It takes time (and money) to get all the pieces in place.
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How exciting! Your first full-time job! Whether you just got out of high school, college, or grad school, your first job is a big milestone. Youâll soon be earning your first paycheck and your money worries are over!
Or are they? Do you have enough funds to get started on your new adult journey, or do you need a temporary loan to tide you over? What expenses need to be paid up front, even before your first check is deposited?
Key Points
- Moving to your own place requires several up-front costs.
- Transportation is going to cost you, whether you buy a car or get to work another way.
- You might have a delay in insurance and your first paycheck, plus other work-related expenses.
If you plan on renting a home, such as an apartment or house, you know youâll need to pay rent each month. But there are also some costs to pay when you sign the lease and before you move in:
- Rent-related expenses. You will most likely be asked to pay a security deposit or perhaps your first and/or last monthâs rent ahead of time. Your landlord wants to make sure you donât damage their property and that youâre going to follow through and pay your rent. You might have to pay additional fees before you move in, such as pet fees if youâre bringing Fluffy or Fido in tow, or HOA (homeowners association) fees if your building has a doorman, pool, or other amenities. If you have a car, you might need to pay for parking. And if you move in before your job begins in order to get settled, your first monthâs rent will be due before your first paycheck is deposited.
- Utility-related expenses. If you donât have a solid credit history, you may be asked to pay a couple hundred dollars up front for each utility (electric, gas, water). If you are getting cable, you might need to prepurchase a cable box, and when you get Internet, you might need a router and/or other equipment.
- Renterâs insurance. Insurance helps pay to replace your belongings if theyâre stolen or damaged in a fire or other mishap. You will need to pay for an entire yearâs insurance before you move in. Many landlords require proof of renterâs insurance when you sign your lease.
- Furniture and necessities. In order to enjoy your new home, youâll need to furnish it. To save money, you may look to neighbors, friends, and relatives who have extra furniture or kitchen items (such as pots and pans, small appliances, and dishware) that you can get for free or at a low price. Youâll need at least some decor to make your place homey, such as throw pillows and a bedspread. Donât forget cleaning supplies, a shower curtain, and basics such as toilet paper.
Moving costs
It costs money to move. Even the cheapest move involves driving your belongings from your previous residence to your new placeâthere goes a full tank of gas! You might need to buy some pizza for friends who help you. Depending on how far youâre going, you might need to rent a vehicle big enough for all your stuff. You might need a hotel along the way, or at your new place before your bed is delivered. You wonât be able to cook until you unpack, so youâll need money for takeout.
Individually, these sound like small expenses. But they add up.
Some employers reimburse your moving expenses up to a certain dollar amount. But youâll need to pay for those costs up front, save your receipts, and submit for reimbursement later. And your new employer will need to take taxes out of that money, so youâll get back less than you spent.
Every new freedom comes with a new responsibility.
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Youâll need a way to get to your new job. Even if your work is fully remote, youâll need to get groceries and will want to go places, so you need some type of transportation.
- Car expenses. If you purchase your own car, you will need to register it with your state right away. Car insurance is required by law. Some states require that you pay property taxes on a vehicle, which can run into the hundreds of dollars depending on the vehicleâs age. And of course, youâll need to fill up the tank and save some extra money for maintenance such as oil changes or new tires.
- Other forms of transportation. If you decide to ride the train or bus, or join a bike-sharing program, youâll typically need to purchase a pass up front. If youâre close enough to everything to walk, you might need to purchase good walking shoes or outerwear appropriate for your climate.
Note: If you move to a new state, you will need to pay for a driverâs license or state ID within a certain number of days.
Work-related considerations
- Paycheck timing. You wonât receive your first paycheck right away. Youâll have to work several days before you are paidâsometimes as long as a month. And if you didnât start on the first day of the pay period, your first check will cover only those days you did work.
- Medical insurance. You might not be covered by health insurance right away. Health insurance is required by law, so youâll need to either pay to extend your previous policy or purchase a short-term policy.
- Job-related expenses. Your job might require certifications, proficiency exams, and/or membership in a professional organization before you start. You might need to attend certain conferences or out-of-town training. Even if these job-related expenses are reimbursed later, you might go deeper in the hole before that first paycheck.
- Wardrobe. What does your employer expect you to wear to work? Company uniform or branded gear? Professional business attire? Buy what you need before that first day on the job.
What happened to my paycheck?
It might feel like you can go on a spending spree now that you have your new job, but hold your horses. It could cost thousands of dollars to get your new life up and running.
You may want to bridge the gap by borrowing from the Bank of Mom & Dad, if theyâre able to help you. You could put money on a credit card and use the delayed billing cycle to give you a head start on reimbursed expenses and maybe even get you through to the first paycheck.
But accruing debt is a dangerous game to play. As of 2023, the average interest rate on credit cards is over 20%. Thatâs the kind of rate that can send you backward in a hurry. Once youâve gotten your footing, immediately start saving for your emergency fund. Youâre on your own now, so all unexpected expenses are on your shoulders. You need to be ready in case the car breaks down or you have a medical emergency.
Donât go on that expensive vacation just yet! Work awhile and get your budget in line to see how much money you really have in a few months.
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