Bad News: Taking a Better-Paying Job Could Cost You Big Bucks

Are you considering a job change to increase your salary? If so, it might cost you. Watch out for these hidden expenses when taking a better-paying job.

Your income plays a big role in your life. If you make a comfortable salary, you'll find it's easier to afford your living expenses, and you're able to take advantage of better financial opportunities. You may even be able to save and invest more for the future.

If you're not happy with how much you're getting paid, you may be considering a job change. While making more money can come with benefits, taking a better-paying job can also cost you. That's because there may be hidden expenses that come with making a career change. Here are some potential expenses that can come with a job change and have a serious impact on your personal finances.

Benefit changes

Not all jobs offer the same employee benefits. While you may make a less-than-ideal salary, your current employer may offer more benefits when compared to other companies. These employee benefits can add up, and they can save you money in other areas of your life. In a way, these benefits are worth money-- just not the kind that you can hold.

Here are some employee benefits that can be extremely valuable:

• Health, dental, vision insurance
• Life insurance
• Paid time off
• Paid family leave
• Loan assistance
• Employee wellness perks

Here's an example: Having a job with impressive health insurance benefits, such as a low-deductible plan and affordable monthly premiums for your whole family, is valuable. If you take a new job that pays $70,000 (instead of a previous salary of $58,000), but the employer doesn't offer any health insurance coverage, switching jobs may not be a smart move.

The new, higher-salary job likely won't be worth it if your family is covered under your current employer's health insurance policy. Between deductibles, out-of-pocket medical costs, and prescription costs, you may pay much more for your family's medical expenses. That $12,000 salary increase might end up not being worth the job switch.

401(k) contribution match

Some employers offer to match 401(k) contributions. The company may offer a dollar-for-dollar or a 50% match up to a certain percentage of your salary.

This match can significantly increase your 401(k) contributions and can add up over time. If you leave a job with a 401(k) contribution match, and your new employer doesn't offer any matching opportunities, that results in less "free" money coming your way.

Relocation costs

Moving to a new city or state can be very expensive. If you end up taking a new job that requires you to relocate and the company doesn't provide you with full relocation reimbursement, you may need to fork over a lot of money for the move. These costs can get prohibitive if you have a family and a household full of belongings.

Consider this as you look at new job opportunities. Ask if you can take the job but work remotely. Doing this will allow you to stay in your current home, eliminating the need to pay to relocate.

Cost of living

Another expense to consider is your cost of living. If you take a new job and move elsewhere, you may need to get used to paying higher everyday living costs. Moving from an area with a low cost of living to somewhere more expensive can get pricey.

Here are some expenses that may be impacted:

• Groceries
• Rent or mortgage costs
• Utilities
• Local income, property, and school taxes
• Childcare costs

Consider whether your cost of living might change with a new job. As mentioned earlier, check to see if remote work is a possibility.

Commuting expenses

Your commuting expenses could change for the worse, too. If you take a new job with a higher salary, but your new office is much further away from your home, you may find that you need to spend more on your daily commute.

Here are some additional costs that may go up with a new commute:

• Car insurance
• Car maintenance
• Gas
• Public transit
• Parking fees

Longer commutes also take up free time, which can negatively impact your relationships and your mental well-being. Consider your current and potential future commute before making a job change. Again, a remote work opportunity could offer an advantage here.

Lifestyle changes

Your new job may also come with lifestyle changes, and those changes may be somewhat out of your control. With a new role, you may need to change how you dress, or you may need to spend more to appear more professional. These changes may come with a hefty price tag.

Here's an example: If you take a new job in a client-facing position, you may need to spend more to maintain your appearance. If the casual work attire that you wore at your old job is no longer an option, you may need to invest in a new wardrobe. A closet of new, formal attire could easily cost $1,500+. That upfront expense may not work for you.

If you also need to look more presentable in this role, you may decide to pay for routine professional manicures. Regular haircuts and coloring services can also get costly. You could easily spend $1,500+ a year on these beauty services.

Before starting to look for new job opportunities or agreeing to take on a new role, consider how a career change could impact both your wallet and your life. Yes, taking a better-paying job may come with benefits. But be aware that a job change could also cost you money.