The following is a guest post…
Now that you have that very first paycheck in your hands, you might wonder what to do with it. You might also wonder why you give so much of your hard-earned money to someone called FICA, but that’s a different discussion for a different day. Now that you are gainfully employed, it’s time to think about how you will organize your finances for the first time. The decisions you make now regarding your finances can make or break your financial success in the future.
Create a Budget
One of the most important things you can do to organize your finances is to create a budget. You should know exactly how much you make and how much it costs you to live. You need to account for all your living expenses. This includes your rent or mortgage, insurance, car loans, phone bill, gas, utilities, and anything else you are responsible for. This allows you to keep track of what you owe, how much you need to set aside from each paycheck, and how much you can put into savings.
Open a Bank Account
Now that you’re getting paid, you need a bank account. Shop around to see which banks offer the most incentives, such as free checks, lower foreign ATM fees, and low monthly account maintenance fees. Now you just have to open your account and start depositing your money. Now that you have money in the bank don’t let the fact that it is out of sight mean it is out of mind. Regularly check the balance in your account and keep track of how much money you are taking out.
Order Personalized Checks
You can order checks from a website or you can order cheap checks in person, but having personalized checks is always a good idea. This makes it easier for businesses to accept your check payment. For example, if you have a car note and you mail a payment each month, it’s wiser to mail that payment with your name and address already on it so that your check is readable.
Open a Savings Account
This is an account in which you deposit money you want to save. You will not have a debit card or checkbook for this account. You should make regular deposits into this account and refrain from making withdrawals. It may be helpful to put self-restrictions on what this money can be used for such as emergencies, vacations, or that house you have been saving up for. This will help you save with a goal in mind.
Learn to Balance Your Books
Make it a habit to sit down at the end of each night to record all of your receipts into your checkbook. This will help you keep your book balanced. It’s easy to forget to keep track of all that you are spending when you have a debit card and a checkbook, so keeping your expenditures written down is an important way to prevent yourself from spending too much money.