So You’ve Just Gotten Your First Paycheck? Here’s How to Spend It Wisely!
So, you’ve just gotten your first job; must be exciting right? Indeed, there’s nothing as scintillating as being able to afford your own essentials and making a name for yourself in the career that you have chosen.
Nevertheless, getting your first job can also prove difficult for you primarily because it can lead to massive debt accumulation especially if you’re the type of person that loves to impress his or her friends.
Mismanaging That First Paycheck
Indeed, one person that recalls his mismanagement of funds after his first job is 32-year-old, Anthony Badillo. Badillo had graduated from college with over $100,000 in student loan debt.
During the first years, he tried to leave a lifestyle similar to that of his friends.
Unfortunately, he always ended up having an extra bill that his friends did not have every month. He decided to change his life around and reassess his spendthrift nature after amassing over $10,000 in credit card debt.
Indeed, he decided to stay in on a couple of weekends, or even not go on a trip at all. He understood one thing that it would take a willingness to change as well as time to do so.
That being said, after he learned the vital lessons of finances the hard way, Badillo has invested his time in assisting others to avoid the same mistakes he made in his earlier years.
He is now working at Gen Y Planning as a certified financial planner, which is an online planning firm that is dedicated to assisting young people in their 20s and 30s with their finances.
Keeping this in mind, here are some essential tips from savvy financial analysts and workers on how to navigate finances the first time around.
Avoid Letting Food Deplete Your Cash First
It can be difficult to monitor your spending, especially if you live in a big city.
Indeed, you can find the finances adding up pretty first, and before you know it, you’ve accumulated a massive bill dining out. That being said, you should find a perfect balance between cooking at home and dining out.
For example, suppose you are on a summer internship and currently residing in a college dorm. If you plan on saving on money, you can take advantage of the meals from the dining hall, since you have already paid for the food.
Another option is to choose to dine out only on weekends. Additionally, you can opt to cook during dinner and eat out for lunch, as suppers tend to have a high price range as compared to lunch at restaurants.
Don’t Spend Your Paycheck If You Are yet to Receive It
One of the major mistakes that most young people make when they receive their first paycheck is to plan with money they will receive with their future paycheck, instead of money they have at the current moment.
Indeed, this is one of the major ways by which young people find themselves in debt.
Set Both Long-Term and Short-Term Goals with Your Money
The first major step when it comes to planning your money is to create both long-term goals and short-term goals. Then come up with concrete steps on how to achieve them.
Indeed, most young people find it difficult to set long-term goals and adhere to all the little details that come with setting these goals.
In fact, it is advised that short-term goals should first be set with one’s money, which then ultimately lead to one effective long-term goal. Indeed, young workers should scrutinize their objectives and monitor the progress that they have made in the last one year.
Such milestones in one’s life can be marriage, completing your mortgage, and planning for children.
Take up the 50-30-20 Mantra for Spending
This rule dictates how one should spend their income. It states that an individual should spend at least 50 percent of their income towards their personal needs and daily expenses, 30 percent towards clearing their debts and saving money, and the remaining 20 percent towards any type of spending they would like.
That being said, one should adopt a method by which a portion of their paycheck can be automatically directed towards a savings account to so as to establish a habit of saving money. This way, even if you don’t have a massive income, life can become a little more comfortable.
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