What to do with your first paycheck
Graduating from college is a major milestone in one’s life. If you recently graduated, a big congratulations to you! We’re sure you’re eager to enter the workforce, start earning your own money, and give back to your family.
We’re here to give you some tips and reminders for what to do with that coveted first paycheck!
Tackle debt. Finding your first job is a journey that can take weeks or even months. Once you finally land that job, the experience of having your own money for the first time can be exhilarating. You are faced with the temptation to treat yourself, go on trips you’ve always dreamed of, and eat out.
While there is nothing wrong with purchasing items for yourself, you need to learn how to live within your means. This entails only purchasing items you can afford. If you’re using a credit card, make sure you pay for the bills right away so as not to incur any interest and late fees.
Build an emergency fund. If there’s anything this pandemic has taught us, it’s that job security isn’t as secure as we once thought. You can have a job one day and lose it the next. This is why having an emergency fund is so important.
An emergency fund will protect you from other unexpected situations like a hospitalization, emergency home repairs, and car breakdowns
While it is recommended to have around three to six months’ worth of living expenses saved up in your emergency fund, a little more goes a long way. Adding even P2,000 each month to your emergency fund will give you an extra P48,000 at the end of the year. This is still P48,000 less that you would need to borrow from your relatives or use on your credit card during tough times.
Start investing. Investing may be far from many fresh graduates’ minds but the best time to invest is when you are young. Many different types of investment products don’t cost an arm and a leg, such as Unit Investment Trust Funds (UITFs) that allow investors to invest in money market, bonds, and equities for as low as PHP1,000. Learn more about Metrobank’s UITFs here.
While you may be tempted to spend your entire first paycheck to treat yourself, it may be better spent on something your future self will thank you for. But this doesn’t mean depriving yourself completely of a reward. You should definitely celebrate the success of having a first job. You just need to be smart about your expenses and allocating your first paycheck.
Grow your savings meaningfully with Metrobank so you can achieve your financial goals. Open a Metrobank Savings Account today.
