Q: I just graduated from college and have begun my new job. When it comes to managing my first “real” paycheck, I want to get it right from the beginning. Do you have any advice for me?
A: First, congratulations on your huge achievement and good luck with your new career. Considering present economic conditions, landing a job right out of school is counted as success from the start. It is an exciting time, but it’s also a time of new financial responsibilities. “Save more, spend less and stay out of debt” is advice that will serve you well for a lifetime.
Establish a Savings Plan
Create a realistic budget that balances what you take home in your paycheck against your regular monthly expenses. Among your expenses, include a small amount that will go directly into a savings account. Although your money may not stretch very far at first, it’s important to make savings a habit as soon as possible. When you need the cash for an emergency, you will be glad you have a savings plan.
Cook-In rather than Take-Out
You may find you have little time or energy to prepare breakfast or dinner for yourself, or to pack a bag lunch to eat at work. That can become a big problem, if it means that you end up with expensive takeout meals instead of much more economical and much healthier home-prepared meals. As an example, spending $40 a week on takeout meals adds up to over $2,000 a year. That sum could be used to pay a couple of month’s rent or could be the beginning of a down payment on your first house. If you make time to plan and shop for each week’s meals, your food costs will drop sharply, and you can make better choices with the money you save.
Be Smart About Debt
You have learned much while in college. When it comes to debt, don’t be stupid. While it may be tempting to run up a credit card balance in order to furnish your apartment, build a work wardrobe or acquire some new electronics, it’s not a good idea. If you are like most recent graduates, you already have thousands of dollars in student loan obligations. Adding to that debt makes it more difficult to pay off your balances and begin to save for your future.
Plan Now for Retirement
As you begin your new career, it may seem too soon to be thinking about retirement. However, it is never too early to begin contributing to a retirement account. Contribute to your company’s 401(k) if one is available or open an individual retirement account. Each choice offers tax-advantaged opportunities to build for your future.
Count on Your CPA
As you start your adult financial life, it’s a good idea to get to know your local CPA. He or she can help you understand your choices and make the best decisions for your financial future. You may contact me at (409) 892-0233 or (409) 883-5306. My email address is brad@ekc-cpa.com.
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Solutions
- Establish a Savings Plan
- Cook-In rather than Take-Out
- Be Smart About Debt
- Plan Now for Retirement
- Count on Your CPA
Let us assist you
Beaumont: 3440 Eastex Fwy., Beaumont, TX 77703 Ph: (409) 892-0233 * Orange: 2250 Gloria Dr., Orange, TX 77630 Ph: (409) 883-5306
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