Getting your first real-world paycheck can be exciting and empowering — you’re finally earning your own salary to spend as you wish. And while you may want to treat yourself on that first payday, in reality, living on your own is pricey and you will need to keep frivolous spending in check.
Here are five pieces of wisdom on what not to do with that first, exciting paycheck.
1. Don’t count on HR to get it right
Thanks to direct deposit, gone are the days of paper checks. While automatic payments are super convenient, it eliminates the opportunity to check that your deposit and the information on your check is 100% accurate. It’s important to verify that HR has you listed to receive the correct compensation. Simply ask someone in the payroll department where you can view online paystubs, and report any errors to them directly.
2. Don’t forget to commit to saving
After paying bills and making loan payments, you may not have much remaining in your bank account, but it’s important to save even the smallest nugget. Make it easy on yourself and have a percentage of your check automatically deposited into your savings account where it will earn interest — it’s as simple as setting up an automatic transfer in your online banking portal. Vow only to touch this money in case of an emergency.
3. Don’t go on a shopping spree
Fight the urge to go out and buy a killer new work wardrobe or the latest tech product. Although work is taxing and you want to reward yourself, over time it’s wise to avoid shopper’s remorse and stash your cash. Once you have a few paychecks under your belt and you decide to buy something, spending in a responsible way will make that splurge even more gratifying.
4. Don’t assume you can manage your money alone
While being an adult is fun, it can also be complicated and confusing. I’m talking about 401(k) plans, life insurance, and the ever-daunting stock market. A financial advisor may be able to ease some of the anxiety that comes with choosing how to save and spend your money. They’ll answer all your questions — big and small — and put you on a path toward financial success.
5. Don’t forget to read up on your company’s benefit package
If your employer doesn’t completely cover your health care costs, chances are they offer a discounted rate. Take a look at the plans offered and decide which coverage is right for you. The monthly cost is typically taken out of your check before taxes each month. And don’t forget about investment matches. Take advantage of free money if your company is willing to match your 401(k) contributions.
Landing that first post-grad job is no easy task. Make all your hard work worth it and spend wisely.
One thing you should do with your first paycheck? Set up direct deposit.
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