Got My First Job. What Should I Be Doing To Get The Most Out Of My Salary?

by Banks

New Job Money

I don't have any debt, make 40k/y. What should I do with the money that comes in? Should invest it? Right now it just sits in my savings.

Also, when do salary reviews come up? A year after you start working? 40k is a bit low for my liking. Though given the job (customer support) it might be ok?

User 83atop asked these great questions in a Reddit Personal Finance thread, and it’s a question that is on the mind of lots of individuals new to the working world. Some fantastic answers came through the pipeline.

·      Max out the 401k up to the employer match. It's amazing how many people don't do this. It's free money. Also, do NOT expect major salary jumps from reviews. Expect and be content with cost of living. These days, unless you're promoted, you don't make more money internally, you make it from job transitions.

·      Do NOT stop looking around at other jobs (indeed.com), keep your resume updated monthly or quarterly, and always keep an eye on what the open jobs for your field are looking for, so you know what skills to keep honed or add, and what the ballpark salaries are (glassdoor.com). It's very common to transition jobs every 3-5 years.

·      You typically start out as a generalist in whatever your given field may be. As you progress you specialize, and the higher salaries come from being a specialist. Learn as much as you can and you'll slowly figure out what you want to specialize in, and you'll find more jobs because you'll have a better idea of where to look.

·      Don't feel like you're missing out by letting your savings "just sit." An emergency fund of 3-4 months expenses (~$5k) is a great thing to have if you ever decide to consider a job transition. You could open a Roth IRA with any funds over that and try to max it out at $5500/year.

·      Investing in your own career skills is very wise, also. Online classes, locally offered workshops, etc. Salary reviews happen, on average, once or twice a year in customer support, and your manager would be impressed to see your trying to improve your skill set, as it could add more value to the company.

·       Look up your benefits. You'd be surprised at how many people don't take full advantage of benefits. 401k match is the big one but often jobs have smaller perks that add up. ESPP, paid leave that doesn't roll over, pre tax transportation, dental that comes with free checkups a year, medical with extra perks, my job offers a charity contribution match up to a certain amount and X% off gym memberships up to a certain amount as part of this wellness thing etc etc.

What other advice would be helpful to answer the questions? Leave your thoughts in the comments below.