NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

4 money moves to make when you get a new job

4 money moves to make when you get a new job
Image source: Getty Images

More often than not, starting a new job, especially one where you might be earning more than your previous job, feels terrific. However, this excitement can lead to lifestyle inflation – a situation where luxuries can quickly be seen as necessities since you are earning more. If this happens, you might find yourself living from paycheck to paycheck, which could cause mental fatigue and financial stagnation. That’s why one of the most important money moves might be to assess your habits and your finances before that paycheck arrives.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

1. Assess your finances and make a budget

Write down your salary and note how much money is left once you take out taxes, National Insurance and any pension payments. This is your net or take-home pay.

The next step is to consider your average monthly expenditure. How much do you spend on utility bills and household items like groceries? How much do you spend on transport? Take your time so that you get the most accurate figure possible.

Erring on the side of caution and overestimating the figure might be a good idea to avoid under budgeting. This could help you avoid dipping into your savings. Note this amount and subtract it from your take-home pay. What is the balance? Note that down.

It might now be time to consider whether you have any loans. If so, it’s a good idea to put aside a certain percentage of the balance to pay back the loan.

2. Make your money work for you

Find out how to set up a recurring bank transfer from your bank. See if it might be more convenient for you to schedule a transfer from your current account to your savings account once a month when your salary hits your current account.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

The benefit is that you eliminate the chances of being tempted to use the extra money hitting your current account. This may be an effective money move for those who might not trust their financial discipline.

3. Build an emergency fund and invest

Another prudent money move might be to think about what to do with the money saved. Dividing it into two might be a sensible idea, where one half may be allocated to an emergency fund and the other to investing.

Emergency funds help in many ways. They can offer you peace of mind, prevent you from going into debt and also cover you in case of an unexpected financial blow. An investment, on the other hand, increases your income and can help to secure your future. You may want to think about shares, stocks and probably ‘no money down’ property investing.

4. Make money moves on luxuries

Treating yourself is considered okay, but it’s best to do it intelligently. After making the calculations mentioned above, you should be left with some disposable income. It may be advisable to use some of it to treat yourself or your family and save the rest for any luxuries you might have been eyeing.

That said, there are various things that you might want to avoid that may lead you towards lifestyle inflation. For example, you may consider a vehicle a necessity. This does not mean buying an expensive brand new car if you can’t comfortably afford it on your salary after making the money moves highlighted above.

Doing some research and purchasing a used car in good shape may be considered a prudent money move.

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.

Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.