You Got Your First Job, Now What Should You Do With Your Money

Categories: Budgeting, Jobs

Your first job–congratulations! We’re so excited for you. Getting your first job is a huge deal. Definitely celebrate, but make sure to take care of a few practical matters beforehand. We’re highlighting four things you should do right away once you sign on the dotted line for your first job.

1. Automate your savings.

If you’re nervous about spending your newfound earnings too quickly, consider automating your savings. You can set it up so whatever amount you want to save is automatically withdrawn from your paycheck and placed in the appropriate account. Check out interest rates for different types of accounts before opening one; a Share Certificate or CD account is one way to get a higher interest rate and make sure you can’t touch the money for a set period of time.

2. Set up a 401k.

It might sound crazy to start saving for retirement at such a young age, but it’s actually a super-smart move, especially if your new employer offers a 401k match! If an employer offers matching, it’s usually in the range of 2-4%. Setting this up right away means you’ll be taking advantage of the matching from the start, allowing your funds to grow while you get to work.

3. Update your budget.

Hopefully you’ve been operating on a budget for a while now, staying on track throughout high school and college. Once you have your first real job, you’ll need to update your budget based on your new income. If you’re moving to a new city, you may also need to update expenses like rent and utilities. Consider using an app for budgeting if it’s easier! There are many great ones out there; a popular favorite is Mint. And don’t forget to set aside money in your budget for a trip or fun experience. You’ve earned it, especially if you stick to your budget.

4. Make a game plan for repaying your student loans.

For federal student loans, you have a six-month grace period after graduation before you need to begin repayment. For some private loans, the grace period may be as short as three months. Make sure you’re prepared for repayment by figuring out what your monthly payment will be and incorporating that fixed expense into your monthly budget. Missing a payment hurts your credit score, so consider setting up automated online payments to ensure you’re always paying on time.

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!