Financial Tips When Starting Your Career
Tips to point your ‘Financial Compass’ in the right direction.
(Initially published on Medium.com, 01-Aug-2024, photo image credit: Photo by Vasily Koloda on Unsplash)
I was the first person in my family to attend university.
In 1987, I started studying mechanical engineering. My parents didn’t have money to help pay for school, so I paid for my education with student loans and multiple jobs. Some jobs were during the school semester and one was working through a co-op program my university offered where you alternated school and work semesters without taking summer semester breaks to gain work experience before graduation.
Most students do three semester-long co-ops, but I did five. I needed the money to pay for school. I enjoyed the work and the experience. I worked for an oilfield equipment company. While working there, I met an engineer who became a good friend and mentor. His name is Paul and he’s about eight years older than me.
I finished in December 1992 with a diploma, a job offer from my co-op employer, and student loans that I would spend the next 10 years paying off.
Having my first full-time job and starting my career, I was full of enthusiasm and gratitude to have a job and to have finished school!
The semester before graduation, I was chatting with Paul and said something like “Man, I spent five-plus years struggling with school, work, and finances to get my degree, I just want to splurge and enjoy myself for a moment when I graduate. I think I might buy a new Corvette!” (Never mind that this idea was likely not financially feasible!)
I joke that Paul ‘verbally slapped me upside the head!’ with his next words of advice that went something like this: (paraphrased as it’s been 32 years, but the points are well remembered)
“Don’t buy a Corvette! That’s the stupidest thing you could do!”
…said while wagging his finger at me. “Keep your old truck and work on paying off your loans.”
“And another thing…!”
(There were a few of these! And I think a bit more finger-wagging!)
“Get established in your job. Don’t take a year off to go backpacking through Europe staying in hostels! Wait five years, save some money, and go to Europe when you can stay in 5-star hotels; you’ll enjoy it a lot more.”
“Don’t buy a bunch of new furniture to fill an apartment. You’ll meet a girl in a couple of years and she’ll hate it all. You’ll have to get rid of it and start over anyway, so don’t waste the money!”
“You’re going from making nothing to $X per year. As soon as you’re eligible, max out your 401k contributions” (15% at the time). “You’ve never had $X, so you’ll never miss the $0.15X you’re putting away because you’ve never had it before. Make your budget based on $0.85X. You have to pay yourself first and save for retirement; no one else will.”
Paul was already established in his career and financial investments, so he had perspective and experience to share. This advice seems so obvious to me now.
As a young adult, ignorant of so many life lessons, enthusiastic but without wisdom, educated but inexperienced, it’s easy to start doing what you think you should be doing — perhaps trying to keep up with the Jones. I can tell you — I met the Jones and they’re very nice people but you should take your own road in life. Don’t worry about other people. It’s easy to start digging a financial hole when you don’t even realize the shovel is in your hand.
I took Paul’s advice and it served me well.
Over the years, I shared it with many new hires at places I worked and I hope it gave them a nudge in the right direction as it did to me.
As a quick summary of how things turned out since my graduation:
- Two years later, I did travel to France for a week-long vacation. I stayed at a one-star hotel, not five-star, but it was a fantastic trip!
- A year after the France trip, I did meet a girl and she was ‘the one’. We’ve been married now for over 26 years.
- Seven years after meeting a girl, I did buy a sports car — a used Porsche Boxster. That’s a story for another article, but quick advice: don’t do it!
- Starting straight away to save in my 401k was great advice; it’s done well over the long term.
I hope you can benefit from this advice like I did, or share it with others who can.
And to my friend, Paul: Thank you for your advice and help pointing my ‘financial compass’ in the right direction.
Enjoy Life & Thanks for reading,
-Jeff
