My First 401(k): What I Wish I’d Known When I Started My First Job

Rewinding Back to the Beginning

Let’s rewind all the way back to my college graduation. I had just moved home, heartbroken from a recent breakup and unsure of my next steps. With no job lined up, I felt defeated.

This was before everything was online, so I mailed out printed résumés to local companies. Thankfully, I landed a job fairly quickly. I had a start date, a title, and a (very small) salary. It wasn’t glamorous, but it was a start – and I could finally plan for rent, bills, and monthly expenses.

That’s when I ran into my first big “real adult” moment: enrolling in health insurance and trying to understand a mysterious thing called a 401(k).

What Is a 401(k), Anyway?

If you’re new to the workforce, a 401(k) is a retirement savings plan sponsored by your employer. You choose a percentage of your pre-tax income to contribute, and that amount is automatically deducted from your paycheck and invested for your future.

The best part? You don’t have to manually move the money – it never even touches your checking account. That built-in automation can be a game changer for building healthy financial habits early on.

Feeling Confused? You’re Not Alone.

Back then, I had no idea what a 401(k) was or why it mattered. Financial terms felt intimidating and I didn’t know where to start.

If that’s where you are today, there are some beginner-friendly resources that can help make it all less overwhelming:

Broke Millennial Takes on Investing by Erin Lowry – approachable, relatable, and designed for beginners.
The Automatic Millionaire by David Bach – focusses on building wealth through small, automated steps.
Clever Girl Finance by Bola Sokunbi – geared toward women, covering budgeting and investing basics.

I haven’t personally read these yet, but they come highly recommended by people who started where I was. As an Amazon Associate, I earn from qualifying purchases.

Don’t Miss Out on Free Money

Many employers offer a 401(k) match – basically free money for your future.

My first job matched 100% of contributions up to 6% of my salary. If I contributed 3%, they contributed 3% too. When I eventually reached 6%, I was saving 12% of my income each month without even noticing.

What It Means to Be “Vested”

Some companies require you to stay for a certain period before you fully own the employer match. For example, after five years, you may be entitled to 100% of their contributions.

Even if you leave earlier, your own contributions are always yours and you can typically roll them into another retirement account if needed.

Starting Small Is Still Starting

When I started, I contributed just 1% of my paycheck. It felt like a lot, but the hit to my take-home pay was minimal. Over time, whenever I got a raise, I increased my contribution slightly.

If I got a 3% raise, I’d bump my 401(k) up by 1%. That way, I still saw more money in my paycheck while steadily growing my savings.

Those little steps added up. By the time I left that job, I had reached the full match and was fully vested – proof that even small, consistent efforts matter.

Final Thoughts

Start small.
Stay consistent.
Celebrate your progress.

You don’t have to have everything figured out right away. Just take that first step.

Want to Learn More?

If you’re ready to feel more confident about saving for your future, here are those resources again:

Disclosure: This post contains affiliate links. I may earn a small commission if you purchase through them at no extra cost to you. Thank you for supporting my blog!

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