We start the month of May on a refreshing note! Quite a number of Indian & International students start their new jobs in May and settle into the groove of managing expenses along with an incoming salary or stipend. In this blog, we will trace some of the most essential tasks to do after starting a job in the USA to ensure that you are on the right track financially.
The month of May is here! As we start the fifth month of 2023, we shift gears to focus on a new set of things. As Fennel Hudson quotes, May, more than any other month of the year, wants us to feel most alive! And, we wholeheartedly agree. On that note, let’s get straight into the first act for this month – sorting life, and its financial requirement after securing a job in the US. Off the bat, if you’ve started a new job, or will do it in the near future, Congratulations Buddy! We’re all super stoked to hear this 🎀
This is a significant milestone, and you should be proud of yourself for securing a job in a foreign country. However, along with the excitement comes the responsibility of managing your finances, which is critical for a healthy financial future. We’ve prepared a laundry list of things that you should sort out and have a good understanding about
1/ 🏦 Open a Bank Account
The first thing you should do after getting a job is to open a bank account. This will enable you to receive your salary, pay your bills, and manage your finances. Most employers in the USA offer direct deposit, which means your salary will be deposited directly into your bank account. You can also set up automatic payments for your bills, which will save you time and effort.
When choosing a bank, consider the fees they charge, the interest rate on savings, and the quality of customer service. Many banks offer bonuses for opening a new account, so it’s worth doing some research before deciding on a bank. Institutions like Citi Bank, and Bank of America are a few stalwarts that have a great presence across the globe!
You can also consider online banks, which offer higher interest rates and lower fees than traditional banks.
2/ 💳 Get a Credit Card
We’ve already talked a lot about credit cards, their benefits and how they add a lot more convenience to our ways of life. If you missed out on that article, take a moment after this blog and read more about it here.
That being said, having a credit card is essential in the USA, as it helps you build your credit score, which is crucial for future financial transactions such as buying a car or a home. To make it more clear, a credit score is a numerical representation of your creditworthiness and simply put – a higher score means better creditworthiness.
When getting a credit card, choose one with no annual fee and a low-interest rate. You should also be careful not to spend more than you can afford to pay back, as high credit card debt can harm your credit score.
Let’s talk a little more about Credit Cards & Bank accounts
As mentioned earlier, it’s important to look around and choose to set up your base with a bank which preferably offers a high-yield savings account to maximize the interest you earn on your savings. In addition, having a checking account allows you to deposit your paycheck, pay bills, and make purchases with a debit card.
Secondly, mutual funds are managed by professional fund managers who use their expertise to make informed investment decisions that can generate maximum returns for the investors.
According to a survey conducted by the National Foundation for Credit Counseling (NFCC), only 1 in 4 Americans have a written financial plan, and 60% of Americans do not have a budget! (If you’re curious to know more, read & download the report here.) Opening a bank account and tracking your expenses is a crucial step in creating a budget and achieving financial stability.
Getting a credit card is also important for building a noteworthy credit history. In fact, according to a survey by the National Association of Realtors, 51% of millennials reported that their credit score was the biggest obstacle to homeownership.
Experian tells us that the average American has over $6,000 in credit card debt!!
Naturally, it’s important to use credit responsibly and avoid overspending. We’re attaching the link for the curious souls
What are some other points to consider?
3/ 🏥 Ensure Health Savings Accounts
We’re all on the same page about how in the USA, healthcare is expensive, and having health insurance is crucial. A helpful incentive from many employers is that they offer health insurance as part of their benefits package, make sure you enrol in the plan as soon as possible. If your employer does not offer health insurance, you can purchase it from the Healthcare Marketplace or a private insurer.
Another option is a Health Savings Account (HSA), which is a tax-advantaged account that you can use to pay for qualified medical expenses. If your employer offers an HSA, you should consider enrolling, as it can help you save money on healthcare expenses.
4/ 👵🏼 Plan Retirement Investing
It may sound a little far-fetched, but It’s never too early to start thinking about retirement, it is just another way of future planning and making your life seasoned for all contingencies.
Investing in a retirement account is an excellent way to ensure that you have enough money to retire comfortably. There are several types of retirement accounts, such as a 401(k) or an Individual Retirement Account (IRA).
If your employer offers a 401(k), you should enrol as soon as possible and contribute as much as you can afford. Many employers offer matching contributions, which means they will match a portion of your contributions. This is essentially free money, so take advantage of it.
If your employer does not offer a 401(k), you can open an IRA with a brokerage firm. There are different types of IRAs, such as a Traditional IRA or a Roth IRA, and each has its benefits and drawbacks. You should do some research and choose the one that is best for your situation.
5/ 🔍 Monitor Your Credit Score
A particularly helpful piece of advice from our side would be to continuously monitor your credit score. You can also sign up for credit monitoring services, which will alert you if there are any changes to your credit score or if someone tries to open an account in your name. Being proactive about your credit score will help you maintain good creditworthiness and make sensible financial decisions going ahead.
6/ 🤝 Network and Build Professional Relationships
Networking is crucial in the USA, and building professional relationships can help you advance your career. Attend as many industry events, join a few professional organizations, and connect with colleagues and recognised mentors in your field. These relationships can lead to job opportunities, career advice, and even cherished friendships in your industry.
7/ 🗣 Improve Your Communication Skills
Clear communication is essential in each and every workplace, and improving your communication skills can help you succeed in your new job. Take courses or workshops to improve your writing, public speaking, and presentation skills. These skills will not only help you in your current job but will also benefit you in future job interviews and career growth opportunities.
8/ 💰 Create a Budget and Save Money
Creating a budget is a no-brainer! It is essential for managing your finances and saving money. Track your expenses, set financial goals, and create a plan to achieve them. Saving money can help you build an emergency fund, invest in your future, and achieve financial stability. You can download a budget management app from the play store or app store, or simply create a spreadsheet to track your expenses!
Towards the end
Well well, as we reach the final act of our blog, one can understand that starting a job in the USA can be overwhelming, but taking these essential steps can help you manage your finances and build a successful career. The steps we’ve covered above should help you achieve financial stability and advance in your career & personal life
Good luck with your new journey amigos! 💪🏼💰👍🏼