Receiving your first paycheck can be an exciting and empowering experience. It marks the beginning of your financial independence and signifies that you are taking control of your own finances. But with all the options available, it can be overwhelming to decide what to do with your hard-earned money. Here are some ideas for what to buy with your first paycheck to help you make the most of this milestone.
\"Adulting\" can be anything but glamorous, but one of the single most exciting parts of getting your first job is the feeling of receiving your first paycheck. Whether it goes into your savings account for safekeeping or straight towards your rent, that first taste of real, hard-earned cash money is absolutely glorious. However, if you're not entirely sure how to spend your money when you get it, here are five things to spend your first paycheck on. I know they say that money can't buy happiness, but I'll definitely admit that actually having an income feels pretty fantastic.
How you spend your first paycheck depends on your lifestyle and the goals you set. Even though I initially planned on spending my first paycheck on a giant mansion to house hundreds of dogs, I realized that's more of a long-term goal. Most people end up spending their first paycheck on food, something expensive, or maybe even a vacation. If you think about it, there are so many new opportunities when you actually have money coming into your bank account. I had the chance to speak with several hard-working adults about their first paychecks, and here's how they decided to spend their money.
For my first big-girl job, I was working for a communications company, and I really didn't like what I was doing, so I was especially looking forward to getting that first big paycheck, says Allie, 24. \"I went out and spent nearly all of that money on food so I could cook more at home, because cooking always always always makes me feel better about life, even when I low-key kind of hated my job.\"
Mary, 23, says, \"My first grown up paycheck was probably spent on a bill or something boring, but my first paycheck from my first job at age 15 was spent on a calzone at a pizza place down the street from my school because #priorities.\"
\"My first post-grad paycheck was for a Cosmopolitan article, and I wanted to use part of it to buy something stupid as a declaration of 'I AM AN ADULT WITH MY OWN MONEY AND CAN USE IT HOWEVER I WANT (as long as I'm under-budget for the month!!!!!!),'\" says Alexandra, 25. \"So I bought a cute bikini top on Nasty Gal. The top is so uncomfortable I only wore it a few times, but to this day I refuse to get rid of it, because it's a reminder of that first check.\"
\"I spent my first paycheck on first month's rent, and the rest went towards my apartment's security deposit. I know this doesn't necessarily SOUND exciting, but it actually was because I had started my first full time job in the same week I moved into my first apartment out of college,\" says Tor, 23. \"It was super rewarding to be able to pay for my new place with my new job, and without having to dip into my savings. Worked out perfectly!\"
Chelsea, 25, says, \"I spent my first paycheck on my student loans! I came out of college knowing that I wanted to pay off my debt within a few years, so even though I had two months left in my grace period, I decided to start paying on my loans as early as I could.\"
\"I spent my first paycheck on a monthly bus pass into New York City because I was commuting into work at the time.\" says Amanda, 26. \"Not the most exciting purchase, but it got me to where I needed to be every day!\"
Collette, 27, says, \"After a long string of temp jobs, my first steady paycheck came about 2 years after graduating college, and I immediately splurged on a new computer for myself. I took advantage of living rent-free with my parents at the time, and I decided to upgrade my MacBook I'd had all throughout college to a MacBook Air. The first credit card bill with my new computer on it was definitely higher than I was used to at the time, but it was a good introduction to learning about how to budget for items you really want/need.\"
\"The first paycheck I remember getting and spending totally for myself was when I worked for Wendy's when I was in high school,\" says Mitch, 23. \"I think my mom slyly put some away in a college fund and then I took the rest to buy a DVD that's probably still unopened somewhere... because Netflix just started streaming movies so I probably didn't need it anymore.\"
\"I spent my first paycheck on Fleetwood Mac tickets for myself, my mom and my best friend. That was my first 'big treat' to myself. The next paycheck I bought my Surf Green Fender Telecaster,\" says Caisy, 25. \"That thing is my baby and played a big part in me learning how I should expand my songwriting to different genres. Makes me feel like a badass on stage too.\"
Whether you spent your first paycheck to pay off some bills or on a spontaneous trip to Europe, the feeling of spending your own hard-earned money is always incredibly victorious. Just keep that age-old advice in mind, and \"don't spend it all in one place.\" Saving a little can go a long way.
Two weeks from now Jack will receive his first paycheck. Part of it will go towards the usual expenditure such as food, utilities, rent, and transportation, but he wants to spend the rest intelligently.
You might be tempted to treat yourself to something nice with your first paycheck. And you definitely should celebrate the success of landing your first job! That said, be smart to allocate your money in a way that pays you dividends in the long run.
Additionally, Social Security and Medicaid are withheld from your paycheck during every pay period. You'll see 6.2% withheld from your paycheck for Social Security, plus another 1.45% for Medicare. Your employer pays an equivalent share, for a total 15.3%.
\"You're just starting out,\" Boneparth said. \"The goal here is to build as strong a foundation for yourself as humanly possible. So the first thing I would recommend anyone do is understand their paycheck ... how much money you have coming in each month,\" and what you have going out.
Not only are taxes a rude awakening for a lot of people at their first job when they realize how much is taken out of their paycheck for taxes, but then you are also required to FILE your tax return in the first few months of the year.
Here's what you need to know: You have to file your tax return every year. If you owe the IRS and don't file or pay, you're racking up penalties and interest you'll have to reckon with at some point. They could even, eventually, garnish your paycheck.
If you are a salaried employee, where the company takes taxes out, you'll get a W2 form. If you are freelance or part time, you will either get a W2 or if the company doesn't take taxes out, a 1099 form. The downside of being 1099, as we've established, is that you have to manage your own taxes because your employer isn't withholding that money from your paychecks. But on the positive side, you can take more deductions, which will help you to either get a bigger return or, if you owe taxes, pay less.
There's an indescribable feeling that comes with the first \"big\" purchase you make when you get your very first paycheck. My first paycheck came from the Gap when I was 18. I didn't have the cash in my hands more than 30 minutes when I dropped it on a pair of $220 black, knee-high, Frye riding boots. Did I need riding boots No. Did I want them Hell yes. I still have them and wear them to this day.
There isn't just a sense of accomplishment that comes with the most expensive thing you buy with your first paycheck, but a sense of empowerment, too. You busted your butt, you maybe even worked late to get overtime, and, eventually, that thing you wanted so badly, that thing you deserved after all that work, was finally yours.
Last November, Mayor Adams announced he would accept his first three paychecks in cryptocurrency. Due to U.S. Department of Labor regulations, New York City cannot pay employees in cryptocurrency. By using a cryptocurrency exchange, anyone paid in U.S. dollars can have funds converted into cryptocurrency before funds are deposited into their account.
For example, with your first paycheck, you could pay for a weekend class to keep learning new skills. Or you could invest in a good suit to add to your workplace wardrobe, that could aid your career growth.
1. Be aware of your take-home payThere's a difference between your gross pay and your net pay, and by the time you get your first paycheck, you'll have learned the difference -- though possibly the hard way. Once you witness the gap between your gross pay and the amount you get to take home, you may be in for a tough reality check. That's why you need to learn how much of your paycheck goes toward taxes and benefits and decide whether you need to adjust your withholdings and/or your budget in order to cover your living expenses.
Note that the amount you're taxed on your paycheck isn't necessarily the amount you're obligated to pay. Depending on your circumstances and the number of allowances you claimed when you filled out your W-4, you may be getting overtaxed or undertaxed on your earnings. When you get your first paycheck, see how much is being withheld in federal, state, and local taxes. If the amount seems high, you have the option of checking your withholdings to make sure you didn't claim too few allowances or finding ways to lower your overall tax burden. You may, for example, consider allocating pre-tax dollars toward a medical flex spending account, commuting costs, or, if applicable, qualified child care fees. And you should definitely put money into a tax-advantaged retirement account like a 401(k) plan.
2. Find a way to ramp up your savingsLike it or not, you should be saving a percentage of your earnings from the moment you bank your first paycheck. Once you see how much money you're bringing in, calculate the amount you can afford to allocate to a savings account and set up an automatic withdrawal via your bank. Your initial savings priority should be funding your emergency account, which should hold enough to carry you for three to nine months without an income. At the same time, start putting money into a 401(k) plan, and if your employer offers matching dollars, save at least enough to get the full match; otherwise you're giving up free money. If your employer doesn't offer a 401(k), or if the 401(k) doesn't suit your needs, then you can opt for an individual retirement account (IRA) instead. 59ce067264