Money Magazine - Financial Moves to Make When You Land Your First Job
Getting Rid Of Student Loan
First things first: If you have student loans, you aren't doing yourself any favors by waiting to see if your lender notices you've graduated.
Some loans have what's called a "grace period," or a year gap after you're finished with your education, ostensibly to allow you to set up an income. The thing about grace periods, though, is that interest continues to accumulate - so if you can start making payments immediately, it can ultimately save you money.
Build a budget
When you begin earning a paycheck, it can be tempting to spend it on anything that catches your eye. But managing your expenses begins with setting priorities, so it’s important to separate your needs from your wants. You can start by creating a budget, and tallying your monthly income and expenses so that you know where the money goes. Reviewing your monthly bank and credit card statements can help with this, too.
Set savings goals
Once you’ve created a budget that works for you, set your savings goals. Whether you’ve got your eye on a new car or a first home, it’s important to understand your financial priorities. Then, establish a realistic time frame for meeting those goals, so that you’ll know how much you need to save each month.
“Whether you’ve got your eye a new car or a first home, it’s important to understand your financial priorities.”
First things first: If you have student loans, you aren't doing yourself any favors by waiting to see if your lender notices you've graduated.
Some loans have what's called a "grace period," or a year gap after you're finished with your education, ostensibly to allow you to set up an income. The thing about grace periods, though, is that interest continues to accumulate - so if you can start making payments immediately, it can ultimately save you money.
Build a budget
When you begin earning a paycheck, it can be tempting to spend it on anything that catches your eye. But managing your expenses begins with setting priorities, so it’s important to separate your needs from your wants. You can start by creating a budget, and tallying your monthly income and expenses so that you know where the money goes. Reviewing your monthly bank and credit card statements can help with this, too.
Set savings goals
Once you’ve created a budget that works for you, set your savings goals. Whether you’ve got your eye on a new car or a first home, it’s important to understand your financial priorities. Then, establish a realistic time frame for meeting those goals, so that you’ll know how much you need to save each month.
“Whether you’ve got your eye a new car or a first home, it’s important to understand your financial priorities.”
Oh Shit Money!
Setting money aside from each paycheck can gradually build an emergency fund. The typical goal is to save enough to cover at least three months of living expenses in the event of a financial emergency. While that may seem like a lot, the account will grow by setting up regular contributions every week.
Save for the Older You
When you’re starting a new job, saving for retirement may be the last task on your lengthy to-do list. But starting to save for your retirement now is critical to meeting your goals later in life. The more you save early on, the more you should be able to take advantage of compounding to build your nest egg. If you have a PF Plan at work with an employer match, you might consider contributing at least enough to receive the full match amount.
Landing your first job allows you to create the foundation for a successful career. By honing your money management skills and saving wisely, you’ll be able to build on that foundation and prepare for the future.
Figure out your financial goals for the next few years.
Right now, your paycheck might cover rent and brunch, but what about five years from now? Ten? You don't need to know exactly where you'll be or what you'll be doing, but thinking about some of life's biggest and most expensive milestones now gives you time to start turning them into a reality.
Do you want to buy a house? Have a wedding? Have a child? Take a trip to Bali? Setting aside some money each month towards those goals for the next few years will make them a lot less intimidating when it comes time to act.
Setting money aside from each paycheck can gradually build an emergency fund. The typical goal is to save enough to cover at least three months of living expenses in the event of a financial emergency. While that may seem like a lot, the account will grow by setting up regular contributions every week.
Save for the Older You
When you’re starting a new job, saving for retirement may be the last task on your lengthy to-do list. But starting to save for your retirement now is critical to meeting your goals later in life. The more you save early on, the more you should be able to take advantage of compounding to build your nest egg. If you have a PF Plan at work with an employer match, you might consider contributing at least enough to receive the full match amount.
Landing your first job allows you to create the foundation for a successful career. By honing your money management skills and saving wisely, you’ll be able to build on that foundation and prepare for the future.
Figure out your financial goals for the next few years.
Right now, your paycheck might cover rent and brunch, but what about five years from now? Ten? You don't need to know exactly where you'll be or what you'll be doing, but thinking about some of life's biggest and most expensive milestones now gives you time to start turning them into a reality.
Do you want to buy a house? Have a wedding? Have a child? Take a trip to Bali? Setting aside some money each month towards those goals for the next few years will make them a lot less intimidating when it comes time to act.
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