If you recently started your first full-time job, you’re probably dreaming of the day you get that first paycheck in your hands. However, payday is about more than just pocket money now. Even if you make enough to be financially flexible, a budget and a good plan can help your grow your wealth and save for years to come. A real job comes with real financial responsibilities, so read on to discover four things you should know about finances as you begin your career.
Save for Retirement
Although retirement may be a few decades off, it’s important to start saving now because a few dollars saved each week can add up to a big payoff in the future. Does your company offer a matching contribution for retirement savings? Consider contributing the maximum amount to take full advantage of this benefit. You can also utilize tax-sheltered savings accounts to make putting money away for your golden years easier. Take the effort early on to make this process as easy as possible. Once part of your paycheck is taken into a 401k, you won’t have to think too much about it until you need it. By which time, it will have grown into a tidy sum.
Get a Bank Account
If you’re among the two billion people worldwide who lack a bank account, your new job and regular paycheck means it’s time to trade that piggy bank for a checkbook. Many banks offer special incentives if your job pays by direct deposit so you can rake in some extra dough. Are you plagued with a spotty financial history? Consider applying for an account at your local credit union. They are run by your local community, rather than a large corporation and can often have better interest rates than the average bank. Do some research to find out what would be best for your needs!
Set Financial Goals
Whether you want to pay off your student loans, put a down payment on a house or just save up for something fun, having a financial goal can help keep your budget on track. Write out your goals at the beginning of each year and develop an action plan to help you reach them. If you have a big goal like becoming debt free or starting a family, look into financial planning classes to help you achieve your dreams. Setting ahead money for investments or even just to save for something nice is deeply satisfying and helps gain a forward looking perspective on your finances.
Use Debt Wisely
Taking out a loan for a large purchase like a car or house is a great way to spread out the cost, but be careful about overusing debt for everyday expenses. All those little expenses can quickly snowball into a financial avalanche. Take advantage of the convenience and rewards that credit cards provide without getting buried in debt by paying your balance in full each month.
Financial responsibility is important, but don’t turn into a Scrooge. Having fun and enjoying your money makes the daily nine-to-five worthwhile. Do not forget to spread your good fortune around. Making a charitable contribution or donating your time is a great way to give back to your community. However you structure your budget, it is important to set aside money each paycheck for each specific part. It’s much easier to remember to make charitable donations when Banks will often let you automate putting money in your saving account or paying rent, which can free your mind for other parts of your finances. Starting a new career is the perfect time to start planning out your financial future. Have confidence in yourself and your dream and go forth.
By Lizzie Weakley
who is a freelance writer from Columbus, Ohio. In free time, she likes outdoors and walks in the park with her three-year-old husky, Snowball. She recommends FCCU – First Community Credit Union.