You’ve spent years preparing for this time in your life. Hours of late-night studying, fast-paced internships and nail-biting exams have brought you here, your final semester of school before you step into the so called “real world.” Soon, you’ll land your first job, pull in your first paycheck and begin fully managing your own finances. It’s an exciting time! But, it also can be intimidating if it’s your first go at managing all of your expenses with a single, steady paycheck. That’s where DebitSavvy comes in. Below, you’ll find a few of our tips to help keep you organized as you begin to establish your financial independence.
Identify your “take home” pay
While negotiating your first salary, keep in mind that your potential employer will be discussing gross numbers, not your net take home pay. That means you’ll need to account for taxes, social security, 401K and health insurance deductions that will be taken out of your paycheck each month. It’s a simple step to forget, but a little planning will help you calculate your net pay from which you’ll manage the rest of your monthly finances.
Budget for necessities
When dealing with new monthly expenses, it’s helpful to list them all, along with each bill’s due date. You might be tempted to keep track of these in your head, but doing so puts you at risk for missing one. Do you need to plan for rent, utilities, food, cell phone, student loans, etc.? Review each one and its due date, along with your paycheck schedule, to determine when during the month it makes sense for you to pay each bill. When that time arrives, remember to use your debit card to make your payments. That will ensure you use funds already in your checking account, so you don’t have to worry about accumulating new bills to pay for the old ones.
Plan for 2 types of saving
Yes, everyone’s favorite part of any budget – saving. You’ve probably been told that a portion of every paycheck should be deposited into your savings account. Here at DebitSavvy, we recommend that you plan for two types of saving. Type one is emergency savings. This is the savings account to which you’ll want to contribute at least a little money each month. It’s meant to cover the unexpected, like a steep medical bill or a car repair. The second type of savings we recommend is related to your long-term financial goals. Do you have aspirations to buy a house or travel to Europe? It’s never too early to start planning for these expenses and set aside money to reach your goals.
Seek Financial Advice
This is an important step that is easy to overlook, but can be tremendously valuable. There are many resources to help you identify your long-term financial goals, build a realistic budget for your lifestyle and avoid debt. You can even reach out to a financial expert to help you analyze your income and budget your expenses. With the guidance of a professional, your long-term goal could change from wanting to buy expensive clothes and jewelry to focusing on paying down your student loans quickly. And don’t forget, DebitSavvy.org is a free resource to help you along the way. As different situations arise, DebitSavvy can be your go-to resource for questions and answers for managing your money wisely through debit.