Financial Advice for Young Australians Starting Their Careers

Starting your first job is an exciting milestone, but it comes with responsibilities. Understanding banking, tax, superannuation, and long-term financial planning can make a massive difference in your future security.

Many young Australians enter the workforce without proper guidance on managing their money. This article will help you make informed decisions from day one. Whether working part-time, full-time, or casually, these financial tips will set you up for success.

Let’s Get Straight to the Point

If you’re short on time, here’s a quick summary of what you need to know:

• Set up two bank accounts – one for savings (high-interest) and one for everyday transactions.
• Get a Tax File Number (TFN) – required for employment and claim the tax-free threshold on one job.
• Understand superannuation – choose a good fund, check fees, and consider voluntary contributions.
• Consider government benefits – the government may add up to $500 to your super if you contribute $1,000.
• Start investing early – due to compounding interest, even $6 a day can grow into $1 million by retirement.

Setting Up Your First Bank Accounts

The first step in managing your money is choosing the right bank accounts. This ensures your income is safe and working for you.

Choosing the Right Savings Account

A high-interest savings account allows you to grow your money while you’re not using it. In 2025, some of the best savings accounts for young Australians include:

• Bank of Queensland Future Saver – competitive interest rates for customers under 35.
• Great Southern Bank Youth eSaver – designed for people under 24.
• ING Savings Maximiser – a strong option, but check if they pass on rate increases.

Tip: Look for an account with no monthly fees and a competitive interest rate.

Everyday Transaction Account

You’ll also need a second account for spending. The best everyday accounts have:

• No monthly fees
• Free ATM withdrawals
• Easy mobile banking access

Keeping your savings separate from your spending account helps you resist the temptation of using all your income.

Getting Your Tax File Number (TFN)

A Tax File Number (TFN) is essential if you plan to work in Australia. Your employer will ask for it when you start your job.

How to Apply for a TFN

You can apply for a TFN for free through the Australian Taxation Office (ATO). It’s a one-time process, and your TFN stays with you for life.

Claiming the Tax-Free Threshold

If your total annual income is below $18,200, you don’t need to pay tax. When filling out your tax forms, you must claim the tax-free threshold—but only on one job at a time.

Warning: If you claim the tax-free threshold on multiple jobs, you may end up with a tax bill at the end of the year.

Understanding Superannuation (Super)

Superannuation is your retirement savings fund, and your employer is legally required to contribute to it.

How Super Works

• Employers must contribute 11.5% of your salary to your super fund.
• You can choose your own super fund or use your employer’s default fund.
• If you work more than 30 hours a week and are over 18, you must have a super account.

Choosing a Good Super Fund

Super funds charge fees, and some perform better than others. When choosing a fund, check:

• Long-term performance – Look for funds with strong returns over at least 10 years.
• Low fees – Avoid funds with high admin or insurance fees.
• Investment options – Some funds allow you to choose low-risk or high-growth investments.

Tip: Compare super funds at moneysmart.gov.au to find the best option.

Should You Get Insurance in Your Super?

By default, new super accounts for people under 25 do not include insurance. You can request it, but unless you have dependents or debts, it may not be necessary right now.

Government Super Co-Contribution Bonus

The government offers free money to boost your super if you contribute your own savings.

How It Works

• If you earn less than $58,445 per year, you can contribute $1,000 after-tax to your super.
• The government will add up to $500 to your account.
• This means a $1,000 investment turns into $1,500 instantly.

Why This Is Worth It

• It’s free money from the government.
• Your super balance grows faster.
• It can help compensate for future career breaks (e.g., parental leave).

The Power of Compounding Interest

Understanding how compound interest works can change your financial future.

The Snowball Effect

Albert Einstein called compound interest the "eighth wonder of the world" because it turns small, consistent investments into substantial wealth.

Example:

If you invest $6 per day from age 18, earning 8% per year, by retirement you will have:

• Over $1 million
• $900,000 from investment growth
• Only $100,000 from your own savings

The key is time—starting early means smaller contributions with bigger returns.

Tip: Even investing $5–$10 a week can grow significantly over decades.

Smart Spending and Budgeting Tips

Learning to manage your income wisely is just as important as earning it.

Creating a Simple Budget

The 50/30/20 rule is a straightforward budgeting method that works for most income levels. It helps you allocate your earnings into three essential categories:

• 50% for Essentials – Rent, groceries, transport, utilities, and other must-have expenses.
• 30% for Lifestyle – Eating out, entertainment, shopping, and travel.
• 20% for Savings & Investments – High-interest savings, superannuation, and investing.

How to Make Budgeting Easy

• Track your spending – Small purchases add up quickly.
• Use budgeting apps – Free apps like Pocketbook, Frollo, and MoneyBrilliant help track expenses automatically.
• Review monthly expenses – Check subscriptions and cut unnecessary costs.

Tip: If saving 20% feels impossible, start small and increase over time. Even saving $50 a month builds good habits.

Avoiding Debt Traps

Debt can quickly spiral out of control if you're not careful. Many young Australians get caught in expensive credit card interest or buy-now-pay-later (BNPL) schemes without realising the long-term impact.

Common Debt Pitfalls

• Credit Cards – If not paid in full each month, they charge 20%+ interest, leading to unnecessary debt.
• Buy-Now-Pay-Later (BNPL) Services – Easy to overspend, and missed payments lead to late fees.
• Personal Loans – High interest and long repayment terms make borrowing costly.

How to Stay Out of Debt

• Use a debit card instead of a credit card to avoid interest charges.
• Limit BNPL use to necessary purchases and pay on time.
• Save before spending—avoid impulse purchases by waiting 24 hours before buying.

Tip: If you already have debt, prioritise paying off high-interest balances first, then focus on savings.

Investing for Long-Term Wealth

Best Ways to Invest in Australia

Exchange Traded Funds (ETFs) – Low-Cost and Diversified

ETFs are an easy way to invest in a broad range of companies with low fees. They track stock market indexes, like the ASX 200, offering diversification and steady growth.

• Affordable – Start with as little as $500
• Low fees – Cheaper than managed funds
• Diversified – Reduces risk by spreading investments

Popular ETF providers in Australia: Vanguard, BetaShares, iShares.

High-Interest Savings Accounts – Safe but Lower Returns

For short-term savings, a high-interest account is the safest option.

• Risk-free – No chance of losing money
• Easy access – Great for emergency funds
• Interest rates (2025): Around 4%–5% p.a.

Top picks: Bank of Queensland Future Saver, Great Southern Bank Youth eSaver, ING Savings Maximiser.

Superannuation – Tax-Effective Long-Term Savings

Super is one of the best long-term investments, with compulsory employer contributions and tax benefits.

• 11.5% employer contributions (2025)
• Low tax (15%) compared to regular investments
• Government bonus: Earn under $58,445? Contribute $1,000 and get $500 free.

Tip: Consider micro-investing apps like Raiz or Spaceship to start investing with as little as $5.

Conclusion

Starting your financial journey the right way can set you up for life. By making smart choices with banking, tax, super, and investing early, you’ll have more financial freedom and security in the future.

• Open high-interest savings and transaction accounts.
• Get a TFN and claim the tax-free threshold properly.
• Choose a low-fee, high-performance super fund.
• Consider voluntary super contributions to get free government money.Start investing early – small amounts add up over time.