You’re about to start your first job, which means you’re soon going to be getting your first pay cheque. This is an incredibly exciting time in your life and you should enjoy it to the max. However, you need to be careful. What you do with your finances when you first start earning an income will make a big impact on your financial future. The bad habits you start now have a way of following you throughout your career.

Don’t budget before tax

If you work on commission, you may make the mistake of budgeting with the money you expect to be in your account. Don’t do this. The biggest mistake you make when putting together a budget is over-estimating how much money you’ll be taking home at the end of the month. Think about the overall amount you’ll be receiving on payday and then calculate your tax.

Getting a credit card too soon

One lesson you need to learn early on in your working life is that you should never spend money you don’t have. And that’s exactly what you’re doing with a credit card: spending future earnings. Later on in life a credit card may become necessary, especially if you want to apply for a bond. But having a credit card in your wallet is a big responsibility and you should wait until you’re ready to handle that responsibility.

Taking out “until payday” loans

So, you’ve run out of cash and you really want to do something fun this weekend and your friend tells you about a short-term loan you can take. You know it seems like a bad idea, but then you think, “Just this once.” Don’t do it. You don’t want to get into a cycle of debt. The interest rates are high and you’ll end up being short on cash again the next month. Payday loans are gateway loans. Don’t forget that.

Making excuses not to save

Yes, you’re just starting out and your pay cheque has far too few digits. But now is the time to get into the habit of saving. As much as the bad habits follow, the good ones do. Even if it’s R50 a month, it’s something. You may not be able to do much with the money you save, but you can increase the amount as your income increases.

At the end of the day, what you do with your finances now matters – whether it seems like it or not. The last thing you want to do is end up in debt counselling when you’ve just started your working life.