The New Year heralds a fresh start and for some that means finding a better or more rewarding job, but before you start polishing your CV it’s a good idea to get your financial affairs in order.
“There are a number of reasons for this: Prospective employers may look at your financial profile before offering you a job; a proper understanding of your financial affairs will better enable you to evaluate the remuneration package and; you will be able to identify any gaps in your financial situation when you change jobs,” explains Marlies Kappers, DirectAxis head of marketing.
Depending on the job, your ability to manage your own financial affairs could have considerable bearing on whether your application is accepted. A bad credit rating won’t reflect well on someone applying for a financial or senior management position.
A low credit rating indicates that someone has a poor track record of making loan repayments, paying credit cards, store cards or even a phone bill and it’s easy for employers to check.
“South African law entitles you to a free credit report annually and it’s worth getting, particularly before applying for a new job. Errors can creep in and it’s best to sort these out before you get a nasty surprise at the job interview,” says Marlies.
Once you’ve made it through the application and interview process, assessing an offer isn’t always a like-for-like comparison of how much you’ll take home at the end of the month. A clear understanding of your existing package, including all the benefits, will make it easier to decide whether the move is a good financial decision.
Although the new job may put more cash on the table at the end of each month you could be worse off in terms of your overall financial standing. For example if your current package includes a company car, you may need to consider the costs of buying and insuring your own car. The same would apply to housing benefits.
It is also important to check on life policies, medical aid, car insurance or other insurance that your employer may pay for fully or in part. If these are not part of the new package you will need to take over these payments or get quotes for replacement policies.
“Changing jobs, particularly in a sluggish economy, is a big decision. You need to give yourself the best possible chance of getting the position you apply for as well as ensuring that you really will be better off if you decide to make the move,” says Marlies.
· Make sure your credit rating is an accurate reflection of your ability to manage your own financial affairs;
· Compare your existing package against what’s being offered, taking all the perks and benefits into account;
· When you make the move check that there are no gaps in your financial security because your new package does not include something your previous employer covered.