A changing jobs checklist is important. In 2022, I changed my job for a new opportunity at a new city. From going through with the experience, the biggest thing to look for is to make sure that the compensation package would be aligned with the cost of living increases.
I was working in Houston, Texas for a solid 5 years before I made the switch and moved to Austin, TX, for an incredible opportunity of a lifetime. I jumped at the opportunity without thinking twice because it was such an awesome move.
There are certain parameters and checklists to think about when you are changing jobs. The compensation and salary increase is the biggest factor. I was moving from a relatively cheap housing city to a very expensive housing city. The flip side is that I am great at finding great deals.
I actually ended up decreasing my housing costs by 30% while increasing my income by 40%+. That’s the right recipe to build wealth. Regardless of which, the biggest consideration factor to think about is your salary and compensation package. Taking a pay cut for less stress is not generally the best move.
There are many more changing jobs checklist items to consider. Life isn’t all about making decisions based on the best financial ROI. There are qualitative factors at play that goes beyond a pure numbers perspective. These are considerations I wish I thought of before moving.
Changing Jobs Checklist: 9 of Them!
Below are the changing jobs checklist you cannot ignore, whether it’s moving cities or moving jobs within the same city.
1) Changing Jobs Checklist: Review the New Compensation Package
You have to make sure that it will actually be an increase. Personally, I already knew the city I was moving to. it was Austin, TX, a city that’s near and dear to my heart. Therefore, I already knew that kind of cost of living increases I should expect.
Changing jobs checklist has to take into consideration the compensation package, first and foremost. Your time isn’t worth nothing. You are giving away one third of your life to somebody else, it better have been worth it to you from a financial standpoint.
Whether we like it or not, money is how we judge our standing in this world.
I’ve made the mistake of taking a pay cut for a less stressful job before. it’s not worth it. Even though it was only like a ~5% decrease, it was still the worst career decision I ever made. It doesn’t feel good. You’re going to feel like you are not valued if you’re discounting your time that much.
Your time is valuable. It’s not the best idea to sell it for cheap. Companies will be sure that you’re taken advantage of at work if you do so. If the company finds out you’re willing to work a lot for cheap dollars, that’s exactly what they’ll give you. Without remorse.
2) Review the New City’s Cost of Living
Because I was moving from Houston, TX to Austin, TX, I generally knew the cost of living adjustment would be minimal. As long as my housing costs were under control, food costs in Houston are very similar to food costs in Austin. Austin may be a little more expensive but not so noticeable.
If I was moving from Austin, TX to somewhere like New York, for example, then the circumstances are different. A changing jobs checklist has to include the cost of living adjustment because it makes a difference. There’s no point in increasing your salary by 50%.
If the new city costs 100% more than before. The cost of living adjustment has to be worth it from you. Otherwise, you are taking a step back in your career. When I visited New York, the sticker prices were a genuine shock.
Or coming into the United States from the relatively low cost of living country of South Korea? It was quite the shock. The compensation adjustment had to have been worth it.
3) Review the Compensation You are Giving Up
It’s not even about the new job’s compensation that matters. It’s about the compensation that you’re giving up. Many people forget this portion. Through one of my job changes, I actually gave up $3,000 worth of 401k vesting that I forgot to bring up.
However, it actually worked out for me at the end because the company ended up getting acquired and the new company vested every single employee’s unvested amounts. Hurray for luck! However, you don’t want to be lucky. You actually want to be compensated to make you whole.
You’re giving up a lot just to change jobs. A changing jobs checklist is to review the compensation that you are giving up because it really matters. You’re literally moving to help someone else’s dreams come true. Why should you be the one to give up the good thing that you currently have?
If they don’t want to make you whole, it’s not a bad idea to walk away from the deal. It’s not even about 401k vesting, it’s about stock option vesting, RSUs, and the like.
4) Review Your Income Tax Change
I didn’t even know city tax was a thing until my first job in Birmingham, Alabama. I was so used to working in Texas and the lack of a state income tax that I thought every state was like this. That’s not the case, to my surprise. There are wildly and dramatically different tax rates between cities and states.
Make sure to do research on what you’re getting yourself in to. That difference made me really happy that I was living in Texas where we have high property taxes but no state income taxes, which is something I prefer. Some states even have city and local income taxes.
A changing jobs checklist means knowing exactly what you are getting yourself into. Luckily, my salary was relatively low at $52,500 and it was only for six months so I didn’t mind the additional taxes. However, I don’t know what I would have done if the salary increase didn’t take into account the additional taxes.
The income tax change is real when moving between states and cities.
5) Change Addresses with Internet, Banks, and the Like
This is the biggest hurdle that comes with moving. It really is painful and time consuming to just get an address change with your internet and banks. You might get a new rate or they might say it goes against your contract, or anything of the kind. Whatever the case is, it’s a big hassle to change addresses.
However, it’s necessary. You don’t want your bank sending your brand new credit card over to your old address where you don’t know what the new tenant will do with your information. A changing jobs checklist has to include the address changes that comes with moving, in general.
The big ones are internet, banking, phone, and e-commerce accounts. In one apartment I moved into, the prior tenant kept sending their e-commerce orders there and never bothered to change it. For the entire 3 years that I’ve been there.
I have no idea what happened but I hope she didn’t eventually got her orders.
6) Consider the 83(b) Election for Stock Compensation
An 83(b) election is a provision under the Internal Revenue Code that gives the RSU granted employee the option to pay taxes on the total fair market value of the restricted stock at the time of granting. My new company awarded me restricted stock units.
However, because it was my first time being granted RSUs, I elected not to go through with 83(b). With the stock market generally doing bad in 2022, it was a great choice. However, it is an option for anybody who wants to explore with their own tax accountant on what they should do.
Everyone’s situations are different and I am not a tax advisor so I cannot give you financial or tax advice. I can only recite the options and at the end of the day, it is up to you whether you want to go through with such option or not.
With equity compensation being in the rise these days, it may be a strategy worth researching into. It’s a must changing jobs checklist to check off.
7) Changing Jobs Checklist: Get Bonuses in Writing
There was one company who I interviewed with downright refused to tell me what the bonus was going to be. Not even the range. They could have pulled the rug on me as soon as I joined. So it shouldn’t have come to them as no surprise when I told them I’m not taking the job.
However, for some reason, they were surprised. But regardless of which, get every bonus that they tell you about in writing. A changing jobs checklist has to include you cover all of your bases. Companies can promise you the world orally. But until it is in writing, it means nothing.
They can always say, “Oh, I forgot” and unless you recorded their statements, you don’t have any legal recourse to go against them. Get everything you were promised in writing. Otherwise, they can easily pull one over on you.
If you don’t think companies will play all sorts of games in order to pay you the least amount of money possible, think again. It’s always a possibility.
8) Review 401k Rollover Options
Even though 401k matching and the option is pervasive across companies now, that doesn’t mean that it’s guaranteed. Only 67% of employers offered a retirement plan option to employees in 2020. That means there is 33% of employer who doesn’t offer that.
You may be better off keeping your old 401k money at the old company. You just never know what will be the right situation for you, so it’s important to go over the options with a licensed advisor. One employee I talked to moved companies and jobs.
The old company was going through a bankruptcy process and the 401k money was kept with the old company. For months, he had no idea if he was ever going to get the money that he worked hard for all the time there. Luckily, everything worked out.
However, things just may that be that easy. It really makes a difference. Changing jobs checklist means reviewing retirement options that are available to you.
9) Understand the New Benefits Package
One company I negotiated with touted that their company offers “5% 401k matching”. However, when I actually looked and read the benefits package, he sure forgot to mention that it was capped at $1,500. That’s a huge difference. I thought I was going to get matched thousands of dollars.
It turns out, it wouldn’t even match a couple of thousand dollars. A changing jobs checklist means reviewing everything of the differences in the benefits package. The new company’s health plans weren’t all too great either. It wouldn’t cover a lot.
Therefore, I wasn’t just considering a pay cut in salary. I was considering a pay cut in the benefits package. Which, really isn’t worth it to me. The new benefits package is a part of your compensation. It includes health, dental, vision, PTO, and holiday time.
It really makes a difference. Trust me.
Changing Jobs Checklist is Important
The changing jobs checklist is so important because your career isn’t something you can easily change. One coworker took an entire YEAR and 3 months before he found a job he liked. Before he found the company that he really wanted to work for.
If you find out you’re at a bad spot, it may just not be that easy to change jobs. Therefore, you have to consider your options carefully because it’s a lifelong decision. One Vice President changed jobs for a 50%+ pay raise and guess what happened? It was the wrong opportunity.
She ended up changing jobs after just six months. It was that bad. She got lucky that she changed jobs that quickly and easily. However, not everyone has the same amount of luck. I wish I had the changing jobs checklist when I was considering a couple of moves in my life.
You will spend a lot of your life and time on your career. Trust me when I say it’s not a decision to take lightly. It’s a decision to seriously take because you have no idea how much your identity and mentality is tied to your career. It took me five years to realize that fact.
When you find a company you want to work for for the rest of your life, consider yourself very fortunate and lucky. I found my company who I want to work my entire life for. Things like that just don’t happen to you. You have to actively look for ways to find the opportunities.
It’s possible to get there.
Changing Jobs Checklist: Shortlist
- Review the new compensation package
- Review the new city’s cost of living
- Review the compensation you are giving up
- Review your income tax change
- Change addresses with internet, banks, and the like.
- Consider the 83(b) election for stock compensation
- Get bonuses in writing
- Review 401k rollover options
- Understand the new benefits package
