"A budget is telling your money where to go,
instead of wondering where it went..."
John C. Maxwell

Sometimes it happens at 15, for others, it is 17 or maybe a bit later around 19 or 20. No matter when it happens, it is an exciting, daunting significant milestone. It is your first job! Entering the workforce for the first time is an exciting step for any young person. It brings with it the unmistakable sense of independence – you now have your own money and you can make decisions about what you do with it – and freedom (did someone say shopping?!).

The seduction of money is in the instant gratification of what you can buy with it now. From clothes and accessories to cars and technology… The allure of "things" can be great, and the consideration for long-term wealth is often forgotten with a mantra of "YOLO" (You Only Live Once). However, your first job can also become the foundation of greener pastures and long-term sustainable wealth (someone say, early retirement and travel?). The key to getting ahead is understanding where you are going, how your money can work for you and exactly where your money is going – is it being invested or wasted? The following tips outline the key considerations for anyone new to the workforce (who is keen to get ahead):

1. Get Clear on Your Super
Being from Gen Z (oh to be young again) you may not yet have discovered that it is a legal requirement that your current employer invests a portion of your wages from each pay-check until you reach retirement. This investment is called Superannuation. Over a lifetime in the workforce, your regular instalments of Super can really add up and if planned for effectively and tracked can serve to ensure you enjoy a comfortable and enriching retirement. It is really important to understand what your Super is doing and keep track of it from the beginning. Make sure you've only got one Super fund and that your employer is directing their required payments just into this fund and not another one they've set up for you. Given you'll have a long investment timeframe ahead of you, set your investment choice to a high growth option. This will give you a better chance of getting a higher rate of return on your Super money, and over a 40 year period, an extra percent or two in return makes a huge difference. Put a nominated beneficiary in place on your Super fund. This is nominating where you'd like to direct your Super if you die prematurely, and given there will likely be a life insurance component, there will be a decent amount of money to direct. Supplement your Super personally for a big impact. If you nominate even $20 of your own money each pay-check as a Super Contribution, this amount will compound the effect of your investment and make your returns bigger.

2. Allocate Your Weekly Spending
Now that you're earning more money, you'll also be spending more. Get into the habit early on of splitting up your money into these categories:
Take the time to work out what your weekly allowance will be for those daily expenses that can't be avoided, such as rent, board, groceries, public transport, car costs, fuel etc. (these are your general living costs) and set up a separate bank account for this allowance to go into. Then, set up another different account to receive a nominated personal spending allowance each week. This is the amount you can spend guilt-free on whatever you want – think shoes, clothes, computer games, entertainment (like going out or to the cinema). Lastly, the rest of your money should be allocated to savings and investing and transferred to another account. An aside from this can be an allocated saving into a separate account for bills, but it's vital to be working on your savings from the get-go. Once you have some surplus in this account you can begin to learn about different investment opportunities such as shares – which only need a small amount of capital to start investing. When you start early and take small steps often, you will find that your portfolio will progress quickly set you up early for a prosperous future.

3. Protect Your Income With Income Protection Insurance
Lastly, it is important to understand what protection is available and how it supports you. It won't take long for you to enjoy the benefits of having your own money from your first job, but it's never too early to protect your new found independence in case something happens (accident or illness) and you are not able to work. For a young person, the cost of insurance is relatively low and the benefits in case of emergency are worthwhile, so take the time to research your options and protect your greatest asset – yourself.
If you or someone you know is new to the workforce or would simply like to understand how to use your money to serve you better, contact us today for an obligation-free chat – we'll buy the coffee!