Starting your career with a healthy salary is exciting, but many young Australian professionals stumble into preventable financial traps that can delay their long-term goals by years. Here are five common pitfalls to be aware of.
Buy-Now-Pay-Later debt spirals
Services like Afterpay and Zip make spending feel painless, but multiple Buy Now Pay Later (BNPL) commitments can quickly spiral out of control. What starts as “just four easy payments” becomes a juggling act of overlapping debts that eat into every pay. Unlike credit cards, BNPL isn’t always captured in credit reporting, making it easy to lose track of how much you truly owe. Before you know it, you’re living pay to pay despite earning well.
The new car money pit
Few financial decisions destroy wealth faster than buying an expensive new car early in your career. A $50,000 vehicle depreciates $10,000 the moment you drive it off the lot, plus you’re paying interest, insurance, registration, and fuel. That same money invested in your super or an index fund over 10 years could grow to $80,000 or more. Evaluate whether you even need a car, given your work and lifestyle circumstances, and consider a reliable used car instead.
Over-committing to property too soon
The pressure to “get into the market” leads many young professionals to stretch themselves dangerously thin. Borrowing at maximum capacity leaves no buffer for interest rate rises, repairs, or life changes. Being house-poor in your twenties means sacrificing experiences, career mobility, and investment diversification. Take time to build a solid deposit and ensure the property aligns with your lifestyle, not just FOMO.
Lifestyle creep with every pay rise
Each promotion brings a bigger pay, but also a nicer apartment, better car, and overseas holidays. Before long, you’re earning double your starting salary but saving the same amount or less. Combat lifestyle creep by automatically increasing your super contributions and investments with each pay rise, locking in savings before you can spend them.
Following social media financial “gurus”
Instagram and TikTok are filled with self-proclaimed experts promoting day trading, crypto schemes, and property “secrets.” These influencers often earn more from course sales than their actual investment strategies. Real wealth-building is boring: consistent super contributions, diversified index funds, and patient compound growth. If someone’s selling a financial shortcut, they’re probably profiting from you, not with you.
Avoiding these traps won’t make you rich overnight, but it will set you years ahead of your peers.