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As you near graduation, you're probably gearing up for some life changes. This is probably your first time entering into the working world as a long-term employee and it's time to prepare for the financial transition. So while you have dollar signs dancing in your head and you're dreaming of what to do with your first paycheck, here's a few ideas to get you on the right path.

Start an emergency fund

Your first step when earning a regular salary should be to start an emergency fund. According to financial experts, it’s best to have 3-6 months’ worth of living expenses tucked away in case you are unable to work for any reason. Otherwise, an expensive emergency or surprise layoff can force you into debt that can take years to recover from. When working out a budget, set up a plan for building your emergency fund in as short a time as possible. Once it’s fully funded, you can use that money for other savings.

Open a savings account

If you haven’t already done so, open a savings account at OE Federal Credit Union and start putting away a small amount of money each month. There are several ideas regarding how much of your monthly income to devote to savings. However, most experts recommend that you set aside 20 percent of your paycheck. If you can’t afford to do that right now, especially as you work on building your emergency fund, it’s still crucial to put away as much as you can, simply to build the savings habit. You can use these savings for long-term goals, like buying a house or a new car within the next few years, and short-term goals, like a summertime getaway or a large purchase, like a new entertainment system.

Start saving for your retirement

Your retirement might still be light-years away, but the sooner you start planning for it, the less you’ll have to put away each month. Plus, you’ll have a bigger nest egg when you stop working.

First, speak to an HR representative at your workplace to ask about their retirement offerings including pension or 410(k). Many companies will match your contributions up to a set amount. Find out what your company will match and try to make that your minimum contribution amount so you’re not missing out on free money.

If your company doesn’t offer a pension or 401(k) plan, you can also look into opening an IRA on your own.

Make a payment toward your student loan

Before you can claim the rest of your money as your own, you’ll need to make at least the minimum monthly payment on your student loan. If you haven’t started your job immediately after college, you may have already made the first few payments toward your student loan debt. But, whether this is your first payment or not, it’s best to maximize the amount you pay toward debt each month. Keep in mind that student loan companies, like credit card companies, are out to make money. The simplest way for them to do that is to keep you in debt for as long as possible by making it easy to pay only the minimum monthly payment. Beat the system by increasing your payments to the maximum amount you can handle.

Budget wisely

Now that you’ve gotten all of the boring stuff out of the way, you’re free to spend your money as you please. Establish responsible spending habits by setting up a workable budget that incorporates all of your fixed expenses and your non-fixed expenses. With careful planning and an eye toward the future, you can enjoy your new status as a responsible, working adult.


Need help getting started on a budget? Download our Budget Worksheet or watch our YouTube video “How to Build a Budget in 6 Simple Steps.”