Congratulations on graduation and (hopefully) making the move to full-time employment. Mom and Dad must be so proud and that first paycheck will feel exceptionally rewarding. Before you rush out the door to celebrate though, it’s time to think about your long-term financial health and personal wealth.
Undoubtedly unsexy as it sounds, odds are you have goals of “one day” owning a car, having a wedding, buying a home, starting a family, going back to school for an advanced degree, or even taking a family vacation. That first paycheck is the first step to making your goals your reality. Here are five quick tips to get you started, from Bloomberg.com:
- Take advantage of your new benefits: never turn down opportunities for your employer to match your retirement savings—a dollar-for-dollar match is a 100-percent return on your money, pretax.
- Get rid of bad debt: Bad debt is money you owe that incurs higher costs than you can expect to earn on your investments.
- Build your cash fund: A cash fund gives you fiscal flexibility to self-insure against risks of loss down the road. Liquidity is important and stowing away as much of your paycheck as possible will prove extremely useful when the time inevitably comes one day.
- Put your salary in context: Understanding the cost of living in your new job market is important. Taxes combined with the cost of living (think New York City versus Pottsville, PA) will impact how far your new paycheck will actually go.
- Invest intelligently: Take advantage of tax-sheltered investing options, like 401(k)s and IRAs.
Another responsible move to grow wealth and avoid financial stress, is to sit down with a financial advisor, like one of the experts at Apex. An advisor can look at your income, your financial obligations, and your personal goals to help you make the most of your situation. It’s never too early to start taking steps to insure your financial security for the future.