How to use your first paycheck for your financial planning

What to Do With Your First Paycheck

PNB MetLife 19-05-2016 11:55:19 AM
Why couples should talk about financial planning

You've graduated from college and landed your first job in the ‘real world’.. Now that you have your first paycheck, it's easy to feel as though you're finally making ‘real’ money - — but that first paycheck is just the first step in learning how to deal with money management and prepare for your financial goals.

Before splurging on an expensive purchase, consider how your spending and saving habits can impact your future livelihood and retirement planning. Developing good habits and being responsible with your money can mean financial freedom down the road. Here are some things to think about: Read More

How to manage your debt and budget

"If you have college debt, dedicate a large portion of your earnings toward eliminating that debt," suggests financial planner Edward Kohlhepp, Jr. He points out that debt can drag on your finances for a long time. Getting rid of your debt should definitely be one of your financial goals.

List your bills and needs, and make sure those are covered. There is no substitute for financial planning. Your money will go further if you know how much is coming in, and you watch where it goes.

How to plan your health insurance

While some companies offer health insurance benefits, sometimes you will have to deal with it yourself. Evaluate your coverage needs for health insurance and choose a plan that works for you.

However, someone with multiple healthcare visits a year might consider a more traditional health plan. Even though you might pay more on a monthly basis, you will have fewer expenses from your own pocket. Your first paycheck can be the first step towards handling your future health with financial planning.

What to do about my retirement fund?

Even if you think you are too young or that you don't have enough cash to build a nest, - now is the time to start dealing with your retirement planning. You will have a better chance of long-term success if you start early. Setting aside about 10 per cent of your monthly income will be very sufficient.

Some companies might even offer to match employee contributions on a group retirement plan. That means your employer will kick in the same percentage as you. Because many employer matches are in the range of four to six per cent of your paycheck, setting aside 10 per cent of your income should be enough to obtain the full employer match.

That's free money for your post-retirement future — don't leave that sitting on the table. Even if your employer doesn't offer retirement planning, you can still save for retirement. If you qualify, consider opening an individual retirement account and having a portion of your paycheck directly deposited into the account. Setting up automatic contributions to a retirement account is the best way to develop a saving habit — you won't risk forgetting about it or being tempted to contribute less money.

As you continue to earn money at your new job, figure out what matters to you. Speak with a trusted professional who can help you create a spending plan that allows you to meet your needs and prepare for a secure financial future. A financial planner can always be helpful with your money management, if you not sure how to go about it.