Categories: Financial Planning
Getting your first job can be super exciting! Making your own money from work like babysitting, lawn mowing, and pet sitting can be very rewarding. But what should you do with the money you’re earning? There are plenty of great options that’ll help you build a strong financial foundation for the future. Here are some ideas to get you started:
Create a budget.
Once you have some spending money, you’ll want to have a rough plan or framework in place for where the money should go. Check out our budget trackers for some inspiration on how to craft and stay on a budget. These are guidelines that your income, your expenses, and how much you can afford to spend after accounting for those expenses as well as necessary savings.
Start building credit.
It’s a great idea to start building credit as soon as you can! Typically you can’t get a credit card until age 18, but your parents can add you as an authorized user on their account, which works well as a practice run. You should aim to pay off your balance in full and on time each month.
Monitor your spending.
Tracking your spending goes hand in hand with budgeting. By paying attention to exactly what you spend your money on, you can start to notice trends and habits that you may not have been aware of before. Making an off-campus lunch run every day can definitely get expensive! You can start by either writing down what you’ve spent money on each day or entering it into an app or spreadsheet. Whether you go the old school or digital route, this is still a very effective tactic for tracking where your money goes.
Save for college.
If you’re planning to attend college, consider putting some of your babysitting or lawn mowing in a separate account to go towards those college costs. Even if mom and dad are covering your tuition, fees, room, and board, you may still have lots of indirect costs that come up on the way. What are those? Things like textbooks, a laptop, notebooks, and dorm room supplies. And snacks! And coffee! Sit down with your parents and do some research on what that might cost, then set a goal and start saving so you’re prepared for those expenses when they come.
Another good early habit is getting a checking account to help manage your income and expenses.
Sign up for an online checking account – a new way to bank!