What should you do with your first salary?

Why does the first salary matter so much?

Because you have no habits yet. Whatever you do with the first few salaries becomes normal, and normal is hard to change later.

Starting to save 10% from the first payday costs nothing you will miss, since you never lived on the full amount. Starting two years later means cutting a lifestyle you are used to.

What is the first thing to do?

Check the amount. Your contract states a salary before tax, and what arrives is lower. Read the first payslip line by line: tax, social contributions, pension, anything else taken out.

Plan with the amount that reaches your account, not the one in the contract.

What comes out first?

Follow the same order every payday:

1. Giving, if you give: charity, or money sent to family.
2. Bills: rent, power, internet, phone, transport.
3. Goals: savings and debt, each with a share.
4. Living: what stays in your account until the next payday.

On a salary of 3,000 with 1,050 of bills, giving 5% is 150 and 1,800 is left to divide. The routine itself is described in what to do on payday.

How much should I save from a first salary?

Any fixed share is better than waiting for the right one. Ten percent is a good start, and 20% is the usual target once your bills are settled.

Make it automatic: a standing transfer on payday to a separate account. If you have to remember, some months you will not. How to judge your rate is in how much of your salary to save.

What should the first savings be for?

One month of your basic costs. That small cushion is what keeps a broken phone or a late salary from becoming a debt.

After that, build towards three months, and start on anything you owe. The steps are in how big your emergency fund should be.

Can I spend some of it on myself?

Yes, and you should. Buy one thing or share one meal that marks the moment. Decide the amount first and stay inside it.

The risk is not the celebration. It is the monthly commitments made in the first excitement: a bigger flat, a car payment, a phone contract, several subscriptions. Each one is small, and together they use up the salary before you have seen what life on it costs.

What mistakes are common in the first year?

• Raising your costs to match your pay in the first month.
• Buying on credit because the next salary is certain. It is, and so are its bills.
• Saving what is left at the end of the month. There is rarely anything left.
• Lending more than you can lose. A first salary attracts requests. Decide an amount you can give without needing it back.
• Not reading the payslip. Mistakes happen, and nobody else checks yours.

What if my family expects help?

In many families the first salary is partly theirs, and that is a good thing to plan for, not something to hide from your budget. Give it a line with a fixed amount or percentage, paid first on payday.

A known amount protects both sides. They can count on it, and you can still build your own savings.

What should it look like after three months?

• Every bill is paid on payday, without thinking.
• Savings leave automatically.
• You know your daily amount, and reach the next payday with something left.
• You have close to one month of costs set aside.

If the money runs out early instead, the usual reasons are in why your salary runs out. The complete setup, step by step, is in how to make your first budget.