Starting your first job & how to save money
You’ve just gotten your first job out of school and university, and for the first time you can afford cocktails at your local bar. The handbag you’ve always wanted is somehow now within reach, and the improvements you wanted to make to your car (i.e. a subwolfer) are a possible dream. So, you go and buy them right? Right?
Not so much. It’s fun, spending everything you earn. Believe me, I know all about it. But it’s going to leave you financially hampered for the rest of your life, if you dispose of all your disposable income in your twenties. Now is the make or break time. You can set the rest of your life up nicely, or you can make everything a little bit harder. Here’s how to go with the former.
So much money
Yes, compared to your Maccas paycheck, your annual salary is huge. But take out taxes. Take out super. Divide the number by 26. Now you’re looking at what your take-home is, and I’m willing to bet it ain’t as plum as that enormous yearly salary looks.
Solution: Wait to see what your paycheck really looks like after the first month. Then draw up a realistic budget, that allows you to have fun (after all, this is your twenties) but also allows you to live a cash life and have some savings.
Purchase a new work wardrobe (and a new wardrobe)
You may feel as if you need an entirely new wardrobe, but be smart about what you buy. A couple of well-designed basics, that you can mix and match, will mean you have a smart looking wardrobe that doesn’t cost a bomb. Think about scarves and handbags (not tones, just a couple) to smarten and mix it up. While you’re at it, don’t buy an entire IKEA to stock up your new pad.
Solution: Buy good basics and don’t buy everything you see all at once. Start minimalist on your new apartment and add to it gradually as you work out what the essentials are. Think second-hand and discount as well.
Too young, too free
Just because you’re in your twenties, doesn’t mean that you won’t ever have an emergency or want to retire. Sure you’ve just started you’re first job, but the time to start preparing for leaving the workforce is now.
Solution: Set yourself up now. Contribute extra to your super, and set aside 6 months of expenses in an emergency fund. If you set yourself up properly when you’re in your twenties, things will be a whole lot easier in the long run.
Live like we do
Your friends are lawyers, accountants and fashion designers, and they live like it. You, on the other hand, are a struggling journo or working for community. Don’t march them expense for expense.
Solution: Live according to your salary. They’re your friends, they’ll be happy to make concessions. Don’t feel inferior because you can’t afford designer goods. It’s all trimming anyway.
Leave debt for later
The problem with this is obvious, I guess.
Solution: You’re never going to feel like you have enough money to pay off debt. Do it gradually, and do it consistently.
Use part of all that lovely money you’re getting to get you on your feet, and stay debt-free.
What are your tips for new earners, or experiences as a new earner?
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