As a young adult taking on your first job, it feels wonderful to earn a wage and become independent for the first time. However, it’s essential to make sure that you don’t let that extra money in your pocket get the better of you. A lot of younger adults struggle with issues like spending too much when they’re first employed or forgetting to budget for the future.
However, the quicker you start managing your spending, the better off you’ll be in the long-term. While there are many tips you can follow to boost your chances of success as a savvy spender, the most important is this: act your wage. Don’t be tempted to spend a fortune just because your friends do and remember that the money you earn now needs to support your future, as well as your present. Here are some guidelines you can follow as a young adult with your first income.
1. Don’t Tie Yourself Down to Too Many Payments
A regular income is reassuring. It tells you that you’re going to be earning a specific amount of cash each month. This means that you can easily sign up for loans via sites like HappyPenguin.com and subscriptions because you know that you’ll have the money to pay for them in the long-term. However, before you get too carried away with these ongoing costs, remember that jobs don’t always last forever.
Even if you’re an excellent worker and you do everything you can to delight your boss, there’s always a chance that you could end up losing your job, and your source of regular income along with it. With that in mind, avoid too many subscriptions and loans and place more of your money into savings instead.
2. Start Thinking About Retirement Early
One of the main things that young adults forget to focus on when they get a job is their retirement. If you’ve just started working for the first time, then there’s a good chance that you’ve got several decades to go before you retire. However, the faster you start saving money away for the future, the better off you’ll be. Even when you’re young, thinking about retirement early can give you a head start on building a fantastic nest egg.
Ask yourself how much you can realistically afford to save back each month and remember to take advantage of any retirement benefits that your employer has to offer. The more assistance you can get from your employer, the better.
3. Pay Off Student Loans Fast
Like many young adults just coming out of college, you’re probably going to have an existing loan that you need to think about before you can enjoy true financial freedom. These days, most young academics will need to invest in a student loan at some point. Although these loans can quickly grow overwhelming, there are many plans that you can place to help you manage the expense. Come up with a strategy early on for how you’re going to repay what you owe.
If it helps, consider talking to a financial advisor who can walk you through your options. Most financial advisors have plenty of experience working with students who are stepping into their careers for the first time and are willing to work with you.
4. Treat Yourself in an Affordable Way
When you start reaching your goals, both in your personal and professional life, it’s essential to treat yourself and celebrate. After all, we all need to enjoy the little things in life and money can help with that. However, the key to success when you first start your job is making sure that you don’t spend too much on your mini celebrations.
Try to find a more affordable way to treat yourself. For instance, check out where free concerts are happening in your town and invite your friends along for an awesome weekend out. Getting your favorite ice cream or sweet treat might not be too much of a big deal sometimes, either. However, you should avoid spending too much cash on unhealthy items.
5. Invest in your Future
Finally, remember to invest in your future. This doesn’t just mean putting money into your retirement accounts or emergency savings fund. It also means being willing to spend a little extra when you need to if it means paying for training that could help you to get a better paycheck at your job or investing in some great clothes for work.
Although sometimes it’s essential to save money whenever and wherever you can but other times you really do need to spend money to make money. Plan each expensive purchase you’re going to make and tick it off as an investment into your future.