Congratulations on your first employment contract! The lean training and student years are finally over. But: Now some things have to be sorted out that were not on the to-do list so far. We show what is important in terms of finance and insurance – and what is not.
These three basic rules you should take to heart as a newcomer to the profession:
- One step at a time, don’t rush things
- Compare all offers well
- Early hedging of important risks
1. When is it worth changing accounts?
For pupils, students or trainees the current account is often free of charge. This can change with the start of your career. Check the account management fees of your current bank and compare them with other offers. Under certain circumstances, a change may be worthwhile.
Important: Check whether there are ATMs near your home or workplace! The cheapest bank is of little use if the next free ATM is far away.
2. What are the changes in health insurance?
Pupils and students are usually covered by family insurance. This changes with the first employment contract. Most job starters now switch to the statutory health insurance. You and your employer each pay half of the monthly contribution. The health insurance company also registers you for compulsory nursing care insurance.
3. Which insurances do first-time employees need?
Liability insurance – Immediately
One of the most important insurances is the liability insurance. You need this immediately.
Your friend’s cell phone fell in the water? Or you scratched someone else’s car with your bike? Without a private liability insurance such accidents can be expensive. So as soon as your parents’ insurance no longer covers you, you should definitely take out private liability insurance. This should cover personal injury and property damage with at least three million GBP.
Occupational disability insurance – as soon as possible
“Disability”? I haven’t even started!”
True, but the statistics show one in four Britains will leave the workforce before retirement. The frequent causes are musculoskeletal disorders, circulatory problems or mental illness. In these cases, even those starting out in their careers should cover their living expenses with an occupational disability insurance.
Private pension provision – important, but can wait
Those who take out insurance at an early age maintain their standard of living in old age. Therefore: Don’t put money aside for retirement at the age of 40. And don’t worry: you don’t have to take out a private pension insurance policy with your first job. Instead, take the time to take a close look at the possibilities and offers and find the best possible strategy.
Other important insurance policies for career starters
Private accident insurance
Not much sense. The accident insurance only pays in very specific cases, which are usually already covered by the occupational disability insurance. This also pays in the event of permanent damage after an illness. This is not covered by accident insurance.
Home contents insurance
As a beginner you probably do not yet have too expensive home furnishings. Only when your apartment is equipped with expensive fixtures and fittings should you think about hedging.
4. Why is a money reserve important?
Even if it’s hard to do, you should set aside a fixed amount of your income each month, preferably in a call account. Financial experts recommend saving three to five monthly salaries as a safety buffer. In this way, even young professionals are well protected against unexpected costs.
5. Choosing the right financial strategy
There is often a lot to finance before the first monthly salaries arrive. The first rent, deposit, renovation of the old apartment, work clothes or your own car for the way to work. An installment loan can help here. Because this way, young professionals can make the start of their professional life easier and overcome the first financial hurdles. For example, an Credit company is not earmarked. You determine the amount and term of the loan and can then use it for the things you urgently need. Credit company caters to your individual needs. Especially at the beginning of your professional life, you should not overdo it, but make sure that the loan can be paid back safely. An advisory and non-binding discussion can be helpful here.
The Credit company installment loan
- Credit amount from 1,000 GBP to 75,000 GBP
- Duration 12 to 84 months
- Short term = higher rates
- High maturity = lower rates
- Can be concluded completely online
Tip: If you apply for the loan together with a partner, the interest burden may decrease.
Everything important taken care of? Wonderful.
Then you can now start your professional life well secured and without financial worries.