Make Financial Decisions When You Get Your First Paycheck

Thursday, January 10, 2013, 2:00 AM | Leave Comment

You spent so much money by going to college. You have graduated now. You have your first full-time job. The money coming is good – it can always be better. Now you get your first paycheck. You spend it all in one week.

Of course, you gave some money to your mother as you had promised. She carried you for 9 months.

Another week passes by and you get your second paycheck. What do you do now? You can’t spend it all in one week again. You are a responsible human – even though many humans and responsibility are mutually exclusive; one does not know about the other but that’s besides the point – you decide to spend a little and save the rest.

Now is the time to make some financial decisions about your short-term and long-term financial future.

Here are some things you can do when you start working in your first full-time job:

  1. Start saving for retirement

    You are young. You might not think of retirement as a viable way of saving but this is the best time to enroll in your workplace savings plan – 401(k), 403(b). Contribute as much as you can, at least enough to match your company’s contribution. Talk to your company benefits coordinator.

    Retirement should be the most important Entrée on your financial menu. Develop a strategy to save and keep saving in your retirement account. Retirement must be one of your biggest financial goals.

  2. Follow key financial principles

    Pay off high interest debt and establish an emergency fund to build your financial footing. Conducting a financial fire drill and living it.

    Try to get rid of the debt – student and personal loans – as soon as possible. So you have a clean slate to continue saving and investing.

  3. Save for your future the easy way

    No access to a retirement plan at work, or already contributing the maximum amount? With as little as $200 you can start improving your retirement readiness. Create & Stick to your financial resolution.

    For personal savings, the best thing is to have a percentage of your paycheck directly deposited in your bank account.

    The economy has still some ways to go up. You must be prepared to save by spending less. Some folks have shown complete irresponsibility when it comes to their financial dealings.

    Many have declared bankruptcy although for many different reasons – loss of job, healthcare bills and such.

  4. Learn the basics of investing

    When you understand the essential concepts, you can make better investment decisions. Now is the best time to review all fundamentals of investing. Educate yourself as much as you can.

In a Nutshell
You are young. You have your second and the rest of the paychecks coming in week-after-week with a first full-time job. You should start thinking about not only investing but retirement as well. Just do it. Find a good Financial Adviser.

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