Five Smart Financial Moves to Make before Switching Jobs

When switching jobs, it is important to be pragmatic when evaluating the new opportunity before you. Outlined below are some aspects of the new situation that you can examine carefully to make sure the new switch works out well for you.

Your New Contract

It would be particularly wise to only give in notice at your old job after you have received and carefully examined the contract for the new position you are being offered. Make sure that at the very least you seek a legal opinion on the validity of the contract, and whether the terms as expressed within it are a reflection of your understanding of the document. This includes remuneration, the terms under which you may leave that position, non-disclosure clauses as well as any other terms that may affect your future career and thus, your future financial stability.

Net Income

Ensure that you have correctly understood the calculations by which you arrive at your net income in your new job. This is a discrepancy that a lot of new employees make, and one that some employers do not take the time to point out, which results in your receiving significantly less than you had initially understood you were going to get as your net income.

Benefits

Closely examine the benefits offered by the new position and note how they impact on your lifestyle. Do you have to travel further than you did for your original job? Does the cost-benefit analysis work out? Do you get paid overtime? Do you have the same health benefits? Are aspects important to your performance, like an entertainment allowance for a high-end marketeer, included in your benefits package? Carefully analyze your benefits terms to ensure they do not put you in a losing position.

Employee Schemes

Examine what schemes are on offer at the new job and take advantage of them. These often vary, and can include stock options, saving schemes, and things of that nature which can be vital to ensuring your medium to long term financial stability.

Account Management

It may be wise for you to look into who manages the financial accounts for the firm you are joining, at a banking level. It puts you on friendlier footing if you are banking with the same bank that handles your employer’s accounts, especially if you are joining a stable firm. Credit is significantly easier to access, and transactions are of course much easier to follow up on. Along side this, you would do well to ensure that you continue with any saving activity that you may have been carrying out at your previous position, or at the very least, start this valuable habit. If disbursements from your monthly income were being distributed between an expense and savings account, ensure the same process is maintained when taking on the new job.

Starting a Roth IRA

A Roth IRA is a tax- deductible fund that was introduced by Senator William Roth of Delaware in 1997, as part of the Taxpayer Relief Act. Putting one’s money into a fund of this type can be a very profitable way of investing for retirement. Absolutely anything can be invested in such a retirement fund, and all of the money so invested may be withdrawn at any time free of tax. Opening a Roth IRA is likewise a very simple and easy process: The customer simply goes to the bank and ask for the forms he or she needs to fill out. Having done so, he then returns the forms to the bank and deposits money into the newly- opened Roth IRA account, by one of three ways: a check, cash, or a transfer from one’s savings account.

Constant fund monitoring is crucial. It is also possible to open a Roth IRA with an online brokerage. Fidelity Investments is an example of such a company. Registering for an account in this way is even simpler, requiring the customer to give some personal information. Once the applicant has given this information, he can deposit money into his new account. The funds in the account can then be invested in almost anything, including mutual funds, stocks, and bonds.

Tax refund money should be invested in one’s Roth IRA. There is a limit on the amount that can be invested in the account each year, depending on one’s age (those over 50 can pay an additional “catch up” contribution). This maximum changes each year, and so it is important to check this upon starting the account. How much one can invest also depends on one’s tax- filing status, that is, whether the holder is (1) single; (2) married, filing separately; or (3) married, filing jointly. Contributions can never be made with investments; they can only be made with cold, hard cash. And over the age of 70 1/2, there is no minimum to how much can be deposited in the account.

For anyone far- sighted enough to think about planning for the future, opening and investing in a Roth IRA can be a secure, intelligent path to take.

Steal My ID by Identity Guard

In a new mock commercial by Identity Guard, which is featured below, they showcase an imaginary product called StealMyID.com, which helps people get their identity stolen. The video then asks if losing your identity is something you really want to do.




In the video it also mentions how all it takes is a name, and a social security number, to get access to some ones personal finances and in essence the ability to destroy their credit score. This brings up a good point in how important credit monitoring is, and how you should go over a credit card statement line by line to make sure that no one is using your account. Also it is important that your credit score is not harmed which can cause you to not get a loan for a new home, or even for a car payment. If you follow the video to the site www.stealmyid.com the site is also done up in a fake infomercialish way that while comical also further illustrates how important it is to not just give away your credit card information online. The site then leads you to http://www.identityguard.com which further discusses the problem with online identity theft as well as a launchpad for the purchase of their product line.

We are big fans of infogramics, especially when they teach a lessons and the Identity Guard site was full them, one of our favorites was this one, which has been reproduced below:

All in all a funny yet still informing commercial for a great product that actually works, so if you want to find out more watch the above video and check out StealMyID.com.

This post is Sponsored by Identity Guard

My First Home Loan

Being a first time home buyer is the greatest feeling in the world for everyone. There are two types of home loans, there is a first mortgage loan it can be 15 to 30 years. The second mortgage which is a home equity. First mortgage homes have a lower rate than the second mortgage. The best loan is a fixed loan.

Buying your first home
Buying a house is one of the biggest financial decisions.

To get a home loan you will need to find a real estate agent. This is a ways process. You should get recommendation from someone that just bought a home. Once you have contacted the real estate agent you will then bring all your information to them. You will need to bring your proof of income. You will need documents like W-2 and all of your bills like credit cards and any monthly payments that you make. All of these items will compare your income to your debt ratio and it will give them a idea on what you will be able to afford.

You will need to get pre approve before you can make any steps forward. Once the information is submitted to the lender. The lender is the one that gives you the money and the permission to purchase the home. The information than goes into the underwriting. The underwriting is the loan commitment. This process can take up to a month, depending if all the information is provided. Once you have loan commitment than you are free and clear to actually purchase the home that you want. The funds are all there for you. Good faith estimate and any kind of disclosures like your closing cost. Lenders are require to make sure that they sign you all the document that are proof of the loan. They must perform high quality service.

There are so many programs to finances a home. If your credit is bad you will have to meet a credit score to get approve. Having bad credit and trying to buy a home, you can go to a credit repair company to fix up your past debts. It could be up to a 12 month process depending on how your history is. You are better off to clean your credit when trying to buy a home then to buy a home with bad credit. If you buy a home with a bad credit score you will have high interest rates for the next 30 years.

What is a 401k?

What is a 401k

By – Richard Adams
A 401K is a savings plans that is offered to employees by employers as a means of encouraging investing for the future and retirement. They differ from an Individual Retirement Plan (IRA) in that they are only offered through the workplace and both the employer and the employee can make contributions toward them. A 401K is a great investment opportunity, especially for people who are starting young and may have several hundred thousand dollars available to them when they retire. If you are at least 21 years old and are employed by a company that offers a 401K, you would be wise to take advantage of the opportunity.

Employer Matches

Most employers offer an even greater incentive for employees to save by providing matching funds up to a certain percentage of the employee’s contribution. For example, if you have five percent of your paycheck withheld every two weeks for your 401K, your employer may choose to donate half that amount, or 2.5 percent, into your account. In order to be eligible to keep the employer contributions, you usually need to stay with them for a set amount of time to be vested. Your vesting increases by the number of years you have worked for your employer, and after a set number of years, you are fully vested and are able to keep all money that your employer contributed to your 401K.

Tax Benefits

The amount of money you contribute to your 401K is done on a pre-tax basis, meaning you pay no tax on it until you make a withdrawal at retirement. Your 401K contribution for the year will show on your annual W2 statement, but you are not required to report it to the IRS.

Early Withdrawal Penalties

If your company allows you to borrow against your 401K before retirement, the amount you borrow will be subject to both a penalty and taxation.

Read more at:
Smartmoney 401(k) Center – 401(k) information center with various articles and tips and advice.
NPR : True Value: The Young Worker and a 401(k) – A talk about the value of 401(k) retirement savings accounts for young workers and retirees.