Gainful employment is a beautiful thing, but as Fiscal Times senior Work + Money editor Suelain Moy writes, it’s just “the first step toward financial independence.” In an informative post titled “New Job? Try These 9 Smart Money Management Tips,” Moy offers excellent advice for young workers who are earning their first paychecks and looking to make some sound financial decisions. Read on for a summary of her advice.
1. Get in the 401k — Many companies offer retirement plans, and since they’re a chance to put aside money that isn’t taxable until you withdraw it, Moy recommends contributing the greatest percentage you can. If there’s no 401k, look into an IRA. The folks at Black Rock, Fidelity, and other such firms can help the process along.
2. Get Health Insurance — As with retirement plans, many employers offer health benefits. Make sure you sign up, and that you take note of how the premiums, deductibles, and various out-of-pocket expenses will affect you. If the company doesn’t provide insurance, make sure you purchase some on your own or enroll through your parents, if possible.
3. Tackle that Student Debt — Now that you have money coming in, you’ll need to take care of your student loans. Set up recurring payments to make things easier and consider making extra payments on the loans with the highest interest rates. If you find yourself in danger of falling behind, do some research to find out if your line of work (or some other factor) qualifies you for loan forgiveness.
4. Be Frugal — You don’t need to pay $5 every morning for a cup of coffee, and by bringing your own homemade lunch and jogging in the park instead of on those fancy treadmills down at the gym, you can save even more money. These are just a few examples of how you can avoid the kinds of frivolous spending that gets people into trouble. It’s more about being smart than being cheap.
5. Use Credit Wisely — While you need to establish credit and should therefore get your hands on some plastic, don’t use that fancy new card to buy stuff you can’t pay off at the end of the month. The interest rates, after all, are insanely high.
6. Save It for Later — It’s good to have a rainy-day fund of three to six months salary, if not more, so sock away what you can. To get a better sense of where your money’s going, keep track of expenses and see what can be trimmed down or eliminated altogether.
7. Make Investments In Yourself — This one’s not strictly about spending money, though it’s not a bad idea to spring for things like courses and books that help you build your skills and become more marketable. It’s also worth investing your time and doing things like attending networking events and taking advantage of whatever training opportunities your company offers. “Collect as many experiences as possible,” Moy writes. “Take every opportunity to learn new skills and software on the job and off.”
8. Ask Yourself Whether You’re In the Right Place — Many jobs come with 60- or 90-day trial periods. These aren’t simply there for companies to assess whether you’re a good fit; they also exist so that you can suss out whether you’ve landed somewhere that meets your needs. If the job’s not right, consider finding something else. In fact, Moy says, you might want to keep looking during the trial period.
9. Never Lunch Solo — According to Moy, “your network is your net worth.” What she means is that relationships with others will undoubtedly fuel future success, so instead of sitting at your desk while eating that sandwich — the one you made at home to save a few bucks — eat with coworkers and start building some bonds that will serve you well down the line. Moy also recommends finding a mentor to offer advice and guide you through tough times.