12 Days Of Finance, Day 4: The Financial Checklist Every 20-Something Needs When Starting a New Job

Just graduated and ready to take control of your finances? This episode is packed with the essential money moves you need to crush your career and financial goals from day one.

Here’s what we’re covering:

• Unlock your future: Why workplace pensions are your secret weapon for long-term savings.
• Invest in YOU: Explore employer-backed opportunities to grow your skills and income.
• Meal prep vs. eating out: How everyday choices can save you big bucks.
• Plan your next move: Set yourself up for career and salary growth right from the start.

Transcript

Speaker 1: 0:00

Hey guys, and welcome back to the Penalty to Pounds podcast with your host, kia, and this is a podcast where we aim to dispel your myths, simplify difficult financial jargon and rectify your own personal problems. I hope you've had an amazing Christmas day. I want to bring you another episode of the 12 Days of Finance series that we've currently got going on, and this is a series geared towards helping you master your finances ahead of the new year. Today, I thought I would do something slightly different, something a little bit different, and we're going to be answering a dilemma, and this is dilemmas that I found on Reddit, and the one today is talking about tips for a 22-year-old starting their first graduate job. So, as per the title, I'm 22, about to start my first graduate job this summer. I'm only starting on £30,000 per year, but I want to start my FIRE journey ASAP. If you're not sure what FIRE means, fire means Financial Independence, retire Early. We've done an episode on that on the Penny Twins podcast already, and I'll link it in the episode description and put it on screen for you to have a look at. So this person says are there any tips, slash words of advice for someone young like me? I want to do some living alongside saving. Employment doesn't have any significant perks like stock options, just faster than average promotion. Slash progression, basically, is anything that you wish that you knew. Slash were told at my age. Any words of advice, thank you. So this is a big one for me and one that I think is very poignant to a lot of people. Whether you're in your graduate job, maybe you're in your second, third job, I think it's still very relevant. There's a few things that you can consider financially, especially to help you to set up yourself to either retire early, if that is your plan, or be able to have a good amount of money saved up once you get to your retirement point.

Speaker 1: 1:26

Number one is to have a look at your workplace pension. In the UK, once you hit the age of 22 and earn more than £10,000 per year, you'll be automatically enrolled into a workplace pension. Now, this is such a great tool, not only for your future, but just to be able to build up assets and capital for future you. The reason being is that you get to benefit from a deferred pay rise. It's essentially free money that you get. Let me explain. So. When you come to your workplace pension, a minimum of 8% needs to be contributed to your pension. The typical makeup of that is that your employer needs to contribute a minimum of 3% and then you'll make up the difference. So that's 5% from your income income, making a total of eight percent going into your pension fund. You also get to benefit from something called tax relief on your pension. So for every 100 pounds in your pension fund, 80 pounds will come from you and 20 pounds will come from the government in the form of tax relief.

Speaker 1: 2:19

What we hear right there is there's a lot of money that you can get for free, for nothing. Some really good employers will also go as far as matching your contributions. So we go back to the first example of putting in 5%. If you have an employer that matches your contributions, they will also put in 5%. So that's a whole 10% going into your pension fund and only 5% is coming from your income. With that, depending on which one that is, you need to look up and talk to maybe your HR team or speak to your work, depending on which one your employer does. That is free money that's going in, and lots of people don't see it as free money because you don't get access to it right now. It's not a pay rise, it's not something that you take home every month. You don't see that for another 20, 30, 40 but it is free money that you're going to get. So, especially if your employer matches your contributions, you might want to consider increasing your contributions, because then your employer will increase theirs too. So having that in the back of your mind and really going to have a look and seeing what kind of pension fund your employer offers is really useful.

Speaker 1: 3:17

The second thing that I'd say to make sure you go and do is to look at investment opportunities that you've got within work. When I say investments, I don't just mean putting money into stuff. I know in this example they mentioned that there are no stock options, but depending on where you work, there might be a chance to invest in stocks of the company that you work at at discounted rates. I'm not just talking about that, I mean investing in yourself. One job that I worked at before I started Pettis Pounds. They allowed us I think it was up to about a thousand pounds that we could spend that was paid for by the company to invest in ourselves.

Speaker 1: 3:49

A lot of companies will pay for qualifications certifications that are going to help you be better at your job. My job in particular allowed us to look into something that was going to build us as a person. So we had a thousand pounds that we could spend a year into something that've always wanted to do. Someone I knew took piano lessons. Another person took Japanese lessons. The world is your oyster if you have something like that, even if it is specific to your work.

Speaker 1: 4:12

So getting qualifications and certifications are going to boost you at work. Take advantage of those things. Not every workplace offers them and it gives you a chance to build up your skill set and not on your own dime. So I highly recommend looking into it and not on your own dime. So I highly recommend looking into it and seeing if your work offers anything like that that you can invest into.

Speaker 1: 4:30

And another thing that I think is a really big one is don't fall into the trap of buying out. Oh my gosh, the amount of money that you spend buying food out is crazy. Even if you've got a meal deal every day, five days a week, that is £17 a week. Do that a month £68 a month. A basic Tesco or whatever meal deal £3.40, £68 a month. Do that a year. That's £816 a year. I'm sure many of you listening and watching know that there's a lot more things you could do for £816. That isn't just food.

Speaker 1: 5:08

So figure out ways that you can meal prep at home, bring things in and not spend tons of money on lunch, because I promise you it does add up, even if you see your colleagues do it all the time and you think, oh, but it's a social thing, I get it. I've had people tell me oh, you know, my colleagues do it, I want to do this, that. And the third, especially if you're starting out, you're not on a high salary, so every penny genuinely does count. You will notice a difference. If 68 pounds leaves your account every single month just to feed yourself, you could probably take half of that, even a third of that, and buy ingredients and meal prep and bring in lunch every single day. So figure out ways you can cut costs when it comes to lunch, because food is going to be a massive, massive expense.

Speaker 1: 5:57

And lastly, my point would be to make sure that you're always looking at what is ahead. I think one thing that we can learn from the previous generations and I know that my dad will say freely is that promotions and changing jobs isn't something that they're necessarily good at. That's why you hear people who've been in jobs for 10, 20, 30 years. They might have gone up a rank or two, but not very often. So even if you're just starting out, always have a vision of where you want to end up.

Speaker 1: 6:11

Check and see if there's career progression in your current role and what you're doing in your current company. If not, after about a year, year and a half, two years, once you feel like you've gotten the skills that you need, look elsewhere and see if you can go and get another position, maybe slightly higher up. That's going to increase your salary because that will allow you to invest more, put more money away and reach your financial goals quicker. Hopefully, that helps you to plan ahead when it comes to your finances In your first job. I know it can be very daunting I felt the same but these are some of the things that you can do from early on to get ahead with your finances and keep that in the back of your mind when you're working. Have a good day and I'm back again tomorrow for another episode of the 12 Days of Finance series. Bye, guys.