What To Do After Receiving Your First Full-Time Paycheque

Leaving home and becoming an independent person has its highs and lows. There’s the excitement and freedom of living outside of your parents’ place and doing things on your own terms, paired with the challenges associated with having to do more “adulting” for yourself.

When you get your first paycheck from your first full-time job, it’s wise to temper your spending enthusiasm, so you don’t end up having to move back home if you don’t want to. Financial management may not be the most glamorous of topics, but if you want to become a money-smart woman or man, it pays to learn the basics sooner rather than later.

While each person’s financial choices vary according to their goals, personality, and lifestyle wants and needs, there are some general tips to keep in mind. You may find the following strategies helpful when deciding what to do after receiving your first main wage deposit this year.

Calculate Your Regular Living Expenses

If you haven’t already done it, start by sitting down and working out exactly what your main living costs will be each month. Rent is usually the biggest expense for most people, but apart from that, you’ll need to allow money for things like food, utilities, phone and internet, car registration, public transport, and insurances.

Once you have a clear idea about what you’ll need to pay for, calculate how much of your monthly (or fortnightly or weekly) paycheck you’ll need to budget for the essentials. When you get each payment from your employer, it’s a good idea to set aside these funds right away, or even pay the bills first thing when possible.

Set Up Bank Accounts

You will already have at least one bank account in place, as this is going to be what your paycheck gets deposited into. However, it’s wise to also create one or more savings accounts. Talk to your employer and your bank about having automatic transfers set up so that a percentage of your paycheck goes straight into your savings account(s).

You might like to have one savings account for your regular living expenses, so this money is kept aside and you don’t accidentally spend it; plus a second savings account for you to use to accumulate longer-term savings funds. For instance, you might save up for a holiday, a car, or a house deposit. It also pays to create an emergency fund so you have some short term savings to dip into if a large, unexpected expense arises, like the need for a new fridge.

By having set amounts go directly into these separate accounts, you won’t be tempted to spend the money on wants rather than needs. These boundaries are particularly useful when you’re new to budgeting and living independently, and don’t have a lot of practise at being restrained or seeing how far money does (or rather doesn’t) stretch.

Pay Off Debts

Once you start earning a full-time wage, it’s also smart to set aside some funds each payday to start reducing any debts you may have. You could have student loans from university, car loans, personal loans, credit card debt, or even owe your family members some money. The sooner you start chipping away at these outstanding amounts, the sooner you will be free of them and the less interest you will accrue and be liable for over the long term.

Treat Yourself

Once you have taken all the sensible steps listed above, feel free to treat yourself! You’ll only get your first full-time paycheck once, so if you have the available funds, it’s nice to spend a little money on a special keepsake, e vent, or outing that you’ll be able to remember for ever and feel proud of having earned.

For example, people often go on a shopping spree (perhaps buying a new suit or handbag for the office or getting a tech upgrade), or they buy tickets to a special concert or another event. You might decide to treat yourself with a new hair cut or a relaxing massage or facial after your hard work or buy something to give your home or car a freshen up. Whatever you choose to do, try t o think of something that will make you feel good and that will be memorable.

How you spend your hard-earned dollars comes down to your circumstances, personality, and money management style, but by following the tips listed above, you should set yourself up for a more financially savvy and lower stress future.