Case study: a new-job finance review

Ant, 34, is about to start an exciting new job, with a considerable bump in salary. Here’s how Ant decided to use a job change as an opportunity to review his finances and establish himself.

Jumping into exciting new territory

Ant’s career is taking off, and he’s just landed a new job as an electrical engineer. The position comes with a significant increase in salary, which is likely to grow further as his experience increases. The change in income was the motivation Ant needed to review his finances and get established.

Setting priorities

Ant’s first port of call was to review his expenses and create a budget. While he didn’t have any major credit card debts, he decided to quickly pay off what was left of his motorbike loan. The hardest part? Deciding what to do next. “I talked to a family friend and they recommended I visit a licensed financial adviser to get a solid understanding of my options,” says Ant.

Deciding what to do — when you don’t know what to do

Ant isn’t quite sure what the future will hold, but he does know he doesn’t want to fritter away the increase in his salary. Ant’s licensed financial adviser recommended he start investing slowly, with a view to shifting his focus as things changed in the future. To make the most of Ant’s additional income, the adviser recommended he consider:

Salary sacrificing an additional superannuation contribution each month. As Ant is already used to living on less, he won’t feel the impact, but the long-term benefits make financial sense.
Putting a percentage of every pay into a “future fund” savings account. While marriage, kids and mortgages are not on the cards for Ant right now, they might be one day — so it’s worth starting your saving early.
Investing in Australian and International shares, Property or Managed funds to build his wealth over the longer term. Given his risk appetite, Ant decided to invest a portion of his income into the Australian Unity’s Pro-D High Growth Fund, which offered him a cost-effective portfolio with potential strong capital growth.

A young man sitting at a desk with headphones and working

Creating a flexible plan for the future

For Ant, seeking out financial advice meant he didn’t need to have all the answers. With the help of his adviser, he was able to put together a plan that not only used his new income to establish some good wealth-building strategies, but also could be easily adapted as things change.

Tips for reviewing your finances when you start a new job

Starting a new job can be a great time to reevaluate your finances and get yourself set up for the future. Below are some tips to help.

Tips on reviewing your finances after starting a new job

Be smart with any new income

It can be very tempting to increase your expenditure as your income grows. But if you can live within your means and set aside at least a portion of your new income for saving and investing, you’re on the path to financial success.

Review your superannuation

A new job is the perfect time to review your superannuation fund to make sure it still meets your needs. If you currently have multiple funds, consolidate them into one superannuation fund — not only will you save on fees but pooling your nest egg earnings into a high-performing fund means that compound interest can work its magic on a larger amount.

Think about salary sacrifice

Consider talking to your new employer about salary sacrificing some of your pre-tax income into superannuation — as the superannuation fund will tax these contributions at 15 per cent, so you may be able to save on your marginal tax rate. And, of course, the additional contributions will help boost your retirement income.

Get your insurances in place

Insurance can be overlooked, but it’s an important consideration. As with superannuation, a new job is the perfect time to make some decisions. From income protection to total and permanent disability insurance, consider what you might need to protect yourself and your family against unexpected events in the future.

Talk to an expert

Everyone is different when it comes to money. Some people are naturally conservative, while others are prepared to take risks, especially over the longer term. A licensed financial adviser is a great place to start as they can assess where you are in life, what your risk profile is and identify strategies that will help you achieve your financial goals.

Understand the different types of investments

From diversified funds to property and shares, there are a lot of investment options out there — and it can be confusing. Increasing your knowledge by learning about what’s out there can help you make an informed decision about what’s right for you.

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Case study: making the most of a new salary

Discover how Ant used his new job to kickstart his financial future.