First Job – 3 Financial Steps to Take

You have done the hard work and secured your first step on the career now its time to make smart choices.

Join the company pension scheme – This is something a lot of 20 somethings won’t bother with or prioritise but by contributing to your pension now will save you a lot of money in the future. Due to the power of compounding – the longer you give your money to grow the more you will have in 40 years. Often large corporates in Ireland match your contributions so if you give 5% of your salary they will give 5% – ensure that you don’t lose out on matching contributions.

For example if you are a newly employed graduate on a starting salary of 21000 and you employer offers to match your contributions to your pension up to 5%. It will cost you just €66 a month to contribute €175. This may not seem like much but if you contribute for a year then stop that is €2100 which could grow to €45621 by the time your 60 if you average a return of 8%. If you continue contributing the same amount throughout your working life and it achieves the same average return of 8% this €66 monthly cost to you would grow to over €500,000.

In your 20’s between you and your employer you can contribute up to 15% of your salary to you pension and still avail of tax benefits.

Get Mortgage ready –Nearly every Irish person in their 20’s aim to get on the property ladder as soon as possible. Give your self the best chance by starting a savings habit that will build your deposit and also prove to the banks you will be able to meet mortgage repayments. Avoid building up credit card debt or becoming overdrawn as well as setting up a direct debit to you savings account every month. Check out our regular savings comparison table to find the best rate.

Avail of any benefits offered by company – Find out what benefits your employer offer and make sure you avail of them. Some companies offer health insurance/dental insurance/travel insurance make sure you are registered as soon as possible on the company scheme and make sure you are not double insured on any of these. Avail of the tax saver on your commuter ticket or the cycle to work schemes.

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