How to organize your money once you have your first job
It finally happened — you got your first job. And you can’t be more happy and proud of yourself. After all those difficult exams, hard college partying and struggling with the lack of money — you have your first job, and your first paycheck is waiting behind the corner to be spent. And then you realize — with all those sweet sorrows of being student financed by parents — now you are a responsible grownup, with an absolutely awesome job, and absolutely zero knowledge about the finances.
We from Zuper are spending a lot of time to think about money and finances.
And when we asked our millennial team members what was the thing that bothered them the most when they started their first job — we got a unique answer: it was organizing money and dealing with its flow in first couple of months after starting their first job.
And yes — in the beginning, maybe it’s going to be hard — now you are the one who is completely in charge of your finances. But there is no reason to be anxious about managing finances and organizing your money anymore: just follow these steps, and in a few months this kind of behavior will become a routine!
Understand and learn about your taxes
When it comes to money planning, there is one thing that always comes up first — paying taxes. You need to be aware that if you work (earn income) you will need to pay taxes. And once you start your first job, it’s probably a good time to learn more about them. It’s definitely not the most fun part of being an employee, but it is also one of the most important areas of your financial picture. The tax fee will depend on the type of your job: are you a full-time employee or a freelancer. Your taxes height will also depend on which country you work in. If you are a German employee, you can use this website to inform and calculate which part of your salary will go on taxes.
Once you get your contract and set up a deal with your boss, you will probably get some basic information about paying taxes, so don’t be afraid that you will be completely on your own. Also, at some point when your salary grows to some level, you can always hire someone who will take care of your taxes. What you should know it’s that is extremely important to be in touch with the regulation in this area, and to keep an eye on possible changes in order to plan your future finances.
Get rid of any debts you have
Are there any debts from the past which are haunting you? Is there any student loan waiting around the corner to be paid? Did you pay all those bills for your mobile provider or some different membership? If any of these sound familiar, it’s time to say goodbye to any of these blasts from the past! Miscellaneous debts and unpaid bills will not bring you any good, especially if some of that debt is bringing the interest fee with it. That is why you should cover all of those with your very first salary! Of course, you can save some money to buy a round of drinks for you and your friends, but don’t forget: as soon as you get rid from “ghosts of the past”, you will be able to spend your money on things you really want.
Track your spending
While you were a student, it’s possible you didn’t care too much about what you are spending your parents’ money on. And probably 80% of you who are reading this can’t say with certainty what percentage of money was going on food, books, medicines or travel while you were on college. And why? Because, let’s be honest — you didn’t even care.
But now, when you are at the point of being your own financier, you have to know and predict your spending. Because tracking your spending is the only way to really see if there is something you are doing wrong when it comes to spending the money (for which you have worked really hard). The good thing is that our Zuper app has the ability to track and categorize your spending — just link your bank account with our app and you will be able to see your financial behavior and money organization skills all at one place!
Tracking and categorizing your spending will help you in a way you can’t even imagine — you will notice some habits in your behavior, and you will be able to change it or support it — depending on whether those habits are bad or good. On long-term basis, this is very important part of organizing your money, because if you do this right and regularly, you will be able to save some money down the road by spending less on things you don’t really need.
Create a budget
After a few months of being employed and getting a salary, you’ll probably want to start dealing with budgeting — yes, one more thing that grownups have to do. Now that you have an idea of your cash flow, setting up a budget is simple. The perfect way to do it will be this: at first, create a list of all monthly expenses you can think of: rent, clothing, auto insurance, groceries, trips, going out, etc. on one side, and all monthly incomes on the other side.
But your work will not be done there, because probably the most important part of budgeting will be reviewing it on a monthly basis. It is important to review your budget to make sure you are staying on track. After the first month, compare the actual expenses versus what you had created in the budget. This will show you where you did well and saved some money, and where you may need to improve. It is important that you establish this spending plan as soon as possible, ideally 2 months after your first paycheck, so that you don’t find yourself in financial trouble later on.
We are happy to inform you that with our app you can have it all: our Create a budget feature is very popular among our users and it has shown as very helpful financial tool, plus more importantly — it’s more than easy to use!
Check out what budgeting implies from our perspective and some basic tips about it.
Figure out your financial goals for the next few years and develop a savings plan
Your first job is going great, and you may think that after overcoming these couple of steps you are a new financial wizard. But, what about one, three or five years from now? You don’t need to know exactly where you’ll be or what you’ll be doing, but you should definitely think about the future.
If in your next-5-years plan you have just one of these things: travelling to Maldives, getting a new apartment, organize wedding, have a child — NOW is the right time to stop just thinking about some these most expensive milestones to start turning them into a reality. The best way to begin saving is to create an automatic savings plan. If you have a set amount of money being set aside from each paycheck automatically, it is impossible to forget. And the best thing is, once the money is saved automatically, after a few paychecks, you won’t even miss the money, but it will always be there if you need it!
