You're Earning Now, Let's Make it Count!
You'll Thank Yourself Later!
Congrats, New Earner! You've landed that first job (or maybe a new one!), which means one exciting thing: you've got an income! But hold on to your payslip just a sec – before you blow it all on a celebratory avocado toast (joke!), it's time to get your finances in order. Think of it as investing in your future self.
Here at gradragstoriches.co.uk, we've put together a to-do list to get you started:
Your Need-To-Do List
1 .Set a Budget and learn to spend intentionally: This is your roadmap to financial success.
You might be tempted to wing it with your newfound income, but a budget is your financial BFF.
It helps you track your income and expenses, so you know exactly where your money goes. No more nasty surprises at the end of the month!
Be intentional with your spending and learn how to save and invest effectively. Spend less than you earn, pay yourself first, and automate.
2 .Build an Emergency Fund: Life throws curveballs.
Unexpected bills, a broken phone, the dreaded washing machine breakdown. Having a safety net with a few months' worth of expenses saved will stop these from turning into financial disasters.
3 .Join the Company Pension and Set Up a LISA: free money you don't want to miss out on!
You might not be planning your retirement just yet, but trust us, future you will thank you!
Many employers automatically enrol you in a pension scheme and provide additional contributions, as well as giving tax back. This is free money for your golden years (thanks boss!). Learn about your options and consider contributing a bit extra if you can to maximise your employer contribution.
Your pension will probably be invested in the default fund rather than a low cost global equity fund. Grad Rags has a blog dedicated to sorting this to maximise your profit.
The Lifetime ISA or LISA also gives you free money from the Government – up to £1000 per year! But with some drawbacks. Need Help? Find out more here.
Remember, the sooner you start, the more time your money has to grow thanks to the power of Compound Interest!
4 .Debt? Get It Gone!: Credit cards and loans can cripple your finances if left unchecked.
Develop a plan to pay debt off as quickly as possible. The sooner you're debt-free, the sooner you can start saving for the fun stuff!
Prioritise clearing high-interest debts first, and consider strategies like snowball payments or the debt avalanche method.
5 .Think Insurance: Not the most exciting topic, but essential nonetheless.
You might be young and healthy (famous last words?), but accidents happen. Think about basic life and health insurance if you have dependents, and Home insurance – they could save you a fortune if the worst happens.
Remember, it's about protecting yourself and your loved ones if the unexpected happens.
6 .Draft Your Financial Plan: Set Those Goals! Now is the perfect time to dream big.
Now you're earning, it's the perfect time to start setting some financial goals! Whether it's a dream holiday, that new gadget you've been eyeing, a deposit for a flat, or how you will invest, having clear goals will keep you motivated and focused.
7 .Financial Education Forever: Knowledge is power!
Read personal finance blogs (like this one!), listen to podcasts, take online courses – anything to boost your financial literacy. The more you know, the better equipped you'll be to make smart financial decisions throughout your life.
So, get out there, earn that cash, and be Grad Rags to Riches! Check out our blogs at gradragstoriches.co.uk for tips, tricks, and expert advice on all things financial.
What Else You Need to Know
Taxman Takes a Cut: You might not see all your hard-earned cash in your pay packet.
Income Tax and National Insurance are automatically deducted from your salary and paid to HMRC by your employer. Understanding tax basics helps you budget for what you actually get paid.
If your annual salary is £35,000 per year how much will you take home each month after tax, pension payments and any other costs like student loans? It may surprise you – the answer is roughly £2,250 per month.
All the details can be found on your payslip or via your Payroll Department.
Sick Pay, Holiday & Benefits: Check your employment contract to understand your entitlements.
Your job might come with some awesome benefits like bonuses, company discounts, or even a share ownership scheme. Sick pay, holiday allowance, health insurance, and even benefits like gym memberships can make a big difference to your overall financial picture.
Find out exactly what's on offer and take advantage of them! Don't leave money on the table!
Credit Card Conundrum: Credit card companies love young earners!
They'll shower you with offers, but remember, credit cards are a double-edged sword. Spend wisely, and only borrow what you can afford to Pay Back in Full! – or you could end up with sky-high interest charges.
Life's Not All Work: While saving is important, don't forget to enjoy your hard-earned cash. Budget for some fun after you've taken care of the essentials.
Starting work is an exciting time. By taking control of your finances from the get-go, you'll be setting yourself up for a bright and secure financial future. Use our To-Do List and resources as a springboard, and remember – we're here to help every step of the way!
If you want to know more, visit gradragstoriches.co.uk How to Build Wealth
Or
Check out the playlist on our YouTube channel The Simple Steps to Become Wealthy!
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