There comes a time when every Mac Warrior has to hang up their kilt and head out into the world in search of gainful employment. And while this time can be daunting, it doesn’t have to be. As Jeff told Troy in the TV series Community, “You’re entering the next chapter of your life. Sadly, it’s the final chapter, but it’s also the longest, and if you play it right, the best.”
In the short guide below, Richard Laycock, gainfully employed as a writer and insurance expert at finder.com.au, and a Macquarie alumni with a Bachelor of Media degree, outlines what you need to do to make sure your finances are saved and sorted.
Setting yourself savings goals
Now that you’re going to be earning a steady wage, it’s time to start thinking about what you plan to spend your money on. For me, I’ve found it easy to break this into three separate categories: short, medium and long-term savings goals.
Short-term savings aren’t so much savings but money that you’re setting aside for your everyday expenses like food, going out, bills and rent. It’s important to have a good idea of these outgoings as these will shape how much you’re putting away for both your medium and long-term goals.
Your medium-term savings are for bigger items like a car or a holiday. For me, travel has always dominated my usage of medium-term savings. Long-term savings are for the really big-ticket items like buying a house or moving yourself overseas.
The best way to make sure you stick to these categories is to open separate high-interest savings accounts with your current bank. It’s not a bad idea to find one that rewards you with bonus interest for depositing more than a certain amount of dollars per month, but stops you earning that bonus interest if you make a deduction. This means that if you try to dip into this account, you won’t earn as much interest, which is a great deterrent.
Work out how much of your monthly income should be dedicated to each tier and then set up an automated transfer each month so the money moves from your account without you even needing to see it. It’s also important not to have your medium and long-term savings accounts linked to a card. Unless you are very strict with your spending, you’ll just be asking for trouble.
Choosing a super fund
Super may not seem like an important thing to sort out when you first start work, but getting it right early can have a profound effect later in life. While you may already have a super fund set up from a job you had in high school or while you were at uni, it pays to do some research.
Depending on the industry you’re going into, you might want to look at rolling over your existing funds and joining an industry super fund. These funds are designed to benefit members within that industry and return all profits to their members.
You should also make sure that you’re not paying for services you don’t need right now. This could include insurances that are either unnecessary or in addition to policies you already hold.
Sorting out your health insurance
In most cases, once you’ve found full-time employment you won’t be covered by your parents’ private health insurance anymore. Now, if you still want private health cover, this leaves you with two choices: see if your new job offers corporate health insurance or get cover on your own.
Getting cover through work
If the thought of doing all that work and reviewing policies, cover levels, benefits and everything else seems like ‘a pain in the proverbial’, check with your employer to see if they offer a corporate health plan.
Corporate health insurance is growing in Australia because employers know that a healthy employee is more productive than an unhealthy one. These policies are arranged through your employer, who negotiates the benefits for all their employees and can usually arrange a decent deal because they’re bulk buying cover. There are three types of corporate policies:
- Fully funded. This is where your boss or company fully pays for your health cover. So basically, your employer is taking the place of your parents.
- Partially funded. This cover splits the cost between you and your employer, which is more common than fully funded policies.
- Not funded. This is where your employer has negotiated the policy on your behalf but doesn’t pay anything towards your monthly premium.
Getting cover on your own
The benefit of getting cover all on your own means you’re paying for exactly what you want and for nothing you don’t need. While your parents may have needed a high level of hospital cover, you might only need, or want, a low level. Hey, you might not want any hospital cover at all as that’s the most expensive component of private health insurance.
You might opt for an extras-only policy, which can provide you with cover for a range of useful services. Want cover for your visits to the dentist? Do you wear glasses? Enjoy the occasional remedial massage? Well, you might want to grab yourself an extras policy only.