Financial wellness tips for first-time employees

January 1, 2022 16

Starting a new job can be pretty overwhelming. You begin to feel independent, standing on your own foot with so much more confidence than ever. At this point, you start to picture your life, the career you’ll build, the people you’ll meet, and most importantly, achieving your personal goals, including financial freedom.

But achieving financial wellness is easier said than done. In general, one can only accomplish financial independence by practicing financial responsibility. Many new employees tend to get carried away so easily. So what should you do in such cases?

Saving should be on top of your priorities. Without savings, you’ll find it difficult to become financially independent even though you’ve been working for decades. Here are some financial wellness tips for new employees so you can enjoy your life ahead.

Budget your income

The initial step in achieving financial independence is learning to budget your money. Know your needs and wants, and always limit every expense.

Budgeting may sound cliche. However, we cannot just ignore the importance of this essential money management tip. It’s the pillar in practicing great financial habits. A budget is a statement that records the anticipated income and all expenses for a certain period. Most people budget their money monthly, but you can create your own period according to your income.

Save as much as possible

Many people think that saving money should always include high amounts, perhaps 20% of the total salary. But people lead different lives with different priorities, so save only what you can. Keep in mind that small savings are still much better than not having savings at all.

After all, you’re just starting your journey. Over time, your income will increase, and you will have the chance to increase how much money you put into your savings too. The practice of saving can help you during financial crises.

Manage your debts

Studies show that most millennials have one long-term debt, from auto, home, education, or personal loans.

The truth is, there is nothing with having a loan under your name. It’s actually a good indication that you get approved for these loans. However, it’s imperative to wisely manage your debts as many companies use fraud analytics tools to determine people with poor financial standing. Poor debt management decreases your chance of getting approved for loans in the future, so make sure to pay off your monthly dues on time.

Create an emergency fund

One of the common mistakes of young employees is neglecting emergency funds, thinking that they are too young to get sick and be in a hospital bed. But many things can happen in a snap. Remember, accidents happen.

Apart from your savings funds, make sure to set up an emergency fund. Indeed, you want to enjoy your money, and that’s understandable. Yet life is full of uncertainties, so you need extra cash to overcome sudden financial burdens.

Medical emergencies, natural calamity, robbery, or fire can all greatly impact your finances. Without emergency funds, you’ll end up with more debts, which can cause significant financial losses.

Investing

There are several ways to invest and make your money work for you. Investing is an excellent practice, so you’ll have more income other than your monthly corporate salary, but where should you invest? Here are some investment ideas for young employees:

Being an adult is tough. But bear in mind that being an adult in the future without the capacity to work for your daily needs is tougher. So invest while you’re still young and let your money for you, allowing it to grow over time.

For example, do you know anything about how you can earn yield on USDC? If not, then you need to improve your knowledge quickly if this is the kind of area you are interested in. Or, perhaps you want to invest in a property to rent out, giving you an income that you don’t really have to do anything for? Both are fantastic options, it just depends on what works best for you.

Talk to a financial expert

You might think that managing money is easy. After all, you’ve survived college and made it through one of the most challenging times of your life. But managing your money as a working individual is a bit more complicated. It’s not as easy as keeping $20 in your drawer so you can have a nice meal for the following day.

Talk to an expert who can help you determine your financial goals and achieve them at the specified period. Financial advisors understand how challenging it is for young employees to set their priorities straight because of several distractions (shopping, partying, new gadgets, etc.) If you can’t figure out how to properly manage your money so you can save and invest, talking to a professional can help.

Being an adult with financial independence is one of the greatest things you can achieve in life. Before you spend your money on something unimportant, take a moment to reflect on how hard you’ve worked to earn. Practicing wise decisions is the key to accomplishing financial independence even at a young age.