5 moves to make with your first paycheck
Whether you’re launching your career as a student or a fresh graduate, this marks an exciting chapter in your life. You may have faced some challenges finding a job, but finally, you’ve landed one. Now, your first month is up. You know what that means, don’t you?
It means payday has arrived!
But before you spend your salary on a new wardrobe or a new watch, remember that what you choose to do with your first paycheck will have a lasting impact on your financial future.
To help you make smarter choices, here are 5 moves to make with your first paycheck to establish and maintain your financial well-being.
- Start a budget
Starting a budget is important because it will help you understand your different expenses and track your day-to-day spending.
In addition, creating a budget will allow you to see exactly where your monthly salary is going and identify areas where you can cut back.
And sticking to your budget will help you save for long-term goals, such as buying a car or launching your own startup.
Basically, we’re saying this step is too important to skip!
2. Open a savings account
If you don’t already have one, open a savings account and put a small amount of money into it each month.
We recommend you deduct 20% of your salary for savings at the start of the month and then spend the remaining 80% as you need/wish.
If you can’t afford to put away 20%, that’s alright! But make sure to set aside as much as possible to develop the habit of saving.
Also, to better organise your finances and track your expenses, why not create savings goals on our mobile banking app?
You can create multiple saving goals under your Bank al Etihad account and have each one represent a category, such as ‘Vacation’ or ‘Car down payment.’
Another reason to create saving goals is that you can round up your purchases to the nearest JOD and transfer the change to your saving goal.
For example, if you pay 3.50 JOD with your card, 0.50 will be transferred to your saving goal. The amount may seem little now, but it adds up over time and will help you reach your goal faster. You can even accelerate reaching your saving goal by multiplying your round-up by up to 10 times!
3. Start an emergency fund
Starting an emergency fund is crucial because, in the real world, surprises happen.
So, try to set aside 3 to 6 months’ worth of living expenses. This way, you will have a reasonable reserve of cash to fall back on without going into debt if you need to cover the cost of a medical emergency or repair your phone, for example.
4. Start investing
You may be thinking you’re too young to start investing. Think again!
The name of the game with investments is time, and the more of it you have and the earlier you start, the bigger your returns could be.
One investment strategy to consider, especially if you’re just starting out, is the automatic investment plan we offer through EtihadSaver!
EtihadSaver is an investment plan that allows you to invest a recurring monthly amount in your choice of mutual funds. Once you agree on your monthly investment amount and destination funds with one of our Wealth Management advisors, a standing order will be set up authorising the bank to deduct that amount from your personal account the first week of every month.
Interested? Click here.
5. Treat yourself
Landing your first job is a big deal. That’s why you have to celebrate.
How you choose to celebrate is up to you. But we can certainly give you some ideas. One of our team members celebrated by taking his parents out to dinner. It was a big moment — for the first time, mum and dad didn’t have to pull out their wallets!
Another team member celebrated by purchasing a gold necklace, which she saw as a reward for her hard work and an item she could sell for a profit in the future.
We hope you found this article informative and will make these 5 moves when you receive your first paycheck. Consistently doing these things will help you maintain your financial health well into the future.
