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October 2, 2009
5 Financial Secrets to Know When You Look For a New Job
 

1. Consider the total economic package, not just the salary. When most people look for a job, they are only thinking about what their salary going to be when they start. Is it going to be 60,000, or 80,000, or 100,000. New employees want to know how they earn bonuses or commission. What I recommend to most people is to consider the total economic package, which isn't just your salary and your bonus. It includes all of the cost of the benefits that the company gives you including putting a price tag on health insurance, dental insurance, life insurance, 401(k) match, and other fringe benefits. The important thing to understand is that $1 is still $1 and you must compare apples to apples and not just salary to salary.

2. Understand the 401(k) plan. In today's world where retirement is not the old three-legged stool of Social Security, pension, and personal savings, you need to consider how your company will help you grow your retirement nest egg. Today’s retirement plan has become more like a pogo stick which is only your personal savings. The 401(k) at the workplace will be the lion’s share of your nest egg. It is important to understand a few things. How long will it take you to get enrolled in the 401(k) plan? Will you have to wait 30 days, 90 days, or 180 days? Is there a company match on the 401(k) plan, and is it a fixed match or a discretionary match? Do you have a regular 401(k) and do you also have a Roth 401(k)? These are important components to understand when considering your overall picture when looking at the 401(k) plan.

3. Understand your health insurance plan. Your health insurance is one of the most important pieces of your overall financial picture. You need to understand how the health insurance program works. Is your company picking up the majority of the premium, will you be splitting the premium, will you have to pay the entire premium? Do you have one carrier or multiple carriers? Is it an HMO, a PPO, or an HSA plan? Is there a Flexible Savings Account? Exactly how does the plan work, and what will you be covered for if something happens? Most importantly, how much of that cost do you need to pick up? Which dependents can be covered, and what happens in the event that you lose your job?

4. Learn your vacation and sick day rules- Even though you may have been working at one company for many years, the rules will change when you begin a new job. How many sick days will you get? How many vacation days, and how long must you be at the new job before you start accruing vacation days? Do these days carry over or is it use or lose? If the company goes out of business, what happens to your vacation and sick days? Is it possible to do a 4 day work week at 10 hours per day? It is imperative you figure out how these plans work. If you don’t, you mind wind up spending your vacation days at your desk.

5. What kinds of expenses does the company cover for you? You need to know in advance what your company covers when it comes to expenses. In today's world where companies are cutting back on the expenses, you need to know the policies of what your company will actually cover. Do they pay for mileage if you are going to travel? Will they pay for things like a laptop computer or other supplies that you need? What if you want to advance your education? Ask those questions before you get the job, so you know what will be your responsibility, and how to plan your budget.

These are just five tips that you can think about when you look at your next job because at the end of the day it isn't the economy that matters, it is your personal economy.


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Ted Jenkin CFP®, CMFC®, AAMS®, AWMA®, CRPC®, CRPS® is the founder of oXYGen Financial located in Atlanta, GA. He has done numerous radio shows, and has been featured before in Smart Money and Atlanta Magazine. See his blog at www.yoursmartmoneymoves.com, and breathe easier® with his daily financial advice.

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