Early Career Financial Journey
According to many studies, US consumers score poorly in financial literacy tests. Those low average scores persist across age, sex, and income with the best average scores in the 60% range. That’s a failing grade.
Not understanding how to make an informed early career financial decision puts you at risk of losing time and opportunity to build the financial resources you’ll need. Financial mistakes may create stress and a rockier road which you should try to avoid.
How financially literate are you compared to the average American? You can take one of the shortest of those financial literacy quizzes here (it’s only 6 questions) to get a taste of the questions asked.
Your First Job and First Financial Decisions
Here you are beginning your first job. It may even be your first day of your first job when you are asked if you would like to participate in your employer’s retirement plan. Will you? Should you? What percentage of your pay should you contribute? These are questions you may not be prepared to answer when asked.
If you work for an employer with at least 5,000 employees, there’s a 98% chance that employer offers a retirement plan. The smaller the company (by number of employees), the lower the chance the employer offers such a plan. If your employer does not offer a retirement plan, you can always open your own retirement account, such as an IRA or use another strategy.
This first early career financial decision–which could become your largest lifetime financial asset–may be trickier than you think. Here’s why.
Early Career Resources
Early Career Insurance Basics
The EMILY rule. Early money is like yeast.
Like it or not, you’re in the money management business, managing your money. If you multiply how much you anticipate earning this year by the number of years you anticipate working until you retire, you’ll see a large number. That’s exciting. It’s also powerful. You’ll need a strategy to manage your lifetime earning power so it accrues to your benefit.