Q: I’m 22, have just finished university and got my first full-time job. My parents keep telling me I should get my finances organised but I really don’t know where to start. Any tips? Taylor, Jolimont.
A: The fact that you are asking for advice and seem serious about getting organised is a great start.
Without knowing all of your circumstances it is hard to give detailed advice, but there are a few things you should do when starting your career.
First, understand your payslip, including how much you are earning before and after tax and how much is going into your superannuation.
Second, understand that you can choose a superannuation fund that suits you; you don’t have to use the default one your employer has.
You should also keep an eye on your actual super account balance to confirm that the money listed on your payslip is going into your account.
If you have moved out of home, review your insurance cover.
You will likely have some cover within your superannuation, so look at what you have and discuss with an expert what other cover you should get for your individual circumstances.
Things like whether you are married, have kids or own a home will all impact the type of cover you should get.
Once you understand your useable income – after-tax income minus fixed expenses like insurance, rent, phone and electricity – you are in position to put together a basic budget.
Allocate money to things like food and entertainment as well as how much you want to set aside for savings and investments.
This process really requires that you find a balance between how much you want to spend on short-term enjoyment versus long-term financial security because the more you save early in your career, the more you will end up with for retirement!
As published in The West Australian.