Getting your first pay-check kind of a big deal! Feels like an occasion of its own. It marks the start of your career and first step into adulthood – something I’m less excited about! Friends and family told me how I should enjoy my first pay-check since it hits differently to all the rest of them. So, I relished that feeling and enjoyed the sweetness of getting paid for my first job. Fresh outa uni. And thinking how lucky I am that my company took a chance on me!
Okay, so you’ve got paid (the best bit) but now what?
There are 3 things you could do with your pay-check: you could spend it (what most do), save it (what some do) or invest it (what few do). Spending is the easy-peasy one. You suddenly find yourself with all this money sloshing around. It can feel a little overwhelming? Exciting? There are a few emotions running around so unless you control yourself and plan ahead, you can easily fall into the trap of spending your month’s salary or worse, spending next month’s today! You’ve found yourself with all this money freedom, the freedom to spend how you wish and having the freedom to do as you please with your money so unless you put some limitations on, it can be kinda dangerous.
You pay your bills, buy a couple things, go out for drinks, dinner or whatever and suddenly you’ve burnt a big fat hole in your pay-check. When I got paid I knew I could now easily afford a whole bunch of stuff from swanky and very-much-overpriced wireless headphones (don’t worry, I didn’t pull the trigger) to cool shoes, jackets and all the rest of it. That’s pretty much an insight into what I wanna spend my money on!
Unless I made a conscious effort to say No, stash some of it far away from my current account, I could have easily spent it. The trap is real so be sure to set some boundaries yourself but most of all, make sure you leave some money at the end to enjoy yourself. That’s just as important!
Don’t spend more as you earn more
The more you earn, the more you can spend. And unless you make a conscious effort to keep your spending relatively stable, you’ll find yourself back to square one, plus some swanky stuff. Obviously this year is slightly different what with rising energy costs and mortgage rates not to mention inflation everywhere (apart from TV and toys. Anyone??) it’s impossible not to keep your spending under wraps but you can’t really control that. So the areas that are still within your control – like how much you spend on extras – you should be controlling.
How you spend your money each month will determine the size of your investment account. The more you spend, the less you’ll have to invest. And the cheaper your future will be. You’d much rather sacrifice things now than later on! You don’t want to be in your 40s and still be thinking whether or not you can take that vacation or whatever. I see many people like that and it’s so sad. You work hard all your lives, at least you should get to splash out here and there. Without having to blink and worry whether or not you’d be able to afford that month’s rent.
Your younger years set the foundation for what’s to come. Your responsibility is to make sure it’s rock solid. You won’t necessarily see the rewards here and now, but down the line you certainly will. And you’ll be glad you have shovelled all that money away. Fancy clothes and jewellery give instant pleasure. Financial freedom is something sweeter. And it lasts longer. Hopefully! Wouldn’t you rather the luxury of being able to go on a cruise in your mid-life or buy a stupidly overpriced pair of trainers or whatever. Money compounds but so do habits. Be careful which muscle you’re building.
So, with my first pay-check (still feels weird to say that) here are 3 things I did right away to make sure my future self would be proud of me! The spending part included!
#1 I funded my ISA (aka my future deposit)
You’ve gotta pay yourself first. If you don’t, who else will? So I paid myself (more like my future self) first.
My ISA is where I’m investing for my deposit so this one couldn’t wait! I took a whopper chunk of my month’s earning and put it straight in. Yup, there’s market turmoil right now but September has also historically been a pretty rubbish month for stocks (read here why that is plus how you can take advantage) so it looks like a good time to start pound-cost averaging with my earnings.
Sure, markets will most likely trend down further but I’ve got at least a decade till I plan to buy my house by which point I hope markets will be in better shape! Pound-cost averaging removes so much of the anxiety and stress. It’s what allows me to sleep at night since it doesn’t get me working too much about what’s going on in markets. I just make sure I keep topping up my account on a consistent basis and then leaving it alone. Not panic-selling or whatnot.
#2 Getting my emergency fund off the ground
We all need an emergency fund – this should be (at the very least) 3-6 months’ of your salary to protect you and your finances against the worst. Should you lose your job, for ex, you’d have the financial cushion to be able to find another one and still be able to pay your bills!
This fund ain’t glam but it’s so important. Think of it as your insurance for financial surprises. The nasty sort. The bigger your fund, the more wiggle room you’ll have when things go wrong. Of course we think this stuff won’t ever happen to us but we’re in a recession that’s bound to get ugly and you don’t know what lies round the bend. Be prepared. It’s the best thing for your sanity and overall wellbeing.
So, after investing, I made sure to plug in some money to my emergency account which is kept in a separate account from my everyday spending one to make sure I didn’t accidentally dip into it when I shouldn’t be.
#3 I treated myself!
What’s the point of working hard if you don’t even get to enjoy the fruits of labour every once in a while. Saving and investing will be 10x harder if you don’t see at least some of the money being spent on yourself. Plus, mindful spending gives us pleasure and should most definitely be done. It also gives us motivation to invest and save more so that we get to enjoy more of that late down the line.
So, what did I buy you ask? I bought a pair of shoes! I’ve had my eye on them for a while and I thought now’s the perfect time to bag them. I was tempted to buy some sweaters from Zara but that site is dangerous! You look at one sweater and suddenly your basket is filled with 5. That’s for the spending of another month.
I’ve also made sure to leave some money in my account for things like socialising. Aka to make sure I won’t be broke when on a night out. And to make sure my month’s money will bring me some joy throughout the month!
So there you have it. The story of my first pay-check.
I’d love to hear how it felt earning yours and what was the first thing you spent it on!
Disclaimer: This blog is not investment or financial advice. It is my opinion only. This blog is not a personal recommendation to buy/sell any security, or to adopt any such investment strategy. Always do your own research before you commit to any investment.
Knead Your Dough 
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