Tips for Starting a New Job—When It Comes to Your Finances

From choosing healthcare coverage to managing your paycheck, there are many money to-dos when you take on a new position.

Written by Andrew Pentis / July 28, 2022

Quick Bites

  • Before you start a new job, understand what you might be leaving behind and what you can take with you—that list could include healthcare benefits, stock options and retirement plan proceeds.
  • Once you begin work with your new employer, setting up tax withholdings, direct deposit and new benefits can help you avoid hiccups with your budget.
  • After you’ve settled into the new position, take care of secondary but significant to-dos like updating your life insurance policy and replenishing your emergency fund.

You’ve negotiated your salary, signed on the dotted line and are ready to transition into a new job. However, you could be so focused on the work itself—taking on duties and meeting colleagues—that you might forget about optimizing your personal finances.

Though filling out forms like a W-4 is important, it’s just the beginning. You’ll also have to tie up loose ends from your previous employer [what do with that old 401(k)?] and optimize your new benefits and budget as you move forward.

To make sure nothing gets lost in the shuffle, let’s review all the important tips for starting a new job when it comes to your finances.

Before you start your new job…

It might not seem like it, but picking your first day at your new job is a money-related task. If your budget can stomach missing a paycheck, for example, you might take some time off before starting another position. On the other hand, lag time between jobs could cause a lapse in benefits, such as healthcare coverage.

To get ahead of these issues, communicate with your human resource representatives. As you give two week’s notice to your soon-to-be-former employer and pick a first day on the calendar with your next employer, ask questions related to the items below.

  • Check your healthcare policy’s effective date: If you leave your job on June 15, for example, ask whether your health insurance (and other benefits) will expire on that day, or whether they’ll last until June 30. That could affect your decision to extend your employer-provided coverage (without their financial contribution) via COBRA or opt for private health insurance options until your next employer’s benefits take effect.


Also, talk to your new employer about how your work start date affects your coverage start date, says Christina Nguyen, a New York-based career coach who also works as a recruiter for Amazon. For example, "if you start on July 2nd, your benefits might not kick in until August 1st, which is almost a 1 month gap," Nguyen says. "However, if you’re able to start on Jun 30th, your benefits will kick in the next day. Not everyone knows about this, so I think it’s important to stay informed and not get left without coverage."

  • Empty FSA, HRA funds: Confirm this with your benefits administrator, but some employer-provided benefits, including healthcare coverage supplements like Flexible Spending Accounts and Health Reimbursement Accounts can’t be taken with you to your next job (Health Savings Accounts, on the other hand, are transferrable). If you have two weeks remaining with your current employer, for instance, you might exhaust unused funds on appointment copays, prescription drugs and eyeglasses.

  • Review the status of stock options: If you worked for a startup or publicly-traded company, you may have stock options. Ask the stock plan administrator about how these options could be affected by your departure, or if you need to take any steps to vest (or take ownership) of the options. In some cases, leaving your employer before the stock options vest could mean forfeiting them altogether. In other cases, where the stock has already vested, you can take the shares with you when you leave.

  • Request a payout for unused time off: Unless you work for a company with so-called “unlimited vacation,” you might have accrued “PTO” and sick days. Some employers will cut you a check for these unused days according to your hourly rate, and 24 states require it.[]

  • Come up with a plan for your 401(k): If your employer provided a retirement plan, you should ask the plan administrator about your options. Typically, you could leave the plan where it is, roll it over to a private individual retirement account (IRA) or to your new employer’s plan without facing early withdrawal penalties. If you previously borrowed from your company retirement plan, perhaps via a 401(k) loan, you’d likely want to complete repayment of that debt before you leave the office for good.

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  • Adjust your budget: If your new job carries a lower or higher wage—or you’re taking some time off before starting anew—it’s high time to update your cash-flow plan. Plug your new take-home pay into your budget to determine whether you have less or more money to spread around to debt obligations or savings goals.

Once you start your new job…

Hopefully, your new boss will allow you to gradually ramp up in your new role. After all, your first week might be flush with new-hire responsibilities like reading through onboarding documents and pushing out paperwork. You’ll probably also need to reserve some brain power for some relatively complicated tasks like managing your paycheck’s proceeds and choosing healthcare coverage.

  • Review your tax withholdings: Your new employer will ask you to complete IRS Form W-4 and your home state’s equivalent (A-4 in Arizona, for example). This tells your new payroll department how much to withhold from your paycheck. Picking this number could help better position you for filing your taxes. Generally speaking, you might withhold more if you generally owe the IRS at tax time; or withhold less if you generally receive a big tax refund. Consulting a tax advisor is always a good idea.

  • Enroll in direct deposit: This can typically be done with a simple form, online or off. You’ll provide checking account and routing numbers. Then your employer will “directly deposit” your paycheck to that account. Not sure how much to direct and where? Consider the 50/30/20 budgeting method.


To “pay yourself first” and automate saving, you could set up direct deposit to multiple accounts. Alternatively, on the back end with your bank, you could arrange a recurring, automatic transfer from your checking account to a high-yield online savings account. You can also employ third-party mobile apps like Acorns or Digit to automate this saving on your behalf.

  • Set retirement plan contributions: If your new company offers a plan, most likely a 401(k), contributing is a great way to save for retirement tax-free. With a 401(k), for example, your per-paycheck contribution would be taken out before your paycheck is taxed. So you can make untaxed contributions and, simultaneously, decrease your taxable income.[2] The best advice is to contribute at least up to your employer’s match (if it offers that) but as much as makes sense with your budget, keeping 401(k) contribution limits in mind. Investment brokerage Fidelity recommends a target of 15% of your paycheck.[3]

  • Select your health care coverage: If you have more than one option, it’s time to get some pen and paper out. After a refresher course on the definitions of key terms like deductible and premium, run the numbers to see what your out-of-pocket expenses (including paycheck contributions, if applicable) would look like under each plan (or perhaps a spouse’s employer-provided plan is a better fit). You might also favor plans that are associated with an FSA, HRA or HSA. Also, employers may give you an “open enrollment” deadline to select your coverage, but keep in mind that it will likely backdate to your first day on the job.

After you’ve settled into your new job…

Maybe you get to the 30- or 60-day mark in your new position and can finally come up for air. These less timely but equally important financial tips for starting a new job should be next on your list.

  • Update your life insurance: You might have been offered voluntary life insurance by your employer during the open enrollment period where you selected health care coverage. If you hold a private life insurance policy, however, it might be wise to increase your coverage, particularly if you’ve seen a jump in salary. Though determining how much life insurance you need is complicated, one rule of thumb is to choose a policy with a death benefit of 10 times your annual income.

  • Leverage other workplace benefits: Now that you’ve gotten the most critical benefits taken care of, find time to pore through your employee handbook to learn about secondary but significant perks that affect your wallet. Potential benefits run the gamut, from reimbursement for commuting, tuition or professional development to dependent care FSAs, gym memberships, wellness programs and discounts with name-brand retailers. Talk to your coworkers about their favorite programs.


Nguyen, the career coach, stressed the importance of leaving no stone unturned. "Many of my clients are not aware of many benefits that their employers offer," she says. "One of my clients was paying for graduate school out of pocket until I advised her to look into her benefits package. She did and found out her employer offered tuition reimbursement, which she actually qualified for. She saved almost $10,000 that year."

  • Replenish your emergency fund: Hopefully, you’ve already rejiggered your budget to account for your new paycheck and expenses (perhaps relating to a longer commute or childcare costs). As part of your budget, make sure that your bi-weekly or monthly savings is enough to replenish your emergency fund. Maybe you had to dip into your savings while you were looking for work, for example, but now you may be in a stronger position to refill your rainy day fund.

  • Prepare for your next salary negotiation: You might be excited about your new wage, particularly if job-hopping helped you increase your take-home pay, among other compensation benefits. But if you wait for your employer to start a conversation about a raise, you might have to wait longer than you should. Though you might still be early into your new gig, it’s never too soon to start a tally of your accomplishments, learn the market rate for your skills and put yourself in a position for promotions. Let’s get to work.

Article Sources
  1. “Final Pay: Getting Your Last Paycheck,” Workplace Fairness,
  2. “The Tax Benefits of Your 401(k) Plan,” TurboTax, Jan. 21, 2022,
  3. “Starting a new job? Make these money moves.” Fidelity, Jan. 5, 2022,

About the Author

Staff editor Andrew Pentis headshot

Andrew Pentis

Andrew Pentis has used his journalism background to write about personal finance topics since 2015. His work has appeared in over 40 publications, including LifeHacker, U.S. News & World Report and Marketwatch.

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