I’ve been writing about making the leap from college to your first professional job. About things that surprised me and others I know. Stuff like … sometimes getting that first job is more about paying the bills than anything else. And if you find yourself in a position you don’t really like, you might be right where God wants you.
This third idea probably won’t surprise anyone, but I think it’s worth talking about: You probably shouldn’t expect to get rich in your first job either.
To be fair, I don’t think most new grads would say that getting rich quickly is their goal. Most would readily admit that’s unrealistic when expressed in those terms.
What gets too many of us in trouble, though, is lifestyle expectations we haven’t examined, especially when those are combined with a lack of understanding of what that $35K or $45K or even $60K salary can actually buy.
(Some of you are looking at those numbers thinking, “if only…,” but they are realistic for grads who wind up in young professional positions in their fields of study. Check out this article for more on that. In this economy, I know there are many who end up working retail or food service instead of in their field — or who can’t find a job at all — and that’s an entirely different post.)
Whether you worked your way through college, relied on loans, or had parents who provided your education, you are probably accustomed to some lifestyle blessings simply because “home” has always meant your parents’ home, and they have had many more years than you to build wealth.
On one end of the spectrum, that may mean you’re accustomed to extravagant vacations, a nice new car and an unlimited clothing budget. On the other end, it may just mean you eat a restaurant meal once or twice per week; have unlimited talk, text and data on your phone; and don’t worry about auto insurance payments.
Either way, I encourage you to deliberately take all those expectations off the table and start totally from scratch, basing your assumptions and your plans on what’s actually going into your bank account each month, rather than the lifestyle you’d like to lead.
For example, after you sign that contract, and you have a number that represents your monthly salary, take about 15 percent off the top for taxes. Yeah. Ouch.
Next, if you’re in a job that offers health or other benefits, find out how much the premiums will run on those items. That’s another chunk of money that won’t make it into your bank account in the first place.
Then you get to start making decisions that define you (which can be a very empowering thing, if you choose to make it so).
- What will you give to your church or to charity?
- Will you save? If so, how much?
- Where will you live? Will you split rent and utilities with roommates?
- What about debt? How much are your minimum monthly payments?
- Is it a priority for you to pay down debt faster than you would just making minimum payments?
- Is your first job far from home? If so, who will foot the bill for holidays spent with family?
- Do you want to travel recreationally? If so, how will you pay for that?
- How much do you spend on groceries per month? On eating out? (If you don’t know, track every penny for two or three months, then make a realistic budget based on those actual numbers.)
- What kind of professional wardrobe do you need? How much per month will it cost to build that over your first year or so of work?
- What will you drive? How will you insure it?
I haven’t mentioned anything like buying music, going to the movies or splurging on a big screen TV (or even a pedicure for that matter). You may discover that, after answering the rest of these questions, there is literally no money left over at the end of the month.
What will you do then?
Will you choose to live as though you’re rich when you’re not? Or will you choose to live within your means, whatever it takes?
The answers to those questions will set a course for your life that is surprisingly hard to change, once the initial decisions have been made. It may be excruciating to give up some things you’ve come to expect as part of your lifestyle, but the best way to actually be rich someday is to not pretend you’re rich now when you’re not.
If you’re in this stage of life, what have been the biggest surprises where salary and expenses are concerned? How have you handled those surprises?