My-Financial Plan
Financial Planning for Your First Job
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Congratulations! Unless you paid your own way through college, this is the first
time in your life you are really on your own. This is also the first time in your life you are responsible for your
own financial planning. There are a few things you should be prepared to address immediately.
First, you need an understanding
of employee benefits and what applies to you. Although it seems way too early to think about retirement, if your employer
offers tax advantaged savings plans, you must understand them. At the very least you must enroll in any plan where your
employer matches a portion of your contribution to savings. To do less is to throw away tax free or tax advantaged money.
It is time to budget the
pay off of student loans. Although you may have financed them over 30 years, you should budget to have them paid off
in no more than five years so you can reduce total cost and become prepared for the next of your Life Cycle Events.
When starting your first job, you should manage the following:
- Budget to pay off student loans in five years
- Enroll in tax advantaged employee savings plans up to the company match
- Investigate the long term advantage of a ROTH IRA if employer offers it
- Develop strong debt/credit management skills
- Understand and participate in group life insurance
- Understand and participate in group health care
- Investigate group disability income insurance
- Check out employer cafeteria plans
- Investigate flexible spending accounts
- Control and manage debt
Life Cycle Financial Planning