A new job can mean new money – and tasks in your life. Don’t forget to congratulate / reward yourself once you land the gig, but first, take in 3 things I learned about money from getting a new job: Salary Negotiation, Taxes, and New Savings Plans.
1. Salary Negotiation
I did a LOT of salary research, and successfully managed to negotiate up my salary from the original offer. Sure, it helps that I’m talented but that doesn’t mean everything in today’s job market. What do employers care about? Their budgets. So, how do you explain to a prospective job that they should pay you a certain salary? Let’s talk about how:
- 1a. Know what the range is for your specific job in your specific city. Not for you, for your *job*.
- 1b. Explain exactly how you will save or earn them money in was above and beyond the job description, and be prepared to talk about it.
- 1c. Have a specific goal number in mind, and ask above that.
- 1d. Negotiation is about being willing to discuss, offer win/win alternatives, and *listen*!
When your income level changes, so may your taxes. Pretty exciting! There’s a federal tax term called Tax Brackets, and when you make more money, especially the big jump over $37K, you pay more taxes. This is why negotiating salary if you’ve gone over a tax bracket, is important.
Federal Tax Bracket for Single Filers (that’s most but not all of you, so married folks check out your savings here!):
- Tax rate: 10% – Up to $9,275
- Tax rate: 15% – $9,276 to $37,650
- Tax rate: 25% – $37,651 to $91,150
- Tax rate: 28% – $91,151 to $190,15
- (*it goes up from here, but I know who’s reading this)
3. Saving and Investments
When is a great time to start a new savings, investment, or retirement account? Right away when you get a new gig, before the first paycheck gets blown (ok, blow one paycheck but that’s all!)
Why? Normalization factor. If you’re used to having $300/mo to do whatever, if you suddenly have $600 – what’s your plan? Do you really want to look back in 20 years and think about the take-out you got, or would you rather look back at the trip/house/healthcare you made happen for yourself?
First, if your job offers a 401k/403b, putting money into that not only reduces your taxable income, but is a smart plan for later in life (after you’re 59 1/2 to be specific).
And, if you’ve been wondering how you’ll make some specific savings goals, use a tax calculator (or your first paycheck) to figure out if you’re making more than before, create a new budget, and then set up automatic savings to whisk a decent chunk of the new overage away, where you won’t miss it and it will add up. Just remember, $250 now is $10k in 3 years and 4 months. And with a new job that time will FLY.