All of those years of sleepless nights, studying, papers and what-not, have all come to an end. You are now a college graduate and on that alone, I congratulate you.
Most of you are going to be entering the workforce almost immediately and here are a few things that might be on your minds:
Where are you going to work? How much will you be paid?…… and so on….
Now that a lot of you are going to be financially independent, how are you going to have to learn how to manage your paychecks.
So here are the steps that you should follow even before you receive that very first paycheck:
1. the 401(K) account
This is just another creative word for your savings account which will make your future retirement, easy. Some companies are ran by wise individuals who know the importance of such an account and will even offer it to you if you do not already have one.
2. A 401(k) match
So, how much do you contribute? Well, it’s best to start with the minimum needed to get what’s called your company match. That’s free money that your company will give you … as long as you contribute a certain amount to your 401(k). Not all companies offer a match.
3. A Health Savings Account (HSA)
You will begin paying taxes since you are now a part of the working force and may just warn you beforehand, it is small.
Everyone has an activity in which they escape. Invest in it.
Set Up Checking and Savings Accounts
Set up a checking and savings account, and if you already have such accounts, reassess whether they are still a good fit for you. For both accounts, you’ll get the best interest rates if you open online accounts.
The balance goes savings/charity
Now, as for what’s leftover in your checking account, you need to live on that. In the next story, we’ll go over how you should budget — how to decide how much your rent or mortgage should be, the amount you should pay toward student loans and what to put toward all of the above accounts. And, you’ll learn how much fun spending can be to you each month.