First Job

Total compensation is more than salary: retirement match, health plan cost, disability cover, life cover, paid leave and any tuition or stipend programs.

Open enrolment usually comes once a year. Outside it you can normally only change elections after a qualifying life event, so the first choice tends to stick for twelve months.

Disability insurance matters more than most people expect in their twenties — your ability to earn is your largest asset for decades.

Free or cheap benefits are routinely left unclaimed: group life cover, an employee assistance programme, commuter accounts, and tuition reimbursement.

A match is money your employer adds when you contribute. Capturing the full match is usually the highest-return single move available to a new earner.

Traditional contributions reduce taxable income now and are taxed on withdrawal. Roth 401(k) contributions are taxed now and come out tax free in retirement — often attractive in a low bracket.

Vesting decides when employer money is really yours. Cliff and graded schedules are both common; know yours before you plan a job change.

Contributing is not investing. Inside the plan, pick a fund — a low-cost target-date or broad index option is a common default — or the money may sit in cash.

A Health Savings Account is available only with a qualifying high-deductible health plan. If your plan does not qualify, the account is not an option that year.

It carries an unusual triple tax treatment: contributions reduce taxable income, growth is untaxed, and qualified medical withdrawals are untaxed.

HSA money rolls over year to year and stays yours if you change jobs. A health FSA is a different account with use-it-or-lose-it rules.

A high-deductible plan means you pay more out of pocket before cover starts, so it fits best when you have a reserve to absorb that.

A reserve is not an investment. It exists so a job loss, a car repair or a medical bill does not become credit card debt.

Build it in stages: one month of fixed costs first, then three, then more if your income is commission-based, seasonal or single-earner.

Keep it liquid, insured and slightly inconvenient — a separate high-yield savings account works well.

After you use it, rebuild it before resuming extra investing. That is the account doing its job, not a failure.

Rank every balance by interest rate and risk. High-rate revolving debt usually costs more than any reliable investment return.

Avalanche (highest rate first) costs the least in interest. Snowball (smallest balance first) wins more often on follow-through. Either works if you finish.

Capture the full retirement match first, then attack high-rate debt — that match is usually a larger immediate return than the interest you are paying.

Before consolidating or refinancing, compare total interest over the full term, not the monthly payment.

Both decisions set fixed costs that last years. Fixed costs are what remove options when income changes.

A car costs more than its payment: insurance, fuel, maintenance, registration and depreciation. Get an insurance quote on the specific vehicle before you buy it.

Longer loan terms lower the payment and raise the total cost, often leaving you owing more than the car is worth for years.

For housing, count the all-in number: rent, utilities, internet, renters insurance and transport to work.

Order matters: capture the match, hold a reserve, clear high-rate debt, then invest steadily in broadly diversified, low-cost funds.

Costs compound against you. A one percentage point difference in annual fees is enormous across a working life.

Automatic monthly investing removes the timing decision, which is the decision most people get wrong.

Expect declines. A long horizon is what lets you ignore them; money needed within a few years should not be exposed to them.