Being Financially Responsible Series: Your First Full-time Job
Receiving your first full-time job is a new and exciting time that should be celebrated. It is also a great opportunity to learn new saving habits that will set you up for success. There are so many ways to practice financial responsibility, read our tips below to better prepare you for saving and budgeting your new income.
- Establish a budget for yourself – There are many ways to set a budget for yourself. Many recommend using the 50/30/20 rule for setting a budget. This is where 50 percent of your paycheck goes to things that you need. For example, rent, bills groceries, and other expenses that need to be paid every month. 30 percent of your paycheck gets budgeted for expenses that you want. This could be for clothes shopping, going out to eat, or anything else that you can live without. Finally, 20 percent of your paycheck goes to your savings. If you need help putting the money aside and not touching it, opening an additional savings account to add that 20 percent every month can help with that. Read our article on savings accounts here and find the best account for you.
- Take advantage of your company’s retirement savings plan – If your company offers a 401(k) plan, take advantage of it. It is never too early to start saving for retirement. Even if you can only contribute a little bit every paycheck, it will start gaining interest to help future you. Use our Retirement and 401(k) calculators on our website here to figure out how much money you should be saving to reach your personal retirement goals.
- Work on paying off debts – In order to really take advantage of a full-time paycheck, it is important to pay off any debt you may have. There are many ways to do this, but the best and most efficient way would be to pay more than the minimum monthly payment that is set for you. If you can only afford to pay the minimum monthly payment, keep doing that until you can afford more. Paying more than the minimum payment every month will quicken the payoff time.
- Apply for a credit card and learn how to use it – Having a credit card can help you build your credit score which can help your financial future. And now you have a steady paycheck to pay the balance every month. It is important to remember how to own a credit card responsibly if you plan to get one. Read this article from Forbes if you need tips on how to use a credit card responsibly here.
Receiving your first paycheck from your first full-time job is new and exciting, and financial planning seems to get put lower on the to-do list. Starting these habits early will help you build a financial future that will get you far.