I Got My First Paycheck! Now What?

Tyler Philbrook
Tyler Philbrook

I wish I knew how much my very first check was.

I was 17, had started working as a service clerk at a Walgreens part time, and I was very excited to get paid.

But now, nearly 15 years later, I have no idea how much the check was, or even worse what I spent it on.

Knowing me, I probably spent it on food, not groceries, probably takeout Chinese or pizza, while at work for the next few weeks.

Maybe you’re thinking about your first paycheck that happened years ago, or you just got your first paycheck and wonder what you should do with it.

There are an endless amount of options, some fun, but you’ll likely not remember what you spent it on, some not fun at all, and what we feel is the best option.

Spend It All

This first option is of course the most fun thing you can do with your first paycheck. Spend it.

It will be fun, think of all the clothes you can get, the new shoes, new smart watch, or even new phone. Your own laptop, or those new games you’ve been wanting.

Maybe it’s going to a restaurant, movie, or theme park without having to ask your parents for money to go.

Whatever it is, spending money is without a doubt a lot more fun than making money, and you should relax and enjoy yourself after earning your first paycheck.

Save It All

Most people will get their first job when they don’t need the money. Typically it’s something that a kid wants and the parents tell them they have to earn their own money for it.

My wife was not allowed to get her license until she had a job that she could afford to pay for the insurance. My first job was because I wanted to go to my cousin’s wedding and needed the money for the trip.

When you get your first job, and then your first paycheck, if you have no bills you can save all the money.

You will need it later, and if you start saving at a young age it will set you up for life. First, you’ll always have a saving mentality, striving to save as much as possible at all times.

Second, you will start your adult life with a nest egg, rather than having to try to grow one while dealing with all the other stress and anxiety of life.

This can be the least fun now, but in the future you’ll be the one having fun. Investing money early in your life will mean that the rest of your life you’ll have emergency money, you won’t be in debt, you’ll have “walk away money”, and your life will be far less stressful.

Balanced Approach

Spending all of your first paycheck seems like a frivolous thing to do, but saving it all seems like a life with no fun and only work.

Which is why you should be balanced.

Decide how much you want to save, and don’t base it on how much your first paycheck is for, instead decide on percentages.

Some jobs will allow you to set up two deposits, one directly to your checking and one to your savings account, and they will just put whatever percentage you tell them to put in.

If you need none of the money, but you want to spend money without worrying when you run out, then set up two accounts and only spend from your checking. Once money hits your savings account, treat it like it’s untouchable.

Better yet, start an investment account and start putting money in index funds, or dividend investing.

Whatever is in your checking, spend on whatever you want, food, clothes, toys, games, anything your heart desires. But only touch the savings if it’s for the goal you were planning on using it for, such as buying a car, down payment on a house, getting into college, whatever it is only spend that savings money on what’s it’s for.

Conclusion

Getting your very first paycheck is one of the most exciting things you’ll experience, but don’t be like me and don’t remember what you spent that money on.

Take the time to evaluate what’s important to you, not just right now but in the future.

What do you want a month, year, or decade from now.

Make sure you enjoy what you’ve earned, splurge on a few things like going out to eat, getting new clothes, or going to the movies. At the same time save as much as possible, when you’re young and have no expenses is the only time you’ll be able to save such a high percentage of your income, which will be a huge deal in 10 years when life really hits you.