Planning & Research: Getting Started - T. Rowe Price

Congratulations! You have likely finished your formal education and have landed that first job. This is the best time to start building a solid financial foundation and establishing sound money management skills that include regular investing practices.

Starting Out Tips

Here are some smart tips that you can begin practicing now.

Make a list of where your money is spent. This helps you become conscious of where and how you spend your money and where you can possibly cut back.

Many of us start our careers saddled with large debts from student loans, high-interest credit cards, and car loans. Pay off these debts as quickly as possible. Doing so will save you countless dollars in interest and allow you to begin saving sooner.

Because the unexpected happens, try to invest three to six months’ worth of your take-home pay into an easily accessible account, such as a money market fund.


Consider investing the money you’re setting aside until the time of your purchase. Putting a bigger down payment on a car or home will give you smaller monthly payments and keep money in your pocket.

You may have 40 years of working before reaching retirement age. During that time, your investments have the potential to grow through decades of compound earnings. This means your assets have the ability to generate earnings, which are then reinvested in order to generate their own earnings. Try to contribute 15% of your gross income to retirement accounts (this target includes any employer match). If you can’t start at that level, contribute at least enough to receive the amount your employer matches, and then increase your contribution rate by 2% each time you receive a salary increase.

All investments involve risk, including possible loss of principal.

If your employer doesn’t sponsor a retirement plan, consider opening a Roth IRA or a Traditional IRA. Both accounts can provide tax-deferred growth potential.

See how quickly a monthly investment of $50, $100, or $200 in a tax-deferred account can grow.

Advantages of Tax-Deferred Compounding

Assumes a $0 opening balance and monthly contributions compounded annually at a hypothetical 7% rate of return net of fees. This chart is for illustrative purposes only and does not represent the performance of any specific security.

Use our Automatic Asset Builder calculator to discover the power of compounding. Simply fill in a monthly amount and see how much your money could grow over 20-, 30-, and 40-year periods.