Career change
Is a new job the right financial move?
Millions of American workers are looking for new jobs, and a job change can be a great time to significantly improve your financial prospects.
In addition to the pay a new job offers, you should consider the value of a wide range of benefits and other compensation. Once you have a clear picture of what you’re being offered, you may be able to negotiate a better deal.
1 Total your current compensation
Start by calculating the compensation package of the job you currently have, or your most recent job if you’re unemployed, says Seth Mullikin, a certified financial planner in Charlotte, North Carolina. In addition to salary and bonuses, profit-sharing or stock options, you should include employer-paid health and life insurance premiums, company contributions to health savings accounts and retirement plans.
Include any other perks you enjoy — like employee discounts — along with the value of benefits you’re likely to use in the next one to three years, such as tuition assistance, Mullikin suggests.
2 Take a deeper look Benefits can take vastly different forms.
Some employers offer a range of health insurance plans from which to choose, while others don’t. If the only option is a high deductible plan, for example, that could be fine if you’re a young, healthy person — or a disaster if you have substantial medical costs and not enough savings to cover the deductible, Mullikin says.
Ask about waiting periods too. Employers can make you wait up to 90 days for health insurance coverage or a year to contribute to a 401(k). Parental and other leave policies can have waiting periods as well.
3 Use your leverage
Financial considerations must be weighed with all the other aspects of a prospective job. Are there opportunities for advancement? Flexible scheduling and work locations?
Risk tolerance matters too. You may be willing to accept a smaller salary and fewer benefits in exchange for stock options that could deliver a big payoff someday. Or you may prize job security and the opportunity to save for the future.
If the job is tempting but the offer is lacking, see if you can negotiate. You may never have more leverage than you do before you formally accept an offer that’s been extended, says negotiating expert Kwame Christian, director of the American Negotiation Institute in Columbus, Ohio.
This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org.