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  • Writer's pictureKel Galavan

Don't Be Vulnerable to Financial Mistakes: Top Money Lessons for First-Time Earners.

Congratulations, you've landed your first adult job and are starting to earn money! Finally, the world is your oyster, and you are ready to take it on, or so you think. This is an exciting time in your life, but it can also be overwhelming.

Managing your money well can be a tricky affair. Your first paycheck is probably the biggest amount of money you have received to date, but it is finite, and you have lots to do. Hence, setting the right foundations for your financial future is important.

In this post, we will discuss some of the main things you need to know about money when you start earning for the first time.

So if you are new to the game of money and life, fasten your safety belts, and here we go!

Know your cashflow

One of the most crucial things you can do when you start earning money is to create a budget or, as I call it, a cashflow. The money flows in from your employment, and it is up to you to ensure it is channelled to where it can have the biggest impact.

A budget is a plan that outlines your income and expenses. It lets you see where your money is going and helps you make smart financial decisions. Without a budget, it is easy to overspend and not save enough for what you want to achieve.

To create a budget, list all your income sources and monthly expenses. Your expenses should include your rent/mortgage, utilities, groceries, transportation, and any other bills you have. Once you have a clear idea of your income and expenses, you can allocate your money towards your savings goals, such as buying a house or going on a trip.

Start a rainy day fund.

Unexpected expenses can pop up at any time. It is rarely a matter of if and more of a matter of when and you need to be prepared for them. That's where a rainy day fund comes in. A rainy day fund is a savings account that you can use to cover unexpected expenses such as medical bills, car repairs, or a toilet incident with your phone.

Ideally, you should aim to save €500 to €1000 as a start, as this will cover most small but urgent expenses. As your responsibilities grow, home, family, and possessions, so should your rainy day fund.

Starting an emergency fund is a good idea too. This is for bigger things like a job loss or taking an unpaid sabbatical. It can be as simple as setting aside a small amount of money from each paycheck. You can also automate your savings by setting up a direct deposit into your emergency and rainy-day fund accounts.

Pay off high-interest debt.

High-interest debt is a millstone, a leech on your income. It can come in many forms and, ironically, is the easiest type of debt to get into. High-interest debt comes in the form of credit cards, payday loans, or even buy now pay later purchases. As such, this type of debt can quickly accumulate and cause a significant drain on your money.

When you start earning money, paying off any high-interest debt as soon as possible is crucial. The longer you carry a balance on your credit cards, the more interest you pay, which can add up over time. Often adding up to multiples of the original purchase.

Start by paying more than the minimum monthly payment to eat into that principle. You can also consider consolidating your debt into a personal loan with a lower interest rate. Then, once you have paid off your high-interest debt, put that extra money towards your rainy day, emergency funds, and other savings goals.

Invest in your future.

Investing is a powerful tool for growing your wealth over time. Einstein is renowned for saying that compounding is the eighth wonder of the world. He has been proven right time and again in this matter. When you start earning money, it's important to start investing as soon as possible. Investing can help you achieve your long-term financial goals, such as buying a house or becoming financially independent.

There are several ways to start investing, such as opening a retirement or brokerage account. It's essential to do your research and understand the risks associated with each investment option before you start investing.

Pensions, which I will dive into more later, are a great place to start your investing journey.

Live within your means.

Living within your means is one of the most important things you can do when you start earning money. Getting caught up in the excitement of having a steady income and overspending on things you don't need is way too easy. However, living beyond your means can quickly lead to financial stress and debt, and that's a tough place to get out from.

Living within your means can be simply put as spending less than you earn.

To live within your means, start by creating and sticking to a realistic budget. Avoid overspending on things you don't need and focus on saving for what you want. Living within your means doesn't mean you can't have fun or enjoy life; it just means you need to be mindful of your spending and put what you want first and foremost in life ahead of all those shiny objects.

Plan for your retirement.

I said I would come back to pensions, and true to my word, here we are. It's never too early to start planning for your retirement. When you start earning money, it's key to start saving for your retirement as soon as possible. The earlier you start saving for retirement, the more time your money has to grow and compound.

One of the most popular ways to save for retirement is through an employer's pension or a private pension if you work for yourself.

You can contribute a portion of your income into the account pre-tax. What that means is that your money goes in gross, before tax. This allows it to grow faster with more money while also lowering the amount of tax that you pay.

When planning for retirement, it's important to consider how much you need when that time comes. The good news is that the earlier you start, the less you need to put into it over time.

Don't be afraid to ask for help.

Managing your finances can be overwhelming, especially when you're just starting. There's no shame in asking for help. In reality, it is the smart thing to do, as money is a skill to be learned like any other. The more you practice it, the better you will get. There are plenty of resources available to help you manage your money, such as books, the Competition and Consumer Protection Commission (CCPC) website, the Pensions Authority website, financial advisors, online tools, and personal finance books.

If you what to learn the basics of getting to grips with money, check out my book Mindful Money, more money, more freedom, more happiness, or if you want to heal your relationship with money, I'm here whenever you are ready.

Final thoughts

Managing your money when you start earning for the first time is one of the biggest returns on investments you'll ever do for getting ahead and winning the game of money.

By creating a cashflow, starting an emergency fund and rainy day fund, crushing high-interest debt, investing in your future, living within your means, planning for your retirement, and asking for help, you can set down the right and solid foundations for a financially secure future.

Remember, managing your money is a life skill, and it's never too early to start; the more practice you put in, the greater a craftsperson you can become. Good luck!

I share money-saving tips and money mindset tips weekly in my private email list. It's free to join, so make sure you are subscribed to the Smart Money Times Newsletter and get your hands on my new ebook From Out of Control to Cruise Control, 20 Simple Things to Completely Transform Your Money Life.

Disclaimer: This is information – not financial advice or recommendation. The content and materials featured or linked to on are for your information and education only and are not attended to address your particular personal requirements.


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