Got a New Job? Here's Your Financial To-Do List

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So you're changing jobs. Congratulations on making the next big step up the career ladder! But besides taking on new job duties, there are also some important financial decisions and major money moves to make. Some you'll need to handle before leaving your former employer, others you must manage as soon as you join your new one. But once you tackle them, you'll be in a more secure position financially — and to pay more attention to winning over your new boss and co-workers. (See also: 12 Hidden Costs of a New Job)

Here's an easy to-do list to follow once you decide to make your career move.

Before You Leave Your Old Job

Aside from the niceties of leaving on a positive note, make sure you get your financial ducks all in a row before you go, too.

Schedule a Meeting With HR

After your Human Resources representative asks the exit questions, it's time to ask about your financial considerations. Calculate the unused vacation, sick pay, and other compensation that may be due to you. If you're vested in stock options, ask how much time you have to exercise them. Find out when your final paycheck will arrive, and what it will contain. And save all documents related to leaving your former employer, just in case loose ends are left untied after you leave.

Figure Out Your Health Insurance

If you lack health insurance at your new job (or it doesn't kick in right away), determine when your former employer's insurance coverage will expire. If there's a gap of time when you'll be uninsured, explore health options such as COBRA or plans on your state's Affordable Care Act health exchange, to see which one offers the best coverage and price for your needs. Healthcare.gov offers a good primer on these two choices.

Roll-Over Your 401(k) Into an IRA

When changing jobs, it's tempting to cash out your employer-sponsored retirement plan, but don't! Yes, it seems like a financial windfall, but if you cash out before age 59-½, you pay income taxes and early withdrawal penalties, and any benefits of letting that money compound tax-deferred will vanish.

Another option is to leave your money where it is, but you won't be able to contribute any more to the plan. Also, many former employees like to look ahead, not behind, so leaving your 401(k) as is could affect your future balance, because you may be less likely to pay attention to it, and you have less control over how it's managed.

The surest way to avoid any financial drawbacks is to roll over your funds into an individual retirement account. In a direct IRA rollover, your 401(k) funds are sent straight into an IRA without you touching the funds. Then you have a bigger sandbox of investments to play in.

Are You Making a Move Geographically?

If you moved for your new job, your moving expenses may be tax-deductible. That doesn't mean moving across town, though — the distance between your former residence and your new job must be at least 50 miles farther than your old job was (so if your old commute was five miles, your new commute must be at least 55 miles from your former place of residence). If you meet that test, you can deduct a lot of moving expenses that you paid for, such as hiring movers and renting a van. If you are driving in your own car, you can deduct gas, parking fees, tolls, and lodging en route. You can even include the cost of renting a storage unit for up to 30 days if you're not immediately able to move into your new place. The IRS lets you claim the deduction in the year you move, so if you're kicking off the New Year by starting a new job in a new place, unfortunately you can't claim it until you file taxes in 2016.

Starting Your New Job

Start your new job off right by making sure you understand all of your compensation and benefits — in detail.

Review Your New Company's Benefits

According to the Bureau of Labor Statistics, around 30% of your total compensation is made up of employee benefits, so sign up for as many offerings as you can. Besides health insurance and the retirement plan, there are plenty of other benefits — from gym membership discounts and paid education to childcare and commuter savings — that add up to a lot of financial value. So go through the big package HR gives you on day one and read details of your benefits — including their respective sign-up dates.

Find Out When Your Benefits Start

Some companies don't start new employees in health care plans right away. Find out when your new plan begins, and if there's a waiting period, look into short-term coverage options. It's also good to know when you'll start accruing sick time and vacation days.

Decide Between an HSA and a FSA

Based on what kind of health plan you sign up for, health savings accounts (HSAs) and flexible spending accounts (FSAs) are both great ways to sock away pre-tax dollars for future medical costs.

• To be eligible for an HSA, you must be in a high-deductible plan, meaning a minimum deductible of $1,250 for just you, or $2,500 for a family. If you meet that criteria, you can funnel a designated amount of every paycheck into it — up to $3,300 a year if it's just you, or $6,550 for your family. An added plus: The funds roll over year-to-year, so you never lose the money. Even if you don't typically have high medical expenses, you can use an HSA as a way to build up savings and reduce taxable income — think of it as a medical IRA during your time on the job.
   
• An FSA is your option if you pay a higher premium and lower deductible. It works the same as an HSA, but you can only contribute $2,500 a year, and the funds don't roll over if you don't use them. To make it work best for you, have a good estimate of what that year's out-of-pocket health care expenses will be and just contribute no more than that amount.

Both an FSA and HSA will pay off when it comes to your taxes. Just remember that money in both ultimately must be used for medical expenses — you suffer a 20% tax penalty if you spend them on expenses the IRS doesn't consider as health-related.

Don't Forget Other Types of Insurance

You may think, "Oh, I don't need those right now," but disability and life insurance are not just fringe benefits. If disease or injury disables you early in your working life, your lost wages can be massive, and Social Security disability may not cover all expenses. That's why disability insurance is worth having.

Employers typically offer an affordable group plan, but benefits could vary greatly — they may only cover 60% of your full paycheck, and the maximum time frame could be as little two years — so read the fine print. If you don't like what you're offered, shop around for individual coverage, or supplemental coverage that can bridge the financial gap.

Basic employer-provided life insurance is low-cost or free, and that might be sufficient if you're single, child-free, or have a spouse who isn't dependent on your income to cover household expenses. But if your untimely death would be a burden to your family, that policy's face value may not be high enough. Employer-sponsored life insurance coverage typically equals one to two times your annual salary, but experts recommend getting coverage worth at least five times your salary. Most group plans will let you buy a certain amount of additional coverage, four to six times the annual salary, but for someone with a spouse, kids and a sizable mortgage, even that might not be enough.

Like with disability insurance, you can purchase more coverage through your company, buy supplemental life insurance on the open market, or both. But first you should determine how much life insurance you really need. Find an experienced insurance broker that will do a needs analysis with you, then you can decide whether you should purchase beyond what your company is offering.

Re-Evaluate Your Tax Withholding

If you've regularly received a hefty IRS check after doing taxes, don't pat yourself on the back: It's not a gift from the government; it's your own money being sent back to you that the Treasury Department kept for most of the year as an interest-free loan. Change all that when HR gives you IRS Form W-4 form to fill out. The amount of income tax withheld from your paychecks by your employer depends on how you filled it out.

Ideally, your withholding should equal the exact amount of your tax liability, or only a very small tax refund. But pay too little and you'll owe interest and penalties.

Whether you're starting a new job, or already well into it, it's important to redo your Form W-4 if there is a major life change that will affect the amount of tax you'll owe for the year. Besides starting a new job with a higher salary, examples include marrying or divorcing, getting a second job, losing a job, buying a new home, and having or adopting a baby. To determine the right withholding level, use the IRS's easy calculator.

Decide on Your 401(k) Deductions

If your company doesn't automatically enroll you in its 401(k) plan, do so right away. Then figure out how much you're allowed to save each year. Starting in 2015, the limit goes up to $18,000 ($24,000 if you're 50 or older), but some employee plans may restrict you to a lesser amount. Ideally, you will save as much as you can — the $18,000 maximum or your employers' maximum — but if you don't think you can swing that, financial planners typically recommend you save at least 10% of your annual salary.

Next find out if your employer offers matching contributions, i.e., free money. A typical match is 50 cents for every dollar you contribute, up to 6% of your salary. Try to contribute at least enough to get the full match. And be sure to ask about the vesting schedule, the amount of time you must work there before you can leave with 100% of your matching contributions.

Look at Your 401(k) Asset Allocation

A new job may mean a higher pay grade, so take another look at how you're investing for the long haul. When deciding where to invest your 401(k) funds, figure out what asset allocation works right for you now — what's the mix of stocks, bonds and cash that's a good fit for your age, income level and risk tolerance? If you have 20-plus years till retirement, you can afford to have a higher percentage of stocks in your portfolio than if you were two years away from retiring.

Now you're ready to review the mutual fund offerings in your 401(k) plan. Besides looking for funds boasting good returns, low fees and solid management, look for a diverse mix of funds. Don't over-invest in just the technology sector, or put all your funds into growth stocks. And don't overload on your employer's stock, either. Spread your bets so that you lower your investment risk.

Even if you're not wowed by the funds offered in your 401(k), still consider putting money in it: The tax break and free money you're getting from your employer are bonuses you won't get elsewhere.

Ask for Direct Deposit

If your employer offers direct deposit for your paychecks checks, accept heartily. Many banks offer free or lower-cost checking if you direct-deposit into their account, saving you a few fees. Direct deposit also makes paying bills online a whole lot easier, because you'll know just when your earnings will arrive in your account. Then you can schedule automatic bill payments for added convenience, and ensure your bills are never late.

Track Expenses for the First Few Months

Check your outside-of-work expenses for a few months. You may be surprised how a new job can affect your spending. If you've earned a salary increase, you may forget that amount is a gross figure — not your net pay. And when you feel flush, you may be inclined to start spending your gross pay when pulling out your debit card, without considering what your take-home pay will be in the next paycheck. By tracking your expenses, you can see if they've gone up alongside your wage increase. If the ratio is high, then aim to cut back on the spending, ideally getting back to the level you were at before you started the bank new job.

Buttress Your Emergency Fund and Get Educated

While you should congratulate yourself on landing the new job, don't assume a "happily ever after" ending for it. That's why an emergency fund is key for life's unexpected surprises like losing that job, receiving a whopping hospital bill, a major home or car repair bill. Relying on credit cards will simply compound the problem. If you've got a salary increase, use some of that to start your emergency fund. Financial planners agree that you should keep around six months' (some even recommend a year) worth of living expenses put in an easy-to-access account. If you lose that job, it may take a few months to find another good one.

If your employer offers education benefits or specialized training for your occupation, take it. Use that, plus any new skills gained or big achievements made on the job, to keep your resume sharp and up to date. The Bureau of Labor Statistics states that the average American changes jobs an average of nine times before the ripe old age of 34. With a big emergency fund, and a sharp resume, you won't need to fear the future, because there won't be time for the dust to settle.

What steps do you take when starting a new job?