Starting your first job - some good advice
Starting your first job is a big step, and there's a lot to keep in mind. Here are some practical tips to remember.
Start Saving Right Away
It's good to start thinking about savings early and set aside a portion of your salary each month. Small amounts add up over time. Consider looking into supplementary pension savings and other savings accounts that can make a big difference, for example when buying your first car or even a home.
Many people divide their salary into three parts: 1) money for daily life (e.g., food, transportation, clothes, entertainment), 2) savings for events (e.g., concerts, theater, travel), and 3) long-term savings (e.g., for a car or home).
Learn to Understand Your Payslip
Your first payslip will show the hours or days you worked during the month and your total earnings. What surprises many people when they receive their first payslip is the deductions made from their salary.
Income tax - Everyone pays tax on their income
Pension fund - 4% mandatory savings are deducted from your salary and paid into a pension fund
You can pay an additional 4% into supplementary pension savings
Vacation pay - Sometimes paid separately into a vacation account
Vacation pay is then paid out on May 11th each year
Union fees - Your union can help check and keep track of your rights
You're Financially Independent at 18 – That Comes with Great Responsibility
At first, turning 18 might not seem like a big change in your life. Waking up at 17 and 18 feels the same, but legally there's a significant difference.
When you turn 18, you're considered both an adult and legally independent. You gain the right to vote and all other rights that adults have (except buying alcohol). For example, you no longer need your guardian's permission to apply for a passport, electronic ID, or to travel on your own.
Your guardians no longer have access to your personal information, which means when they log into their online banking, they can no longer see your bank accounts. You're now responsible for your own finances. Being financially independent also means you can apply for credit cards, overdrafts, and other loans without your guardian's involvement.
It's therefore very important to have a good overview of your finances, understand what debt entails, and avoid overspending. If you end up with too much debt and can't make your loan payments, it's solely your responsibility.
It's a good idea to request a meeting with a financial advisor to discuss this transition and get an overview of your financial situation.
Financial Literacy, What Is It?
Financial literacy involves understanding key financial concepts. Good financial literacy increases your confidence and helps you achieve success and financial independence.
The following points can help:
Try not to spend all your money and aim to have some left over
Set savings goals for each month/paycheck
Saving can be a long-term project. Be patient!
Talk about money with your loved ones and get advice
Hopefully, these tips will serve you well in your new job. In the Arion app, you can explore various salary and savings accounts, and it's also easy to book an appointment with a service advisor on our website. We're always happy to welcome you.
Could You Get 100,000 ISK Deposited into Your Account?
All teenagers born in 2008, 2009, and 2010 who receive their salary into an account with us are automatically entered into Arion's Summer Salary Game and could get 100,000 ISK deposited into their account. Five lucky teenagers will be drawn this summer!
If you still need to provide your employer with your account details, it's easy to do so in the Arion app.
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