Career Starters (Age 20-25) – What Should They Consider?
Young adults entering into the workforce face many changes and challenges. Generally, the main concern for a career starter is to ensure one can become financially self-sufficient. For those who wish to think about investing, this is also a good time to plan ahead.
If you are in this age group, here are some tips that may help you:
Create a budget – the key criteria of a budget is that income needs to cover expenses. The budget should be realistic, achievable, and regularly reviewed so that appropriate adjustments can be made. Make sure that you factor in loan repayments such as HECS-HELP, if you have used this Government assistance to pay for your studies.
Set a savings target that may be used as a deposit for future property purchase or even for a holiday. Try using a separate bank account and have part of your pay directly credited into this account on payday. This will help you become a more regular saver.
Build an emergency cash buffer of 2-3 months living expenses in case of unexpected events such as redundancy.
Think about staying at home longer if that can help you save rent and living expenses. These expenses represent a significant portion of your salary as a career starter.
Do your research so that you understand what kind of government allowances are available to help young adults. For example, if you are looking for full time work and need financial assistance, you may want to check your eligibility to receive Jobseeker payments.
If you can save regularly and wish to start investing now, you can consider putting some money into an investment such as a managed fund or exchange traded fund (ETF). The investment needs to be suitable for your investment risk tolerance as well as your investment time frame, which will depend on many factors such as your investment knowledge, experience, and personal preference, etc.
Whilst these are useful tips, it may also be worthwhile visiting a financial adviser who can answer your questions and point you in the right financial direction. If you wish to know more, email us on admin@japhiawealth.com.au
GENERAL ADVICE WARNING: The above is general advice only and does not take into account your personal circumstances or objectives. You should seek your own independent financial and tax advice to ascertain whether and how the above applies to your particular situation and whether it is likely to meet your objectives, prior to making any financial and investment decisions.