It’s the beginning of a new academic year. For those in the medical profession, that means advancement in your training or the beginning of a new job. Either way, there is a change in your routine. Several of my colleagues who decided to choose a profession that requires an extra decade of training are now finally starting their first “real” jobs. I feel bad for them, but perhaps they will earn it back in the long run. I figure that now is a good time to go over some financial assessments that new graduations should consider. Perhaps my friends will actually read this and take heed of some useful advice when they embark on their first jobs.
Track all of your financial holdings.
You need to make sure that you are able to log onto all of your bank, retirement, and investment accounts. Update any mailing addresses if you recently moved. Open a Personal Capital account. Make sure you update any loan and mortgage accounts as well. I’ve recently become a big fan of electronic statements—it’ll cut down on what you have to move around if you’re still settling into a new home. Automate any bill payments too. I had compulsively reviewed my receipts prior to paying my bills, but realized that I have almost never found any discrepancies (other than a sushi restaurant adding an extra $10 tip!). Save yourself a few minutes each month by automating your bills. Once you get busier, you’ll find that it’s quite easy to forget to pay your bills.
Decide whether to consolidate your retirement accounts.
If your prior employers offered matching contributions to your retirement, you probably already have at least one retirement account already. Chances are that your new employer probably will go through a different custodian. That might mean that you won’t be able to contribute more to your old accounts. Decide whether it is worth your time and energy to keep your accounts separate. Most custodians will be willing to accept roll-overs. I ended up keeping my 403b from fellowship open since I had good options on Fidelity, and I still had active accounts with them.
Make sure you have disability insurance.
As we get older and play our financial cards appropriately, disability insurance will matter less. However, it would be wise to buy disability insurance when you start out on your first job. You never know what might happen. The several thousand dollars a year in insurance premiums will be worth it if you are unlucky enough to become disabled early in your career.
Get yourself some life insurance if there’s anyone who will be dependent upon your income. That includes children or spouses. If your spouse earns more than you do and you don’t have any kids yet, perhaps you could delay for a little bit. Depends on how much income you will have starting out.
Don’t go crazy upgrading your lifestyle…yet.
That includes furniture, cars, and your home. I kept my beaten-up desk from medical school for several years after I started my first job until some college student needed it. Eventually you will want nicer stuff, but don’t upgrade all at once. Plenty of doctors who play their cards right will be able to buy boats and expensive cars (::cough::WCI), but they went through many years of abstinence before letting loose.
That’s it. Simple and nothing earth shattering. I know that most people starting out their first jobs will have limited brainpower and time to dedicate to this. It’s certainly helped me out over the years as I build upon my core knowledge and common sense.