Congratulations, it’s your first job out of college and you’re really excited! You’re finally an adult. You’re about to get your first paycheck and feel like your life is off to a good start! But wait, there’s a few more things on your list to check off. Here are seven steps to get started and get yourself on the right track.

Each of these could have a blog post on its own, but this guide is just intended to get you started and know how to think about the principles behind each of them. Ready? Let’s get started!

#1: Find a (smart) place to live

It’s generally your biggest expense by far and will really shape both your spending and daily life the most. Get it right, and “stay a student” for as long as you can. There’s this very real thing called “lifestyle creep” and the longer you prevent that from happening, the better off you will be.

Tip: Consider living with roommates. I personally roomed with grad students my first few years out of undergrad, which helped a lot.

Don’t spend too much time and money on your apartment’s decor, but don’t live like the Grouch!

Your commute to work from your home is something else to take into consideration. How long will it take you to get to work during commute hour? Can you walk or bike or take public transit instead of drive? This route will be the route you travel the most often (by far) — so give these options some solid consideration. You will be surprised at how much you save later on!

#2: Track your spending

Now you have some income to balance that spending. Now it’s time to make sure your paychecks stretch.

Tip: By monitoring your spending it will help your control your money and NOT allow your money to control you.

Don’t be that #adult! There are many ways to track your spending — maybe it’s your own Google spreadsheet or maybe it’s YouNeedABudget or maybe you like to go old school with pen and paper. There’s no right or wrong here, so find one that works for you!

#3: Read your employee benefits booklet and get health insurance

Your health is paramount, and it’s important to be covered. While you were probably on your parents’ plan or covered through your school previously, it’s important to make sure you’re still covered now that you’re working.

Tip: Your employer probably has options in that all-encompassing employee benefits booklet! So make sure to select the best one for you.

And please do read that employee benefits booklet. It’s worth it. Even if it’s long or confusing, your employee benefits guide is your tool to unlock all of the benefits your new employer will offer you. It will include tons of information on how much they will match your retirement plan contributions, what disability insurance coverage you have, your options for health insurance, and other fun perks and hidden benefits lurking just beneath the booklet’s front page.

#4: Set reasonable expectations with your (first) paycheck

You’re about to get your first #adult paycheck! Yay! Now you need to wait to see what your first paycheck will look like after taxes once the money hits your bank account.

Tip: The tax bite out of your first paycheck will likely be more than you anticipate, and you don’t want it to ruin the excitement of getting paid the first time!

Set reasonable expectations after taking out things like taxes and other deductions, such as your health insurance, retirement plan contribution, and much more. You can anticipate the money you will have available for rent, debt / credit card payments, groceries, and general day-to-day living like your occasional self-care treat.

#5: Start saving for retirement (aka Future You)

It doesn’t matter if you start small as long as you start. With your retirement contributions, the “out-of-sight, out-of-mind” principle operates because they will never hit your bank account. And the best is… you can watch them grow!

Tip: Hopefully, your employer offers a 401(k) with some additional options.

The government wants you to save for your retirement and they will incentivize you to contribute as early as possible. If your employer does or doesn’t offer anything, you can put your money into other accounts, like a Roth IRA. While you might have other money priorities (like paying off student loans or a car), it still pays to put something, anything towards “Future You” as a matter of principle and habit-building.

#6: Get a handle on your student loans

You went to school, and now have the loans to prove it. I feel you. The best way to approach these are to learn about them. What is the repayment structure like? When does the grace period (if any) end? What is the interest rate(s)? Are there any interest rate discounts for auto-repayment? Answering these questions will help you find the best plan for you.

Tip: Don’t be afraid to ask for help in deciphering your obligations. Get all of the information together to figure out who you owe, how much you have to pay, and when.

While there might be a grace period, it could be in your interest to pay more sooner rather than later (if you can).

#7: Build an emergency fund

Between saving for retirement, paying down student loans, buying groceries and paying rent — what else is there to do? Pay yourself!

Tip: While saving for retirement and “Future You” is great, building an emergency fund is that next step to take.

Without an emergency fund, you are completely susceptible to life’s whims and unexpected events. With even $1,000 in a (separate, hopefully high-yield) savings account, you’re much better off to pay for that last-minute necessary plane ticket or car “accident” when your neighbor backs into your car parked on the street.

If you have other obligations and you’re overwhelmed, just try to get to that first $1,000. Then you can build up from there to one month of living expenses, two months, until you feel comfortable. Any contribution towards $1,000 is the next best step because this will be the hardest, yet rewarding.

Doing these seven steps will set you well on the road to build your financial momentum! If you’re not sure where to start or just want to make sure you’re on the right track, don’t hesitate to schedule a free 15-minute intro call to see how I can help!

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I just landed my first job, now what? 7 next steps to set yourself up for financial success