How Not To Be A Money Disaster In Your First Job

So, you’re an adult. No, not just a legal adult who probably hasn’t even finished high school. A full-fledged adult with a degree, grad job and HECS debt to boot.

Between paying rent, appeasing your brand new boss, and coming to the upsetting realisation that train tickets cost a lot more when you’re not a student, your first ‘proper’ (i.e. not flipping burgers on a Saturday morning) job can be tricky to navigate.

Here are six things you should definitely not do if you want to win at grad life.

1. Live like the Wolf of Wall Street

While your salary might make you feel like the richest person on earth, unless your name is Bill Gates, you probably aren’t.

Your income might be huge compared to what you’re used to but, relatively speaking, it’s on the small side. That means that, if you want to sign up for a whiz bang credit card, you should probably exercise some discretion.

If you absolutely must sign up for a credit card, make sure it has a low standard interest rate and a low limit. And, above all else, make it a financial priority to pay off the balance in full each month to avoid getting into debt.

If you still don’t think you can be trusted, but want to be able to shop online, MasterCard and Visa debit cards both allow you to spend money on the net, without letting you purchase beyond your means.

They might not make you feel as cool as Jordan Belfort. But, do you remember how that movie ends? A jail term and no Oscar for Leo.

2. Buy something to impress your office crush

Or a mate. Or a co-worker.

One of the biggest things to remember about your new-found wealth is that it is yours, no one else’s. And any choices you make regarding it should be solely about you.

Take this anecdote from The Barefoot Investor:

“Two of my mates bought cars to impress girls. Now 10 years on, both adamantly attest there are easier ways to impress ladies than dropping $42,000 ($30,000 plus $12,000 on repayments) on a car – like a deposit on a pad. Girls like cars. Women like homes.”

So, before you buy a car with a price tag that equals your annual salary, or sign yourself up for a piece of plastic so that you can wear the same shoes as the partner of the firm, ask yourself: Is this purchase really for me? And if it isn’t - and you don’t have some charitable justification for it - don’t make it.

3. Forget about that ol’ $15,000 you maybe, kind of, owe the government

Remember the several years you spent lounging around a public education institution at the government’s expense? No? Well, they certainly do.

The average HECS-HELP debt rose from $10,600 in 2006 to $15,200 in 2012. The current wage at which the government expects you to start paying that bad boy back is $51,309, which is probably less than what you are earning now at your grad job.

Even if you’re earning below the threshold, you can still make a head start on your study debt by making voluntary contributions. Although legislation was proposed at the start of this year to remove the financial bonus for making voluntary contributions, these changes are yet to pass through the Senate. As a result, any voluntary payment of $500 or more will reduce your debt by 105% of your payment.

So, if you pay $1000, your debt will be reduced by $1050. And you just earned yourself $50: hello, lunch money for the whole week!

4. Treat Friday afternoon drinks like the Mykonos stop on your Contiki tour

As you get older, the line between your professional life and your private life begins to blur. All of a sudden your boss wants to have coffee, your colleagues want to start a sports team… and there’s champagne at work events.

Whatever you do, don’t get hammered.

Yes, it’s free and, yes, your student brain has been hardwired to consume all free alcohol within a 100 mile radius, but getting wasted at Friday afternoon drinks doesn’t exactly scream ‘promote me’.

5. Take trips to the Bank of Mum and Dad.

Asking your parents for money was fine when it was spaghetti day at the tuckshop and you had already spent your $2 pocket money on lollies three days prior. It’s less fine when you’re an employed twenty-something who needs to make rent because you accidentally blew the last of your pay check on a round of shots on Saturday night.

While some financial catastrophes might mean that you have to rely on family support, if you’re worried about running out of money, the best remedy is to plan in advance.

Take the time to do a proper, written budget. Don’t lie to yourself about your expenses (include the Marie Claire magazine you buy on the way home from work), and find a way to make your income work for your lifestyle.

It’s also a good idea to start an emergency savings account, so that you aren’t caught out if something happens to your income stream. Search the savings account market for an account with a high interest rate attached. It’s also a smart move to set up direct deposits to make sure you put a little away every time a pay check comes in.

6. Think superannuation is an ‘old person problem’

Warning: serious adult talk coming up.

Now that you’re a proper grown up - or, at least, pretending to be - your parents have probably started talking to you about investments (*shudders*).

But, put away the stocks report mum and dad, you already have one big investment: your superannuation fund.

You’ve probably worked a few part-time jobs in your time, which means that you should have some super already. Unfortunately, often part-time workers don’t pay attention to their super, accruing various accounts from retail, hospitality and administrative jobs and, as a result, dwindling away whatever super they have by paying fees on each of these accounts.

When you get your first ‘proper’ job, you should prioritise consolidating all of those little bits and pieces of super you might have from various part-time jobs into the one account. And, while retirement is a long way off, your old and grey self will thank you for any voluntary contributions you make to your account.