Your first job probably won’t make or break your career, but how you handle your first paychecks could affect your financial habits for years to come. A lot of people make simple money mistakes when they get their first job that can really hinder them later on. We cut these people a little slack because they are just learning the ropes, but there comes a time in everyone’s life when they need to take their finances seriously. What better time than your first job?

Avoid these common mistakes and you will be on your way to implementing healthy financial habits for years to come.

Financial Mistake #1: Not joining the company retirement plan.

Regardless of whether you are 55 or 25, retirement should be on your mind. The earlier you start building finances for retirement, the better your chances of enjoying retired life in comfort. Many people, especially those that are young and are working at their first jobs, don’t even think about joining the company retirement plan. “I’m too young,” they say. Or, “I don’t want portions of my pay going to that. I have gadgets to buy."

Wake up, people! In many countries, your employer is required by law to contribute a percentage of your salary to a pension or superannuation fund, provided that you meet the eligibility criteria. There is no reason to pass up an opportunity to get money that will help support you beyond working age. There is also no reason not to take advantage of the time you have to build your nest egg. Being 45 years old and realizing that you didn’t even think about saving for retirement is one way to bring on a midlife crisis!

Financial Mistake #2: Not saving money.

The ability to save money is one of the most crucial aspects of having healthy finances. Not only is it nice to have the money saved up to buy the important things in life like a house or a car, it also gives you peace of mind and increased confidence to know that you have cultivated healthy financial habits.

Financial Mistake #3: Not setting up an emergency fund.

Aside from your regular savings, which you might invest long-term or dip into for holidays, an emergency fund exists purely for swift access to your savings when they are needed to cover an unexpected and unavoidable expense. This is a common item in a well-rounded personal finance plan. If you set up an emergency fund and make regular contributions, you'll know there is money available in case you ever find yourself out of work, ill, injured, or with another unexpected problem

Financial Mistake #4: Mounting on the debt.

Perhaps the biggest financial mistake first time professionals make is building up excessive debt. Quite frankly, this has become an epidemic, but it can easily be avoided. Don’t fall into thinking that because you are getting paid, you can pile on some debt and pay it off later on. That’s a warning sign of unhealthy financial habits. If you are already in debt, do your best to pay it off as soon as possible. That means paying more than just the monthly minimum repayment on your credit card, for example.

Not everyone has to learn about finances the hard way. Cultivate healthy financial habits early on and avoid money worries later.

Image credited to TaxBrackets.org

This is a guest blog post by Amanda Abella, a personal finance blogger who thinks that saving for retirement is never a bad idea. She has been self-employed for several years, picking up a lot of useful advice to share with other young professionals and entrepreneurs!