Smart Financial Moves for Your First Job

Once you graduate and find your first real job, it is easy to feel like you have more money than you do. After years of living on contributions from family, part-time jobs, and student loans, a regular paycheck can feel like a windfall. For most people, however, that initial, entry-level job will not offer great pay. It is a necessary step for your career, but it is important to make smart financial choices during this time.

Choose Affordable Housing

If your career brings you to a high cost of living city, you will probably experience sticker shock when you go apartment hunting. Even more affordable cities often have high rents in their downtown areas. You may want to live in a convenient location, accessible to not only your workplace but bars and restaurants. Choose between location and roommates; don’t move into a place you can barely afford. Doing so makes it more difficult to save and makes day to day life more stressful. If living close to the action is important to you, roommates make it more affordable. If you prefer privacy, you may need to find an apartment in a lower-cost neighborhood.

Get Your Debt Under Control

It is common for college students to acquire some credit card debt during college. Credit card companies are surprisingly willing to offer their products to students. Even if you are responsible, it is easy to rack up some debt from traveling home on holidays or other expenses. Make it a priority to get this debt paid off as soon as possible. Look closely at your budget and find extra money that you can dedicate to this process. Student loan debt is common for many college graduates. This expense allowed you to earn the degree that led to your job, so it isn’t bad debt, but you don’t want to pay more than you need to. Refinancing your existing student loans with a private lender allows you to transfer to a new product that offers more favorable terms, saving you money each month.

Make Automatic Contributions to Savings and Retirement

It is easy to think you will save plenty of money when you land your first job. Whether you worked through school or not, your first real job often offers a significant increase in the money you are bringing in. Unfortunately, it is too easy to get caught up in lifestyle creep that comes along with a regular paycheck. You initially need to spend some money on work clothes. Eating lunch out with your new coworkers seems like an important part of the bonding process. After a long week at work, stopping by your favorite bar or restaurant seems like a treat you deserve. If you aren’t careful, it is easy to blow your entire paycheck and have nothing to show for it.

Set your paycheck up to direct deposit a percentage of each paycheck directly into your savings account. If it never makes it to your checking account, it is unlikely you will miss it. You may plan to transfer money manually, but it is much more difficult to be consistent this way. Take advantage of your company’s retirement plan. It may seem too early to worry about retirement, but a small amount invested while you are young has decades to grow. Try to contribute as much as your employer will match, and aim to max out your contribution.