First job financial planning tips that will help you enjoy every moment of work

Important financial planning for when you leave school and start working

16 November 2017 - 10:00 By NSBC
Image: 123RF

You’re finally done with school or university/college and about to start your first job. Your parents can no longer pay for your medical aid and insurance policies. The time has finally come for you to take control of your personal finances.

Too many young people throw caution to the wind, ignoring the policies that that their parents set up for them. But, you’re different. You want to make sure that you follow proper financial planning because you understand how important medical aid, insurance and investment policies are for your financial future.

Leaving school and starting your first job is the perfect time for you to take proper control of your personal finances and future financial planning.

Here’s four of the most important insurance and investment policies you must consider:

Medical Aid – A worthy health consideration
Road accidents, work injuries, sports accidents, crime and serious illness can make a serious dent to your financial situation. Public hospitals in South Africa don’t provide the best quality care either, so it’s important to get medical aid cover for yourself when you start working.

You don’t have to get the most expensive medical aid option available. If you’re still young and healthy call various medical aid providers and ask them what medical aid options best matches your profile Every year, check your medical aid expenses to make sure that you’re not overpaying for the medical aid cover you have. You might find that a hospital plan is all you need.

Image: Supplied.

Income protection – Get paid when you can’t workAs soon as you start your first job, you rely on your monthly income to support your lifestyle. What happens if suddenly you can’t work anymore? An income protection policy helps you take care of your financial responsibilities when you are unable to work.

There are many options available out there. Make sure that if you decide to take an income protection policy that you update it every time your salary increases.

Funeral Cover – Don’t let your death be a financial burdenNow that you’re earning your own money, you become responsible for your own life and death. Death isn’t a pleasant topic for discussion. But the reality is that funerals are expensive. If you die suddenly, your bank accounts and assets are frozen until the estate is wrapped up. That’s why it’s important to have a funeral policy in place. You can be buried with dignity and your family won’t have to pay for it.

There are many funeral policies available out there. You could find a policy that could cover you and your extended family like your siblings, parents, cousins, aunts and uncles.

Savings and Investments – Start preparing for your future todayThe greatest asset you have as a young employee is time. Use this time to your advantage, open an investment account. Start with an emergency savings account first. This way you have cash saved up in case you need it. Once you have saved up at least three months of your salary, consider opening an investment account with an accredited broker.

If you don’t know what investment options to follow first, speak to a financial advisor at your bank. Ask for all your investment options and ask them to help you choose the one that best suits your lifestyle and age. Make sure that once you start your personal financial journey, you get a last will and testament in place so that, in the event of your death, everyone knows exactly who you leave your money to.


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