I recently just started working full time right out of college. I’ve worked full-time internships before over the summers, but this is the real deal, probably one of the top 5 largest changes in my life. So far, I really like my job and I can see how you can get lulled into complacency with a job that you like. When your job isn’t terrible you need to find the motivation to save money and pursue financial independence from somewhere else.
In the meantime, I have made it a goal to get the most value out of my employee benefits. This is perhaps the easiest starting point for someone who wants to increase their savings rate or increase their net worth with very little change.
I am very lucky that my employer offers a 401k and I am even luckier that they offer a full employer match up to 5%. It SHOULD be a no-brainer that if your employer is willing to give you free money that you need to take advantage of it, yet many people don’t. When an employer matches your 401k contribution you are essentially getting an immediate 100% return on your money. For example, if your gross salary was $100,000, if you contributed $5,000 to your 401k and your employer matched that 5%, then you would have a balance of $10,000 in your 401k account.
Another advantage of the 401k contribution is that it is taken out pre-tax, meaning the contributions are not taxed. In the example above, you would not be taxed on that $5,000 contribution, saving you about $1,500 on your tax bill. You will also never see this money because it will be taken out of your paycheck before you receive it. This is a way of forcing savings by taking the willpower out of the situation.
This one is pretty much a no-brainer. Healthcare is so expensive in the United States that you really don’t have a choice other than paying for the health and dental insurance through your employer if they offer it.
Another perk that I recently found out about was access to the gym. There is a gym at my job that anyone can use for free. This saves me at least 40 dollars per month that I would be spending on a gym membership elsewhere. It also saves time because I can go to the gym during my lunch break which gives me a boost of energy and also frees up my day before and after work.
In my case, I was automatically enrolled in a life insurance contribution that was only about 9 dollars per paycheck, but I chose to opt out of it. I would rather put that money towards building my assets and cash reserves that could essentially be used as a life insurance policy.