Author Bowtie Team
Updated on 2025-06-05
Disclaimer: This article is translated with the assistance of AI.
Fresh out of university? Ever splurged on pricey savings insurance for friends or wasted cash on worthless investments? Imagine your personal finances as a business, how can you manage your finances effectively? Planto shares with you 6 mistakes that fresh graduates in the workplace should avoid. Discover the top 6 financial pitfalls to dodge!
1. Buying Too Many Unnecessary Insurance Products
Insurance can help you get basic living protection if unexpected accidents occur or you lose your main income source, but before buying, do your homework to determine which products are most useful for you.
For example, in your twenties, you may not need to start so early on long-term, expensive premium savings life insurance ; instead, life and medical insurance with protection elements are cheaper the earlier you buy, so consider them first. Many companies also provide basic medical coverage for employees, so evaluate if that’s sufficient.
When buying insurance with investment components, remember to read the terms carefully, understand how much value is “non-guaranteed,” and know how much you’ll lose if you cancel early.
Don’t buy insurance products you don’t need just to help out a friend who’s an insurance agent. If a friend is persistently persuading you to buy, assess whether they’re trustworthy and committed to the insurance industry long-term, so that you won’t be discovering later that the policy doesn’t match your expectations when you need to claim.
If your friend has left the job by then, your policy might become an “orphan policy” with no one to follow up. Even if the insurance company assigns another agent to handle it, they might only provide basic services.
2. Moving Out Too Early to Rent
University students get used to the freedom of hall life and might not want to live with family anymore, but Hong Kong rents are sky-high. Renting a 300- to 400-square-foot unit in the city center usually costs over ten thousand dollars, while the average starting salary for graduates is about $15,000 – renting alone would use up a big chunk of your income. Even sharing with someone else, rent might still exceed half your earnings. For most graduates, opting for cheaper co-living spaces or subdivided units is the only way to meet savings goals.
Moving out is all about freedom, but if it ends up tying you down with rent, isn’t that putting the cart before the horse? If your family can provide a place to stay, seriously consider continuing to live with them – you’ll save on rent and can contribute more to household expenses as a way to repay their support.
3. Spending Too Much on Entertainment
Eating a buffet once costs $500, buying a new phone sets you back $7,000, and a trip to Japan can easily exceed ten thousand dollars—these luxuries don’t come cheap. As a newbie diving into personal finance, it’s natural to feel tempted to try everything, but that could leave you spending more than what you earn.
To keep that work-life balance in check, a bit of leisure and fun is essential, but always remember to spend within your means. If you’re looking to unwind, you don’t have to jet off abroad—Hong Kong’s natural beauty holds its own against nearby Asian countries. Opt for local hikes or beach swims for some budget-friendly relaxation.
Do you really need to upgrade your phone every year? Apple estimates the iPhone’s lifespan is 3 years , so you might not need to rush into a new one. If the battery’s not holding up, swapping it out is a more eco-friendly choice. When it comes to eating out, sometimes skipping the extravagant feasts and exploring hidden, affordable local spots for authentic Hong Kong flavors can be a wallet-friendly and delightful experience.
4. Ignoring Your MPF Accounts
You might have already accumulated several MPF accounts from your past summer jobs. If the account balance is too small, it might not seem worthwhile, and you could even forget how many MPF accounts you have in your name.
Even if your MPF account balance is modest right now, it’s still a great starting point for a fresh grad to dip your toes into investing. With proper management and consistent contributions, it can grow into a solid retirement nest egg over time.
To check how many MPF accounts you have, simply fill out and submit the Personal Account Information Enquiry Form to the MPFA. Once you’ve sorted that out, you can consolidate your existing accounts for easier management by completing the Scheme Member Personal Accounts Consolidation Application Form and submitting it to your chosen trustee.
You can also visit the MPFA’s Personal eAccount Enquiry website or download the dedicated iOS or Android app to manage your accounts.
5. Poor Credit Card Management
After starting a full-time job and having proof of income, some people might let loose, apply for multiple credit cards, and go on a shopping spree to satisfy the buying desires suppressed during their student years. However, when using credit cards, you must repay on time; any late payment records will leave a 5-year mark on your personal credit record, which could affect your future mortgage loan applications with banks.
Having one or two credit cards is enough for graduates; otherwise, applying for too many with different due dates increases the risk of forgetting payments. If you have multiple credit cards, it’s recommended to download a smart financial app to automatically remind you to pay on time before the due date.
6. Lacking Comprehensive Goals and Plans
Working and earning money isn’t just for survival; you must have dreams and goals to stay motivated. Saving money is the same—ask yourself, what am I saving for? Traveling? Buying a house? Getting a nice car?
It’s recommended that you use available financial apps to track expenses and set personal budgets, review if your spending is worthwhile, thereby improving your financial management, and start saving properly for goals like buying property, traveling, or getting married.
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