Make These Money Moves When Getting Your First Job

Getting your first job is a huge accomplishment, and with your steady new paycheck comes both financial responsibility and opportunity. Prepare for your fiscal future with Dominion Energy Credit Union's helpful tips on how to manage a budget after starting a new job, while learning to spend wisely and save for your future. 

Get "free money" on your first day at work

When starting a new job, be sure to take advantage of any company-sponsored retirement accounts as soon as you can. The most common retirement accounts are 401(k)s and IRAs. Most employers offer retirement accounts for full-time employees and match a portion of employee contributions. This employer-match is essentially “free money” for your future.

If your company offers either of these accounts, make sure to contribute at least the percentage that your company matches. If you’ve ever wondered how much money you need to retire to become a millionaire, the secret is to start saving early. Now that you have your first job, you can start adding to your fund immediately. If you are unsure of the amount to add to your fund, start by following these two simple rules. 

• The “multiply by 25” rule: This rule estimates how much money you will need in your retirement account to afford 25 years in retirement.
• The 4% rule: This estimates how much money you can safely withdraw from your nest egg per year once you reach standard retirement age. Log into your Dominion Energy Credit Union account and use our retirement calculator to understand what you'll need to save to have enough money to live off of when you reach your retirement age. 

Make and manage a budget 

Budgeting can be challenging, especially if you’ve never budgeted before. An easy way to begin is to think of what you might want to spend your money on, what you must pay for, and what you want to work toward.

Start by listing out your monthly financial obligations: car payments, groceries, phone bills, etc., then outline what you may need to save up for, like a new car, clothes or an apartment. Note how much money you take in per month and outline any student loans, car loans or other debt you’ll need to pay back. In addition to Dominion Energy Credit Union’s mobile banking, which helps you stay on top of your money, there are plenty of apps that make budgeting easy on the go.

The math is very simple: add up all your monthly expenses and subtract them from what you bring in per month. The difference represents the amount you can put toward savings or debt repayment. Anything left over can be considered disposable. This method ensures all your important savings priorities are being met but also gives you the flexibility to reward yourself every month.

To better prepare yourself financially for this stage of your life, research how to save for your first apartment, learn the difference between buying or leasing a car, and find out how much you can afford to spend on a house.

Build an emergency savings fund

One of your first savings goals should be to establish an emergency fund. This savings account will offer you peace of mind and help protect you down the road if you ever run into a financial circumstance that requires 3-6 months of your living expenses. Nobody wants to think about saving for an emergency, but life happens and it’s important to be financially prepared. Use one of our savings calculators to get a sense of how much you should allocate from each paycheck to help you create a savings plan. 

Pay yourself first 

To make it easier and less time consuming to build an emergency savings fund, you can set up direct deposit/ payroll deduction to split your paycheck between your checking and savings accounts. You can also set up an automatic transfer from your checking account to your savings account each week or month with online and mobile banking.

Getting your first job is exciting and the best part is often getting your first paycheck. Once you have that steady paycheck safely in your Dominion Energy Credit Union account, it’s in your own best interest to learn how to save for big purchases while balancing monthly expenses and retirement planning. Plus, with a smart savings plan in place, you’ll know when you have enough to splurge.

Dominion Energy Credit Union offers members competitive rates on savings accounts, money market accounts, and certificates to help you make the most of your money. Stop by one of our branch locations or visit our membership to join.