What to do with your finances when you start a new job

Depending on how you look at it, changing jobs can either be an exciting time or a stressful one. With so much happening, you can be forgiven for focusing on the new role rather than your financial arrangements. However, a new job is also a good opportunity to review your superannuation, insurance, savings, and overall financial position. Here are some things to consider when making a career move.

Review your superannuation

Changing jobs doesn’t necessarily mean you need to change super funds. You can generally keep your existing super account or choose a different fund.

Before making a decision, compare the features of your existing fund with an alternative. Consider fees, investment options, long-term performance, insurance cover, and any other features or benefits that may be important to you.

If you have more than one super account, a new job can also be a good opportunity to consider whether consolidating your super makes sense. However, don’t consolidate accounts until you’ve checked whether you could lose insurance or other valuable benefits.

Make sure your employer has the right super details

If you choose a super fund, provide your new employer with the details they need to direct your super contributions to that fund.

If you don’t make a choice, your employer may be required to pay your contributions into another eligible fund.

Review your life insurance

A change of job is a good time to review your life insurance, particularly if your cover is held through superannuation.

If you are changing or consolidating super funds, check what will happen to your existing cover before making any changes. Make sure you understand the insurance available through your new fund and, if you need replacement cover, have it in place before cancelling your existing cover.

Review your income protection

If your new role comes with a higher income, it’s worth checking whether your existing income protection insurance still provides an appropriate level of cover.

Don’t just look at the amount insured. Consider the policy’s definition of disability, waiting period, benefit period, exclusions, and how the benefit is calculated. Income protection policies can differ significantly, so the right level and type of cover will depend on your circumstances.

If you don’t currently have income protection, a change in employment may be a useful opportunity to consider whether you need protection against losing your income through illness or injury.

Consider salary sacrifice and other super contributions

Ask your employer whether salary sacrifice is available and make sure you understand how additional super contributions work. Super contributions are subject to rules and limits, and compulsory employer contributions may count towards these limits.

Before making any changes to your contributions, consider how this may affect your cash flow, savings, debts, and other financial commitments.

Start a savings plan

If you have something to save for, you may be able to arrange for a regular deduction from each pay packet to be paid into a high-interest savings account or managed investment fund.

After all the excitement has died down, a change of job can have a significant impact on your financial plans. Talk to your financial planner about how to make the most of it.