How to manage your finances when starting your career
April 2021 – 15 min read
Starting an entry-level job in your chosen career is a great time to start focusing on your finances.
With your salaried income, you can make a plan that will help you cover expenses, pay down student loans, and save for the future.
By understanding your income and expenses, you can plan to achieve your short-, medium- and long-term financial goals.
Prepare for the unexpected
It’s important once you start earning a steady stream of income to set some of this aside for unexpected expenses. You may have heard of the terms ‘rainy day fund’ or an ‘emergency fund’ to refer generally to savings, but ideally, these 2 funds are separate and contain money to help with different things.
This is money used to cover large emergencies that could impact your income, such as losing your job or becoming ill. It’s recommended to have between 3 to 6 months’ worth of savings to help cover your living expenses for this length of time.
Rainy day fund
This is normally smaller than your emergency fund and contains $500 - $1,000 that can be used for one-time purchases or smaller unexpected costs, like car or home repairs.
Aside from your savings, another thing to consider is your health. If you’re starting an entry-level position with a company, you may be enrolled in a benefits plan to cover health and dental treatments. If you’re starting your career as a freelancer or contractorOpens in a new window, you may not have any benefits at all. If you’re worried about the cost of healthcare and how you’d pay for medical bills, buying personal insuranceOpens in a new window can help bridge the gap between what’s covered by provincial or territorial health care and what you’ll need to pay for out-of-pocket.
If you’ve got questions about planning over the longer term, an advisor may be able to help.
You can ask them questions about the right investing and savings options for your specific situation as you get started in your career.
You can also learn more about TFSAs, RRSPs, and getting started with investing.
The information provided is accurate to the best of our knowledge as of the date of publication. This information is general in nature, and is intended for educational purposes only.