Graduation has come and gone. Now you will be earning a real paycheck from your new employer. Here are some tips to help you spend your money wisely.
Create a Budget. This is a must to ensure that bills, rent and expenses are all written down to help manage your money. Just because you are earning money now doesn’t mean you can spend it frivolously.
- Save 10% of your take home pay. If you can get into the habit of putting away 10% of your paycheck in a savings account or retirement fund, your future self will thank you later. Just make sure you never spend the money you are saving on daily activities until you absolutely have to.
- Get a Healthcare plan. Usually this will be provided by your employer, but if there will be a gap period during this transition, then cover that gap with short-term health coverage.
- Understand your salary. Understand that your salary is not necessarily what your take home pay will be. Remember you will have to pay taxes, allocate funds to your retirement, as well keep a liquid savings account for an emergency fund.
- Pay off your debts. Pay off all your debts before you make any big purchases that you may not be able to afford yet. Start with the high interest credit card debt and pay those off ASAP. Then continue with your student loan payments and remember to be on time. Becoming debt free will help create other opportunities for financial growth in your future.
- Learn how to cook. Cooking your own meals and bringing your own lunch to work will save you big time. If you would spend $5 a day for lunch while at work, then that would total $1,200 a year for those lunches. Take some time and save some money by packing your lunch daily.
- Contribute to a 401(k). If you are lucky enough to work at a company where the employer will match contributions made to your retirement plan, then it is a good idea to maximize those contributions. Usually there is a limit where the company will only match up to a certain percent of your salary, but either way they are giving you free money for your retirement. So take advantage of it.