So, you just got your first job, and it’s time to get your very first paycheck! But how do you smartly budget and save that first paycheck? Budgeting can be hard for a teen, so starting early will build smart habits and set you up for life long financial success. These tips will help you navigate this major milestone.
- Think before you buy
Buying things just because they are trendy or cheap isn’t always the way to go. Ask yourself questions such as: Do I have something similar? Will I wear or use this in 6 months? Will it make a certain task in my life easier? You may find yourself walking away from frivolously spending money.
- Create a separate savings account
Creating a savings account allows you to separate your spending money, such as money for bills or shopping, and your money you want to save, such as your emergency fund. Having a separate account allows you to put money in and have an out-of-sight, out-of-mind mentality, lessening the urge to spend that money.
- Use the 50-30-20 rule to save
50% of your paycheck should go towards things like your phone bill, gas, or things for school. 30% of your paycheck can go towards spending money for entertainment, hobbies, and memberships such as a gym one. Put the other 20% of your money into a separate savings account to put it out-of-sight, out-of-mind.
- Track where your money goes
Use a notebook, paper template, or digital template to track where you spend your money to see if you are budgeting your money to its fullest. You may find that you are buying things you truly don’t need just because the money is there. In that case you may find that it would be best for you to adjust the 50-30-20 rule. A way you may find it easy to adjust is to a 50-25-25 or maybe you have a lot of money left over in your necessities budget. You may also want to adjust to a 40-30-30.
- Sell things you no longer use
Selling things you no longer use can benefit you in many ways. Selling these things can be quick, easy cash, and it allows you to clear clutter. Many people use Poshmark to sell gently used clothes they no longer wear. If you do choose to sell online, it’s always important to make sure your parent or guardian knows in order to ensure it’s done safely.
- Look for student discounts
A lot of gyms offer free or discounted memberships to students who show an active student ID. Many restaurants offer percentage discounts or coupons to students, and even many movie theaters offer student ticket prices on certain showings too.
- Unsubscribe from unnecessary subscriptions
Many people pay for things like snap chat plus or spotify premium because all their friends have it, but in reality it is just another expense you can live without. Subscriptions on apps that are usable without paying are just eating away at money that could have been used for savings.
