Articles - Archived Expert Advice

First Paycheck: Spending and Saving

In a few weeks, I'll be starting my first entry-level job out of college. I can't wait to get my first paycheck, but I want to be smart about saving and spending it. Do you have any tips?

Congratulations on your first job and for wanting to be responsible with your money. Spending some of your hard-earned money is perfectly okay, but before you do, be sure your necessities are covered first.

Remember, your employer will automatically deduct taxes and Social Security from each paycheck, which will reduce the amount you may expect to receive. Keep in mind, though, that the point of Social Security deductions is to help fund a portion of your retirement.

If your employer offers health insurance and you elect to participate, look into signing up for automatic debits to pay for insurance premiums. Employers generally pay for part of the premium, so the amount you have deducted is likely to be less than the cost of buying insurance on your own—and less than the cost of you suddenly becoming ill or hurt, resulting in large medical bills. Learn about your employer's health insurance options, and be sure to ask questions to make sure you select the plan that's right for you.

If your employer offers a retirement plan, sign up for that, too! You're probably going to want to retire someday, which means no more paycheck! You likely want to build up savings for when that time arrives. Often, employers will match some or all of the amount you contribute to the retirement plan, so you'll build even more savings for a comfortable retirement.

Striking a balance between saving and spending isn't always easy. That's why our team of financial counselors and planners is here to help. Call us at 877.367.5428.