Newly Employed? Here’s What You Need to Know

Jan 02, 2020 Work Life

Securing your first big job is exciting and a big deal. But if you're not prepared, before it's even in your hands, your first paycheck is gone.

A woman sitting and staring outside a window.

Securing your first big job is exciting and a big deal. Suddenly, you’re making more money. You always said you’d buy yourself something nice, pick up the bill while celebrating with friends; the list goes on and on. Before you even realize it, your first paycheck is gone.

Enjoy! You deserve it – just don’t make it a habit. After the initial excitement, you’ll notice that reality sets in. Word to the wise – learn smart money management skills, protect yourself, and get the most out of every penny.

Here are seven fundamental things to understand when you’re newly employed.

Budgeting

Don’t drive the new car off the lot just yet. Get a feel for what your income will be and what expenses you’ll have each month. A new job comes with a lot of changes, so make a plan for spending and saving and stick to it. Here are four steps to making and sticking to a budget.

Credit

Making purchases on credit is easy. It’s paying off debt that is hard. Remember this: the key to using credit responsibly is to only borrow what you can afford to pay back, ideally when the statement arrives. Otherwise, you’ll find yourself paying a pretty penny in interest.

Saving

Want to travel? Purchase a home? Save a portion of your income for goals you may have and start an emergency fund. To ensure success, transfer money into savings before you do anything else. Simplify things further by establishing an automatic transfer.

You can also try following the 52 Week Savings Challenge to reach a specific goal within a year’s time.

Retirement

If your company offers a retirement plan for its employees, don’t think twice and sign up. They may even match your contribution up to a certain amount. Any contribution, big or small, can go a long way when it’s been earning interest for decades.

Insurance

Protecting your assets is important. This includes more than your home and your car, it means you too. The severity of a situation may be drastically influenced by a few dollars a month in some instances. Don’t wait till it’s too late. Request a few quotes and breathe easy knowing you and your loved ones are covered if things go wrong.

Credit score

They say time is money. Well so is your credit score. A good credit score helps secure loans at the best rates when needed, saving you money. Improve your score by paying down debt, making on-time payments, and borrowing sparingly.

Credit report

Reviewing your credit report is one of the best ways to protect against identity theft. It’s simple and it’s free. Visit annualcreditreport.com for an overview of your credit accounts. Check for accuracy and report any errors immediately. Do this periodically.

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