Be savvy from the word go
FIRST JOB? KNOW WHAT YOU’LL GET AND START AS YOU MEAN TO GO ON
Be sure to create boundaries, keep your financial affairs private.
If you’ve just landed your first job, the idea of earning a salary, enjoying company benefits and embarking on a new career will undoubtedly be exciting. Now is the time to take stock of your finances and fortify your financial position. Here’s how.
Understand your employment contract
While most employers are reputable, it is always advisable to understand the terms and conditions of your employment contract, to ensure that your rights are protected.
Request a copy of the signed employment contract and keep it in a safe place.
Ensure the contract includes all details on your remuneration, bonuses or commissions, leave, overtime pay, work hours and job description.
Get a medical aid
In the absence of a good hospital plan, it is unlikely you will be able to cover the costs of private hospital care.
One of the most important first steps is to get yourself registered on a reputable medical aid that provides hospital cover of at least 100% of medical aid tariff.
Most open medical schemes provide excellent hospital cover at selected hospital networks at more affordable rates.
Don’t be pressured into buying policies
If your company has a contracted financial advisor or broker, you may feel pressured into buying policies or setting up investments from him. But rather seek external, independent financial advice.
Protect your income
Having said that, taking out an income protection benefit should be a priority.
If you are disabled or suffer from a severe illness to the extent that you are unable to work, you will effectively lose your income and become a financial burden on your parents or a family member.
However, disability insurance is a highly technical area of risk and you need expert advice to ensure that you put the right cover in place.
Budget according to your net income
While your gross salary may sound great, it is your net income that you need to use when setting up your budget.
If you’re not sure what your net pay is going to be, ask human resources or payroll to do the calculations for you so that you can start working on your budget.
This is the time to ensure that you can live within your means and that you do not begin incurring lifestyle debt.
Prioritise your student debt
If you have student debt, put plans in place to pay off your debt as soon as possible.
Make sure you understand the structure of your student loan and keep track of the balance, charges and repayments.
Ideally, you will want to pay more than you owe every month, although this is not always possible.
To make sure that your debt does not grow, ensure you pay the minimum every month, on time.
Don’t be taken advantage of by family and friends
Being newly employed, you may be perceived by family and friends as being cash flush.
Earning a regular income, you may find yourself being approached for loans, expected to pay for everyone’s drinks when going out, or have unfair demands made on your finances.
Create your boundaries, keep your financial affairs private and be resolute in pursuing your financial goals.
Gareth Collier is a director at Crue Invest