What to do Before Starting Your First Engineering Job and Where to Start

What A Student Should Do Before Starting An Engineering Job and Where to Start

As you near the end of your time at college, you may be wondering how to prepare for a new engineering job. I’ll walk through some of the important considerations to make in the month or two before starting your new career. Hint: It starts with a financial plan.

By Shainur Ahsan

Preparing for Your First Engineering Job

You’ve worked hard in college to finish your degree and land a nice engineering job and may be wondering what to do next to best prepare for your new workplace. In college, you may have had a great amount of freedom while not having to worry about responsibilities other than classes. However, you now have to figure out how you’ll fit in in your new workplace where the environment is a stark contrast from the on-campus atmosphere.

The transition does not have to be overwhelming or difficult as long as you can take some time to plan. It may be difficult as you have to finish classes and get ready for graduation, but it could make the start of your career so much better.

I’ll be running through the main points to consider in a series of posts. Some of the considerations are general to all students starting their careers. Others will be more focused towards those starting a new engineering job. Here are some of the important points to consider in the months before starting your career.

I’ll start out by discussing how to start setting up a financial plan for the transition to a professional. Be sure to check out the related links at the bottom and check back for future posts.

Planning Out a Financial Future

Depending on your situation, you may already have had to manage your own money in college. You may have even had jobs or internships with income. Starting a career means you will need to make sure your finances are in order and whatever financial plan you had in college can adapt to your new situation.

Despite your past experience with money, you have a chance to take a fresh approach out of college. That approach starts with a budget that considers the money you’ll be making and the expenses you are now responsible for.

Start with a Budget

Photo by Pixabay from Pexels

Setting a budget starts with knowing how much you’ll be making in your new job. Though you may have agreed to a salary offer at the end of your job interview, you have to understand the portion of that starting salary you actually get to keep as some of it will be going to taxes and health care among other things. Your take home pay is usually quite a bit less than your monthly listed salary.

Figuring Out Take Home Pay and Expense

You can get an idea of how much you’ll pay for taxes by visiting the IRS website and looking up Federal Tax Brackets. Also, you can visit your state’s and/or city’s website to determine what the local tax brackets are (in addition to federal tax).

Most people coming out of college have relatively simple finances and income comes only from a job. Fortunately, this makes calculating taxes relatively easy for most new hires. Calculating taxes are slightly more complicated than calculating a percentage of your salary, but you should be able to find an online calculator to help you.

Now that you know roughly how much money will go to taxes, its time to figure out how much you’ll be paying for other expenses such as healthcare, life insurance, and short and long term disability insurance. Your employer’s human resource department should provide information about the benefits package to help determine the monthly costs for these items. If not, be sure to reach out to them as these costs can vary greatly by company.

Next, you’ll need to get an idea of how much you’ll spend each month. If you’ve been tracking your spending in college, great! You’ll have an easier time understanding your expenses after starting work. If not, you can start to track your budget in your last few months of college.

Budgeting Apps/Tools

Understanding and tracking expenses are easier than ever. There are third-party apps such as Mint (by Intuit) and You Need a Budget (YNAB) among many others that link to your accounts and automatically categorize your transactions. You can also manually enter in cash transactions.

For those that want total control, there is always the option of creating a manual budget spreadsheet in Excel.

You’ll need to have an idea of the main areas where you’ll be spending money. I’m including a list below of some common categories that most people consider. Some of the costs of the categories can depend greatly on where you’ll be living so be sure to take that into account.

Housing
Transportation
Utilities
Phone
Cable, Internet and Streaming
Groceries
Restaurants/Takeout
Entertainment
Travel
Shopping

You may not have your housing set at this point, but having a budget for other expense will help you understand how much you’ll have to spend towards an apartment.

In addition to these immediate expenses, you should plan on saving a portion of your salary towards savings and retirement. Starting to save early for retirement is understated. As an engineer, you should be able to do the math to understand the effect of compound interest over a period of 40 years. If you don’t believe me, look up the many articles, podcasts, and videos that you’ll find online. You definitely want your income from your new engineering job working as hard for you as possible.

Open a Checking and Savings Account

Photo by rawpixel.com from Pexels

Now that you have a better idea of how much money will be coming in and out of your account, it’s time to think about opening both a checking and a savings account.

It’s highly likely you already had an account either in your own name or held jointly with your parents. You can most likely continue using this account when you start your job.

You’ll want to have a checking account set up to handle your monthly expenses. The easiest way to manage multiple bills each month is to put them on auto-pay and have them all pulling money from the same account. Be sure that you also use this account for your direct deposit for your paycheck to make sure money is always coming in.

It’s also important to establish a savings account separate from your checking account to save up for an emergency fund and for larger future purchases. Your employer may have payroll set up where a percentage or fixed amount can be deposited in a secondary account.

It’s important to try to not touch money that you intended for savings or an emergency, and the best way to do that is to have it in a second account seperate from your regular expenses.

When choosing a savings account, shop around all options. Many online banks offer higher interest rates that you would get from the larger banks. This can help you reach some of your medium-term financial goals faster.

Save Up for that First Month of Expense

Photo by rawpixel.com from Pexels

With some bank accounts established, you can start setting money aside before you start your job. You’ll need some savings when you start work as you should expect to wait at least two weeks before you receive your first paycheck. Having a pool of money ready will help pay for expenses in the first few weeks of your new lifestyle.

Important things to consider ahead of time are deposits for housing and utilities and the first month’s rent. Many rental or utility companies may want this especially if you do not have a credit history.

It may be hard to come up with this money ahead of time before starting work. Consider setting aside money made from summer jobs/internships and leftover scholarship/loan money or any signing bonus you may have received. In the worst case, you can ask your parents to temporarily loan you money and pay them back after getting the first few paychecks.

Moving into a new apartment will almost always mean new furnishings and eating out at least for a short period. Keep these items to basic purchases and try to plan out what you really need in your first few weeks.

You’ll need to pay for some items set aside in your budget upfront and you’ll need to consider any moving costs you may be responsible for.

Not planning appropriately for the first few weeks of expenses, may leave you short on funds before you’ve even received your first paycheck.

Conclusion

In summary, you can make your transition to a professional easier by taking a number of steps in advance in the months before you start your new job. You can and should start some of these habits while still in college.

In regards to a starting financial plan consider these three points in the months leading up to your first day at work:

A financial plan is a framework for your success in keeping your new lifestyle organized. You can work on your financial plan further after starting your new job. I’ll discuss what further adjustments to make in a future article and stay tuned for future posts on other considerations in the months before starting a new engineering job. Be sure to check out the links below for some deeper information on the key points made in this article.

Read the Next Post in this Series:

Helpful Links

Financial Apps and Tools

Cover Photo by Cadeau Maestro from Pexels

The content in this post is provided for informational purposes only and does not constitute professional financial advice. Individuals reading this post should consider their personal situation and relevant risks and liabilities before taking any action.