Starting a new job

Getting a job can be both a relief and a high. There are a few things you should take care of when starting a job, that will make sure you’re set up to succeed both personally and financially.

In This Checklist

Fill out your W-4 correctly.
Enroll in your employer’s health and life insurance plans.
Find out if you have a retirement plan and enroll.
Take stock of all your other workplace perks and benefits.
Budget for work clothing.
Evaluate commuting alternatives.
Scope out the neighborhood.

Seven steps to take when starting a new job

1. Fill out your W-4 form correctly.

A W-4 form is a required form that tells your employer how much in federal income tax to take out of your paycheck. How much they take out, your withholding rate, is based on factors like whether you are married or have children and other factors like home ownership. The more tax exemptions you take, the less tax comes out of your paycheck. But if you take too many exemptions, you may end up paying more taxes when you file at the end of the year.

See also: Paychecks, Withholding and estimated taxes

The Internal Revenue Service (IRS) withholding calculator can help you figure this out. Your state may have a similar form to fill out for state income tax. The goal for both should not to pay too much or too little to the IRS in taxes, so you don’t end up owing at the end of the year or giving too much to the IRS when you could be using it for other things.

IRS withholding calculator:
www.irs.gov/individuals/article/0,,id=96196,00.html

Your exemptions can get complicated if you have other sources of income — including a working spouse — if you receive large bonuses, if you have a lot of deductions or credits or if you have other factors that complicate your tax returns. Consider talking with a tax professional or using tax software to help with tricky cases. A few options are:

Turbotax: turbotax.intuit.com
HR Block tax software: www.hrblock.com/tax-software/index.html (formerly TaxCut)
TaxAct: www.taxact.com

The tax section in LifeTuner's Topics A-Z index can help you prepare and file taxes correctly:

2. Enroll in your employer’s health and life insurance plans.

If your employer offers you a health insurance plan, enroll in it. If you have a spouse or family depending on you and your employer offers a Life Insurance plan, we recommend enrolling in that, too. Usually health insurance plans have different options, so talk with your benefits manager about the specifics of the plan and enroll in the options that best suit you.

If you have a primary care physician or another doctor that you see regularly, check to see which insurance they'll accept. If your job doesn’t offer health insurance, you still need to have it.

See also: Health insurance

3. Find out if you have a retirement plan and enroll.

Many employers offer retirement benefits. Some employers will even match a certain percentage of what you contribute to your retirement plan. Different plans have different specifics. When you get to your new job, find out if you qualify for a retirement plan at work — such as a 401(k), 403(b) or SIMPLE IRA — and sign up for the plan. Start thinking about retirement the first day of your first job — and never look back.

Start thinking about retirement the first day of your first job — and never look back.

Try to save as much as you can — but at a minimum, save at least 10% of your income for retirement and make automated payments every month, so you don’t have to think about it.

See also: Retirement

4. Look into other workplace perks and benefits.

Find out all the benefits that your new employer offers. You don’t want to miss out on any extra perks like benefits for dependent care, money for professional development or graduate school tuition and discounts at local businesses.

This is the part of your paycheck that you'll only get if you do the homework and make use of the benefit. Your benefits manager, usually the human resources person who helped you complete your initial paperwork (W-4), will be a good source to ask about other benefits.

See also: Jobs and income

5. Budget for work supplies and attire.

Usually your employer will cover your technology and supplies, but sometimes you need to take care of your own needs. You want to make sure to budget for any expenses you think you may have — computers, software, books, cell phones — and remember to collect receipts so you can expense them at the end of the year.

If you’re moving to a more formal job than your last or have never bought work attire, then you will have to Budget for new clothes. Don’t rush to buy everything at once. Cover the few essentials that you need and add more over time. Especially in the beginning, focus on saving a cushion of emergency funds and always spend less than you earn.

See also: Budgeting

6. Evaluate commuting alternatives.

Compare the costs of commuting to your job in different ways, if you have alternatives. In many cities you may have a choice of driving, taking a bus or subway, joining a car pool, even cycling or walking. Driving can be the most expensive way to commute, especially if you pay for parking.

See if your employer has any benefit programs related to commuting, such as subsidizing public transportation or a monthly stipend if you commute by bicycle (they get a tax break for doing that). Transportation costs are a big part of many budgets, with commuting being by far the biggest costs — so this is a good place to look for saving money.

See also: Budgeting

7. Scope out the neighborhood.

You can’t put a price on convenience. When you’re starting a job, make sure to look at alternatives like where you can get lunch and coffee at reasonable prices, whether there are reasonably priced gyms and shops nearby, whether your bank has a branch or ATM nearby. You can use Google Maps or Yelp to search the area.

If you work in a high-priced area, you might want to start budgeting ahead if you’re the type of person who likes to eat out for lunch and get coffee every morning. That can add up to $50 a week or more in your Budget. It’s definitely cheaper to have your coffee at home before work and bring lunch in, but that might not be your style. If you’re worried about Spending Less Than You Earn, we recommend cutting back on little extras like eating out so that you can afford more beneficial things, like putting money in savings.