5 Financial Mistakes To Avoid When Saying ‘Yes’ To Your First Job

Branislava Živić / Stocksy

Branislava Živić / Stocksy

By: Courtney Connley

While college is the perfect time to explore your freedom, expand your educational realm and make connections with new friends, those best years of your life are often had without any practical experiences or lessons that prepare you for financial success as a working adult.

Yes, being a 20-something professional means that you have years before retirement and a bit more time to be young, wild and free. However, dismissing smart financial habits now will only lead to harm in the long run. So if you’re a soon-to-be college graduate, or recent graduate, who is ready to enjoy the fruits of your first job, be sure to avoid the below mistakes that can have a lasting impact on your financial success.

1. Settling for less pay than you deserve

With a labor market that’s still far from ideal for recent graduates, it’s understandable that many young professionals are eager to take their first job offer without posing any questions. However, being stuck in a position where you’re underpaid for your hard work is no fun. Before going into any interview, be sure to research the average salary for that position and don’t be afraid to negotiate with a company if the offered pay is below industry average. According to a study by NerdWallet and Looksharp, roughly 38 percent of recent graduates negotiate their salary with employers, despite nearly 75 percent of employers saying they have room to increase their first offer by 5-10 percent. Of the students who do negotiate their salary, roughly 80 percent are at least partially successful with receiving their requested pay.

2. Not investing in your company 401(k)

Yes, retirement may seem far away, but the sooner you invest in your 401(k), the better. When accepting a position, be sure to ask your employer about their 401(k) policy and if they offer matching funds. If your employer does offer matching funds, then make sure you’re contributing enough to your 401(k) account to take advantage of that benefit. If they don’t offer matching funds, then look into opening up an Individual Retirement Account (IRA).

3. Putting off student loan payments

While student loan payments are different according to every person’s financial situation, be upfront and honest about your money in relation to your student loan debt. If you’re in a comfortable financial situation, don’t defer payments just because the option is there. Some private loans may have an upfront fee for deferment, and in the case of an unsubsidized loan, any unpaid accrued interest will be added to the capital. This means that deferring your loan payments can potentially increase the amount you owe in the long run.

4. Not investing in an emergency fund

Regardless of whether you’re out on your own or still living at home while working your first job, understanding the benefit of an emergency fund is invaluable. After settling on a salary and breaking down how much you will earn each paycheck, take time to do a ratio breakdown of your finances that best suits your lifestyle. Maybe an 80/20 rule works where you spend 80 percent and save 20 percent. Whatever ratio you decide on, make sure you’re putting a fair amount into savings so you’re not left in a panic if an unexpected financial emergency arises.

5. Maintaining credit card debt

While owning a credit card is a great way to establish credit early when you don’t have any big purchases under your belt, credit cards are also an easy trap for you to dig yourself in a deeper hole of debt. If you use your credit card to make a purchase, make sure that you pay that item off right away. Or if you’re already knee-deep in credit card debt, adjust your budget to ensure that you’re on time with each monthly payment and put a halt on using your card for further purchases. Get in the mindset of thinking if you have to rely on a credit card to purchase something, then that something is likely out of your price range.


Courtney Connley is a writer, editor and digital journalist with a sweet spot for storytelling and helping millennials win in the workplace and in life. She considers brunching to be a full-time hobby and enjoys anything that involves avocado or a good book. You can stay up-to-date with her latest work at courtneyconnley.com and follow her latest happenings on social media @classicalycourt.