Think back to when you got your first job. Were you were scared? Not of your boss, or your new colleagues, but of the financial responsibility that you suddenly had (okay and maybe your boss, too!)

You might have even been working for a while now, but that doesn't mean you don't still feel a bit frazzled, especially when it comes to your money, right?

Well, you're not alone, so don't worry. Most young professionals are faced with the challenge of being responsible for their own financial affairs. And most have little or no knowledge on where to start, placing their financial future at risk.

This is according to John Marsden, National Sales Director at PPS, the financial services provider focused on graduate professionals, who says while attempting to survive and succeed in the working world, personal finances often fall to the bottom of the priority list. “As a result, it is imperative that those entering the workplace are able to educate themselves or can find professional help on how to create a solid financial plan to avoid future repercussions.”

So, to avoid this happening to you, or to fix the situation you're in, here are the common misconceptions young professionals have about their financial affairs:

I don’t earn enough to save
The bottom line is everyone should try and save money. “Begin by calculating exactly how much money comes in and where it is spent to determine a realistic amount to save each month. It is extremely important to track all expenses to see where overspending occurs and try to cut back on unnecessary costs, which usually include eating out or entertainment," says Marsden.

He advises young professionals to set an automatic monthly transfer from a current account into a savings account as soon their salary gets paid – no matter how little the amount. The principle is to pay yourself first and use the power of compound interest.

I am young and healthy and don’t need insurance
Many young professionals make the mistake of not taking out medical aid or income protection when they begin working as they feel they are in their prime and nothing can happen to them, says Marsden. “Unfortunately, it does not matter how young or healthy someone is, if they are involved in an accident and become permanently disabled it could be the end of their career before it has really started. In the same vein, if they are badly injured their medical costs could end up placing them under severe financial strain. Taking out appropriate cover can make a big difference in the quality of one’s life following a major incident. It will also prevent placing a massive financial burden on those whom they become dependent on.”

Retirement is for old people
Professionals should start saving for retirement as soon as they receive their first pay check. “Money saved from age 20 will have a 40 year growth period, whereas savings from age 30 onwards will only have a 30 year growth period. It is also easier to contribute money towards retirement when one is still young with no dependents as opposed to trying to save for retirement while raising a child. Using the tax benefits of a proper retirement place means that the Receiver of Revenue is directly helping your save.

I will pay off my student loan at a later stage
Marsden says all loans compound interest over years, which means the longer it takes to pay off the debt, the bigger the amount of interest. “Rather choose a payment plan that works with your income and start paying it off to avoid drowning in interest at a later stage.”

I need to save for my children’s education
Saving for children’s schooling fees should not be a top priority at this stage. “Before contemplating this, it is vital to build a solid financial foundation first. This means having an emergency fund equal to six months’ expenses, no credit card debt and sufficient savings for retirement.”

I only need to think about finance when I have kids and mortgage
He says the beginning of one’s career provides the perfect time to analyse and manage finances. “Personal finances can get increasingly complicated with age, as one has to deal with mortgages, children, medical bills etc. By examining income and expenses on a regular basis, one can make small changes to financial behaviour in order to have solid habits in place when finances do become complicated.”

It is not a big deal to skip a few credit card payments
The easiest way of losing control over finances is by letting credit card debt pile up, says Marsden. “Once a payment is skipped, the card holder will be charged significant additional interest on the amount, which will increase the monthly payment amount. This negligent behaviour can lead to severe financial distress and will seriously affect ones crediting rating, meaning you may not be granted loans in the future.”

While young professionals may not be earning high salaries yet, it is crucial for this group to create a sound financial plan in order to foster good financial habits and ensure better financial security in the long term. When you get future salary increases always put 10 percent of it away before you spend it on anything else,” concludes Marsden.