Question: I’ve just started my first job. I’m from Tipperary but I’m renting in Dublin as I’m in the office four days a week. Renting is expensive, but I’m still comfortable with the cost in relation to my salary, and going home everyday is not a feasible commute, although I am home every weekend. Now that I’ve got a steady income, I want to get my finances in order. What are the top things I should be doing now to set myself up for the future?
Answer: Securing your first job is a big milestone, and it’s an oppurtune time to build strong financial habits that will serve you well in the years ahead. While retirement might seem far off, the decisions you make now can have a huge impact on your future security. Here’s how to get started:
1. Build a budget that works for you. Your first pay cheque might feel like a windfall, but without a plan, it can disappear quickly. A simple 50/30/20 rule can help:
• 50% on essentials – rent, utilities, groceries, transport.
• 30% on lifestyle – entertainment, dining out, hobbies.
• 20% on savings and investments – emergency fund, pension, or long-term savings.
Tracking your spending for a few months will give you a clear picture of where your money is going and help you adjust accordingly.
2. Start an emergency fund. Unexpected expenses – like car repairs or medical bills – can derail your finances. Aim to save at least three to six months’ worth of expenses in a separate, easily accessible account. Even setting aside a small amount each month will add up over time.
3. Join your workplace pension scheme. Retirement might feel like a lifetime away, but the sooner you start, the easier it will be. If your employer offers a pension scheme, sign up as soon as possible, especially if they match your contributions – it’s essentially free money.
If you’re unsure how much to contribute, a good starting point is at least 10-15% of your salary, including any employer contributions. The earlier you begin, the more you’ll benefit from compound growth.
4. Pay off any debt smartly. If you have student loans or credit card debt, focus on clearing high-interest debt first. Credit card balances, for example, can grow quickly if left unpaid. Try to avoid only making minimum payments – paying more will save you money in the long run.
5. Save for a mortgage deposit. One of the biggest financial goals for many young people is buying a home. The earlier you start saving for a deposit, the easier it will be when the time comes. Here’s how to make it a priority:
• Open a dedicated savings account: A separate savings account or a first-time buyer savings scheme will help you keep track of progress and earn interest.
• Set a realistic savings goal: Most mortgage lenders require a deposit of at least 10% of the property’s value, though the more you save, the better the mortgage deal you’ll be able to avail of.
• Automate your savings: Set up a direct debit to transfer a fixed amount into your savings each month. Even small amounts add up over time.
6. Get the right insurance. Now that you’re earning, you need to protect yourself and your finances. Key policies to consider:
• Health insurance: If this is not provided by your employer, look into a policy that covers unexpected medical costs.
• Income protection: This can provide financial support if you’re unable to work due to illness or injury.
• Life insurance: If you have dependents, you may need cover beyond any workplace scheme.
7. Avoid lifestyle inflation. It’s tempting to upgrade your car, rent a bigger place, or spend more as your salary increases. While it’s fine to enjoy your earnings, make sure to increase your savings and investments at the same time. This will help you build wealth rather than just keeping up with expenses.
8. Seek financial advice when needed. Making the right financial decisions early on can set you up for life. If you’re unsure about pensions, investing, or insurance, getting advice from a financial planner can help you make informed choices.
Try the 50/30/20 rule: 50% needs | 30% wants | 20% savings
Aim for 3-6 months of expenses in an easy-accessible account.
Join your pension scheme. Don’t miss out on employer contributions.
Clear high-interest debts first. Avoid just making minimum payments.
Open a dedicated savings account. Automate monthly deposits – even small ones count.
Consider health, income, and life insurance as you build your independence.
Upgrade your savings, not just your lifestyle, when your income grows.
Martin Glennon, head of financial planning at ifac.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness
Question: I’ve just started my first job. I’m from Tipperary but I’m renting in Dublin as I’m in the office four days a week. Renting is expensive, but I’m still comfortable with the cost in relation to my salary, and going home everyday is not a feasible commute, although I am home every weekend. Now that I’ve got a steady income, I want to get my finances in order. What are the top things I should be doing now to set myself up for the future?
Answer: Securing your first job is a big milestone, and it’s an oppurtune time to build strong financial habits that will serve you well in the years ahead. While retirement might seem far off, the decisions you make now can have a huge impact on your future security. Here’s how to get started:
1. Build a budget that works for you. Your first pay cheque might feel like a windfall, but without a plan, it can disappear quickly. A simple 50/30/20 rule can help:
• 50% on essentials – rent, utilities, groceries, transport.
• 30% on lifestyle – entertainment, dining out, hobbies.
• 20% on savings and investments – emergency fund, pension, or long-term savings.
Tracking your spending for a few months will give you a clear picture of where your money is going and help you adjust accordingly.
2. Start an emergency fund. Unexpected expenses – like car repairs or medical bills – can derail your finances. Aim to save at least three to six months’ worth of expenses in a separate, easily accessible account. Even setting aside a small amount each month will add up over time.
3. Join your workplace pension scheme. Retirement might feel like a lifetime away, but the sooner you start, the easier it will be. If your employer offers a pension scheme, sign up as soon as possible, especially if they match your contributions – it’s essentially free money.
If you’re unsure how much to contribute, a good starting point is at least 10-15% of your salary, including any employer contributions. The earlier you begin, the more you’ll benefit from compound growth.
4. Pay off any debt smartly. If you have student loans or credit card debt, focus on clearing high-interest debt first. Credit card balances, for example, can grow quickly if left unpaid. Try to avoid only making minimum payments – paying more will save you money in the long run.
5. Save for a mortgage deposit. One of the biggest financial goals for many young people is buying a home. The earlier you start saving for a deposit, the easier it will be when the time comes. Here’s how to make it a priority:
• Open a dedicated savings account: A separate savings account or a first-time buyer savings scheme will help you keep track of progress and earn interest.
• Set a realistic savings goal: Most mortgage lenders require a deposit of at least 10% of the property’s value, though the more you save, the better the mortgage deal you’ll be able to avail of.
• Automate your savings: Set up a direct debit to transfer a fixed amount into your savings each month. Even small amounts add up over time.
6. Get the right insurance. Now that you’re earning, you need to protect yourself and your finances. Key policies to consider:
• Health insurance: If this is not provided by your employer, look into a policy that covers unexpected medical costs.
• Income protection: This can provide financial support if you’re unable to work due to illness or injury.
• Life insurance: If you have dependents, you may need cover beyond any workplace scheme.
7. Avoid lifestyle inflation. It’s tempting to upgrade your car, rent a bigger place, or spend more as your salary increases. While it’s fine to enjoy your earnings, make sure to increase your savings and investments at the same time. This will help you build wealth rather than just keeping up with expenses.
8. Seek financial advice when needed. Making the right financial decisions early on can set you up for life. If you’re unsure about pensions, investing, or insurance, getting advice from a financial planner can help you make informed choices.
Try the 50/30/20 rule: 50% needs | 30% wants | 20% savings
Aim for 3-6 months of expenses in an easy-accessible account.
Join your pension scheme. Don’t miss out on employer contributions.
Clear high-interest debts first. Avoid just making minimum payments.
Open a dedicated savings account. Automate monthly deposits – even small ones count.
Consider health, income, and life insurance as you build your independence.
Upgrade your savings, not just your lifestyle, when your income grows.
Martin Glennon, head of financial planning at ifac.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness
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