the repercussions. If you’re making more money it might mean that you will have to pay some tax this year when last year you might not have had to. It’s important to factor this into your finances as it means you might not have as much extra money as you thought you did. On the flip side if you’ve had to take a job for less pay you might get a bigger refund this year which could help add to your savings.