For recent college grads, getting their first full-time job that’s salaried is a drastic difference from their experience with working part-time jobs and making it through school. When you get your first serious paycheck, it’s a great feeling. It can also be incredibly tempting to go out and spend it on something to celebrate. While it’s perfectly fine to splurge on occasion, your first full-time job is the time to get serious about how you handle your money. Here are some tips for making the most of your first salaried job.
Negotiate your salary
The first step you must take in your first salaried job is negotiating that salary. Generally, companies can offer you more than they initially say, especially if you prove yourself. Many people simply do not ask for a higher salary and miss out on the change to negotiate for more money. Even if it’s a slight increase of a couple thousand, it makes a difference and increases your earning potential later on.
Create a budget
Even if you don’t have that many expenses, it helps to make a budget. Making a couple of thousand a month might initially seem like a lot, but if you aren’t careful, you’ll overestimate how far that money will go. Keep track of how you spend it and calculate any monthly payments before you allocate money elsewhere. When making a budget, account for your most important expenses first and then see how much you have leftover.
No matter how much you’re making each month, it’s important to set some aside to save for future expenses. If you’re living on your own, it’s vital that you have an emergency fund that can last you for a few months. Set aside some money from each paycheck and then avoid touching that money unless a large, unexpected payment, such as car repairs, would occur.
Pay off debt
Saving money and paying off debt may seem like they can’t be done at the same time, but they can. Save up your emergency fund while making minimum payments and then begin aggressively paying down debt. If you have student loans, car payments, or credit card debt, put extra money toward the debt with the highest interest rate and pay it off as soon as possible. In the end, you’re saving yourself money.
Look toward retirement
Far too many people look at retirement as something way in the future that they do not need to worry about right now. Even if you’re only putting $100 away each month, put what you can toward retirement. The sooner you start saving, the more time that money has to create interest and increase in value. Take advantage of your company match and even consider opening up a Roth IRA in addition to a company account. If your company doesn’t offer retirement benefits, open up your own account as soon as possible.