Changing jobs can be an exciting step forward in your career, but this decision also carries significant financial and lifestyle implications. Pursuing a new job involves many crucial considerations. While the promise of a higher salary or a fresh start may be appealing, it’s essential to explore the whole picture before resigning from your current workplace.
If you’re considering a career move, don’t jump at the first opportunity that promises a higher salary. While everyone wants to make more money, the true value of a job isn’t always crystal clear.
In this article, we’ll help you discover and evaluate employer benefits so you can make an informed decision that supports your day-to-day needs and long-term goals.
Financial Considerations
It’s hard to turn down a job offer with a higher salary. Instantly, you begin imagining how those extra funds can improve your life and open more financial opportunities. What’s not immediately clear is how a higher-paying job might leave you earning less.
You’re probably asking yourself how making more money can result in a dip in your finances. It’s because the values of many employer benefits aren’t broken down into dollars and cents. For example, healthcare coverage, tuition reimbursement, retirement plan contributions, and childcare subsidies can all provide significant monetary benefits.
Failing to assign a dollar amount to these employer perks could skew your decision-making and leave you chasing a salary versus a comprehensive financial package.
Step #1: Evaluate Your Total Compensation Package
Take time and list all employee benefits available at your current job. Some of the most common benefits that employers offer include:
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Healthcare Coverage (health, dental, vision insurance)
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Add-On Health Benefits (short- or long-term disability coverage, supplemental life insurance)
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Tuition Reimbursement
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Childcare Subsidies
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Retirement Plans & Contribution Matching Programs
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Paid Sick & Vacation Days
Next, itemize the earning opportunities available, including:
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Salary
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Bonuses or Commissions
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Profit Sharing
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Stock Options
Lastly, record any unique perks or benefits available, such as:
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Remote Work Options
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Gym Membership
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Parking Reimbursement
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Schedule Flexibility
Step #2: Assign Values to Each Benefit
Once you have a list of all your current employee benefits, identify the perks that matter most to you. For example, if you don’t have children or your children are grown, childcare subsidies might not matter to you. On the other hand, if you plan to pursue higher education, tuition reimbursement will likely be a substantial benefit on your list.
Go through your list of benefits that are important to you and try to assign a value to each. Some items will be easier than others. For example, your employer might have it detailed that tuition reimbursement covers up to $5,000 of school-related costs annually.
Some benefits might be hard to monetize. For example, with healthcare coverage, you might not be able to determine the dollar value of the plan. However, you can review the financial benefits, such as out-of-pocket expenses, including:
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Deductible Limit
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Co-Pay Costs
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Co-Insurance Costs
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Prescription Drug Discounts
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Plan Type (PPO vs. HMO)
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In- vs. Out-of-Network Costs
Step #3: Compare Benefits Between Jobs
Next, you’ll want to perform the same process for the new job that you’re considering. You might be more limited in the information available since you haven’t accepted the position yet. However, most reputable companies will provide a list of employee benefits to job seekers.
You’ll already know from Step #2 which benefits carry the most weight with you. This should make comparing options a little easier when weeding through the list of benefits.
The goal is to understand the true financial worth each position holds for you. Then, you can make a better decision rather than focusing solely on the salary.
Lifestyle Considerations
Determining the financial value of a job is essential in making wise career moves. However, it’s not the only factor. You also need to determine how a new job could potentially affect your lifestyle (and that of your family).
Four areas that play a significant role in whether employees remain at their current jobs or pursue new opportunities include:
• Flexibility: Many employees desire more flexible schedules, such as flextime, compressed work weeks, or adjustable hours. If a potential employer offers this flexibility, it can allow you to save money indirectly – even more than you might expect.
For example, being able to adjust your working hours might reduce or eliminate childcare costs, help avoid additional expenses associated with rush-hour commuter traffic, or enable you to cultivate a better work-life balance.
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Work Atmosphere:
No one wants to spend 40 hours a week working for a company that doesn’t appreciate them and their ideas. Unfortunately, many businesses cultivate highly competitive and hostile work environments. Finding a workplace that respects you and your co-workers pays dividends toward your self-esteem and overall mental health.
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Career Advancement:
Another critical lifestyle consideration to evaluate is whether the new job aligns with your long-term career goals. If you want to expand your knowledge base within your field and you’ve hit a glass ceiling at your current job, it makes sense to pursue new opportunities. On the opposite side of the coin, taking a higher-paying job that pulls you further from your career ambitions could lead to regrets down the road.
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Relocation:
One decision that can impact not only you but also your whole family is relocating to take on a new job. It’s never easy to leave friends and extended family to move to a new city or state. However, if the new role checks all the right boxes, it could be an amazing opportunity worth pursuing. Just remember to consider how this decision could impact others involved, such as your partner and children.
Key Takeaways
Everyone wants to earn more money, feel appreciated for their contributions, and provide for their families. The draw of a higher-paying job is enough to entice many to switch roles. However, as the saying goes, “The grass isn’t always greener on the other side.”
Take time to evaluate your current job and new opportunities thoroughly. Then, you’ll be more confident in making the decision that is right for you and those close to you.
We’re Here to Help!
When considering a job change, there can be many financial implications that will follow. For example, do you rollover your 401(k) to your new employer or convert it into an IRA? If you’re asking these questions, our financial advisors are available to help.
Please stop by the Credit Union or call 410-687-5240 to schedule an appointment with an advisor.