Landing your first job can be exciting. Since you are earning your own money, you can be more independent. You can buy things you need and want by yourself, instead of having to rely on others.
However, you don't want to get carried away. It's easy to spend money when you have it but spending too much can lead to problems later in life. That's why it's important to learn how to manage your money at an early age.
One of the first steps towards saving is to start a checking account. Otherwise, where are you going to keep all your paychecks? It is important that you start a savings account as well. That way, you can set money aside for any big purchases or financial goals you'll need or want in the future. For example, these can include:
It also helps to have emergency funds set aside in a savings account. This will give you a safety net for any unexpected costs. To read more about this, see the "Emergency Fund" section below.
You can also consider applying for a credit card, along with having a debit card for your checking account. Having a credit card can help you build your credit score and credit history if you use it responsibly. Having a good credit score can be beneficial when you apply for a loan or mortgage later in life. However, be careful with how much you buy with credit cards. You don't want to get yourself into a pile of debt!
You'll come across plenty of "little" expenses in life, but those "little" expenses can add up fast. Did you know there are a lot of simple ways to save on these costs? Here are a few examples of good habits to get into:
Overall, if you're in doubt, ask yourself whether you really need or want to buy something before you do. Decide if it will be worth purchasing.
No matter what, something unexpected is probably going to happen at some point in your life. You may be faced with a steep medical bill, costly repairs on your car, or even job loss. That's why it's important to have a fund set aside to use when disaster strikes. You can keep this money in your savings account or start a new savings account just for emergency funds. When saving money, you should always have a way of keeping track of the money you put into your fund.
You should put at least 2-6 months' worth of living expenses in your fund, but it might be safer to keep 9 months' worth. After all, 9 months provides a good shield in case of job loss. This can be a lot of money to put aside right away, so start with a smaller amount and build it from there. You can even create a budget that specifies an amount to put away every pay day.
Now that you have learned more about money management, you can start using these skills to help you save money. Here are a few extra ways to develop good budgeting habits: