Got a new job? Don't forget to update these 5 things!
Starting a new job is super exciting, full of fresh opportunities and maybe a few new challenges. But before you get too comfy, there are a few important updates you should tackle. From sorting out your Medicare to tweaking your investments, here's a quick rundown of the top five things you need to be on top of when you land that new role.
The Australian Bureau of Statistics reported that over 1 million Aussies were out of work in July 2020, during the peak of the pandemic. But now, with employment rates on the rise, many Australians are jumping into new roles this year. The average Aussie changes jobs every 3 years, so it can be tricky to remember everything that needs updating. Let's dive into the key areas of your finances that need a review when you start a new job.
Once you’ve landed that new job, it’s tempting to focus solely on your shiny new role. But along with new responsibilities, a change in job often means a change in salary, which should be factored into your overall financial plan. It’s a good idea to sit down with your financial adviser to review your plan and make sure everything is aligned with your new income.
Key things to check when you start a new job
1. Watch out for the Medicare levy surcharge
If your new job boosts your taxable income above $90,000 and you don’t have private health insurance, you’ll need to pay the Medicare Levy Surcharge (MLS). The Medicare levy surcharge (MLS) is a separate levy from Medicare levy. It applies to taxpayers on a higher income who don’t have private health cover. The MLS encourages people to take out private health cover as per ATO website. Use the ATO’s income test estimator to see if the MLS applies to you. This might be a good time to consider whether getting health insurance is worth it compared to paying the surcharge.
2. Get income protection cover sorted
A higher salary often changes your spending habits or increases your savings. But what happens if you can’t work due to illness or injury? Income protection insurance provides a monthly payment for a set benefit period, helping you stay on top of your expenses while you recover. Think of it as a safety net for your new financial commitments.
3. Rethink your mortgage repayments
Interest on your mortgage is calculated daily, so paying more frequently can reduce what you owe faster. If your new job means a better salary, consider putting some of that extra cash towards your mortgage. Also, if your pay cycle changes to fortnightly or weekly, think about aligning your mortgage repayments to match. Chat with your mortgage broker to explore your options.
4. Review your investments
A new job is the perfect time to revisit your investment strategy. Look at how much you’re investing, your risk appetite, and how your funds are allocated. If you’re new to investing, now could be the time to speak to a financial adviser and develop a plan that leverages your new income for long-term growth.
5. Don't forget your super
Switching jobs is a prime opportunity to sort out your super. Once you know your new salary, decide if you need to tweak your contributions. Consider finding a super fund that aligns with your needs. One of the reasons people stick with their insurance through their super fund is that they don’t need to personally foot the bill, as the premiums are debited from their super balance. With retail insurance, you have flexible payment options too. You can choose to pay through super, from your cash flow, or a combination of both. It’s all about finding what works best for your financial situation.
Wrapping it up: Make the most of your new job
Hey, starting a new job is more than just a career move – it’s a chance to reassess and optimise your financial strategy. Whether it’s managing your income, protecting your health, or securing your future, taking these steps can help you make the most of your new role.