Congratulations, all your hard work has paid off! You've got your first paycheck! This week, let's discuss how to best use it and get the biggest bang out of your buck.
Whether that first paycheck comes at the tender age of fifteen or after you graduate college, it is important to have a plan on how to best use your first paycheck. Let's look at our options.
Zig Ziglar famously said, "If you aim at nothing, you'll hit it every time." This is even truer with money! There will be plenty of room for fun in your finances, especially at this stage of life, but this is also an important opportunity to cast vision for your future. What do you want life to look like when the fun fades? Maybe it is as simple as saving to have more fun! So, set crystal clear goals with your first paycheck and you'll know exactly what to do with this income and the future income to come. Do this before you get paid and you'll be ahead of the game called life.
Once that paycheck is in your hands, take two minutes to make sure it is correct. Payroll departments can make mistakes too. At the same time, since this is your first check, be sure to understand everything on your pay stub including how taxes and benefits work. I help each client understand their pay-stub in detail. Book a free consultation today and let me help you decipher that first paycheck. Be sure to cross check all your calculations. You can do so by using a simple online pay-stub calculator. It's important to compare the results of your hard work with what you expected to receive.
Take those goals you prioritized before getting paid and budget that first paycheck. If you live for today, you won't have enough money to live for tomorrow. So, make a solid plan on how your money will be spent, including your goals in the process. For more info, check out my previous Savvy Saturday video, "How to Build a Strong Budget that Actually Sticks."
Whether you are saving for something like a vacation or general saving is a goal built into your budget, you need to be saving in some form or fashion. If every dollar you make is spent and nothing is going toward your future, that is the definition of living paycheck to paycheck. For more tips on saving, check out "The 5 Big Things You're Forgetting to Save For" and "How to Make the Best Vacation Money Plan."
Hopefully, you are in a position where you don't have any debt. But if you are struggling with debt like student loans, apply anything extra you can to pay down the principal of those student loans. Be sure to contact the loan company and direct them to pay the extra amount toward the principal of the loan only. If not, what you pay will only go toward interest. Need help? Let me. Contact me for a free consultation today.
Living below your means is a wealth-building habit. If you are debt free at a young age, staying that way is key. If you simply save $100 a month, that money could amount to millions by retirement age. Automate your investing so you'll never miss it and, in the process, you'll find more money to fund your dreams!
Question: Have you earned that first paycheck and are struggling with how to spend it wisely? Have you been earning for a while and have little progress to show for it? Don't beat yourself up. It's never too early or too late to start. Let me help.
Additional Action Items: Come join my FREE Facebook community, the “Strong Together Money Community,” to stay informed and encouraged as you grow in your financial journey. Check out my free e-book to gain additional tips on how to save and budget wisely. Not sure how to break free of that cable bill without feeling like you're missing out? You can cut those costs and still keep your content! For more information, check out my Cable Cutting Academy today!