Stepping into the working world is a big step. Sometimes the motivation to make it to the end of the month is the juicy paycheck that will be waiting for you. Your mind is going crazy with ideas of what to do with that money, how to invest your first salary etc. Here’s a little advice on our list of the top 10 things to do with your first salary. Let’s dive in!
Take stock of your loans
Many of us come out of university a lot poorer than we stopped to realize. Student loans, car payments, home loans all start to add up. If you don’t take stock of these early on, you could end up in much more debt than you could ever fathom. This is thanks to something called interest which often rises steadily from a year-to-year basis.
Set up a budget
Once you’ve figured out what you owe, it’s time to figure out how you’ll pay it. Set up a monthly budget for everything including food, rent, entertainment, and of course accounts once you’ve worked out. How much you can afford to spend on each, you can figure out how long it will take you to pay up those long-term accounts.
Speak to your banker about putting away a small amount into an investment each month. They can assess your finances and provide you with information on the best investments that will work for you. With good returns and easy access to your money that you can need in case of emergency.
Start funding a retirement account
When you’re young it’s easy to feel like retirement is too far away to even consider. It’s also easy not to realize how quickly the years go by. In some cases, you might be lucky and your employer will provide you with a pension fund. So you might want to check if this is the case. If not speak to a financial advisor about starting a retirement fund for yourself.
Invest in health insurance
Perhaps you’re lucky in this regard if your employer provides this for you and in the future for beneficiaries you may have, others might not be so lucky. If your company does not provide health insurance before your paycheck even rolls you might want to research the best coverage available for you. In some cases, you might only be able to afford only the most basic health care but it is always a good idea to have health insurance no matter how minimal the coverage is.
Figure out your financial goals
We all hate those “where do you want to be in five years” kind of questions. But in terms of financing, we may need to ask this question ourselves. So that in five years we don’t have to work as hard as we’re doing right now. Envision what kind of lifestyle you would like to have and work towards that goal whether it’s paying off your student loans a little faster or spending a little less on recreation. Each month every little bit counts.
Set up Auto transfers
Some expenses are going to come in monthly. Rent, car payments, etc. the kind of payments that stay the same each month. If you want to stay on top of it and not have to deal with penalties a good idea might be to automate those transfers. You might want to include payments in your savings account.
After you’ve done all the responsible things which hopefully you’ll have done before actually getting paid. It’s finally time to treat yourself to that and you said you would get with your first salary. Whether it’s an incredibly indulgent ice cream sundae or a gorgeous new wristwatch go get it.
Thank your parents
For those with supportive parents, you have probably had all their positive affirmations and of course financial support while you were out trying to make it. In this case, nobody deserves to be treated more than they do. An expensive bracelet, some trendy shades, or a fancy dinner will also never be unwelcome. You may also want to consider anyone else that has helped you along your journey just remember to always be thankful.
Help someone else
When you’ve treated yourself and your loved ones a great idea is to extend a hand to others. Do some charity work, give some donations regardless of how great you felt and you received that pay stub. You’ll probably feel even better after you’ve helped if someone else has a leg up just like you were given, pay it forward.
So these are the top 10 things to do with your first salary. Therefore now you might have an idea about how to spend your first salary and how to invest your first salary.