5 Essential Things to Do With
Your First Paycheck
Congratulations! You have just completed your first month at work and received the very first paycheck in your career.

But wait! Before you rush to celebrate and splurge on this milestone, we have some guidelines on what you should use your first paycheck for. You might not think it's important now, but your future self will be sure to thank you for having an action plan!
1
Save, save, save!
Remember the saying "save up for a rainy day" being told to you over the years as you grew up?
Well, there is truth to the saying. You never know when you might face an emergency in life, and how careful financial planning can help to build up savings to help you pull through tough times. Just like how the Covid-19 pandemic appeared unpredictably and placed many livelihoods at risk, there may be other unexpected crises that may arise in the future.

A good rule of thumb would be to open a separate savings account and transfer at least 20% of your monthly income to that account, which would allow you to beef up your emergency funds in time to come.
2
Get covered with bite-sized insurance policy
One of the most vital components of successful financial planning would be getting yourself covered with the right insurance plans.
We get it, you just started your first job, and don't want to commit to a hefty premium every month. However, in recent years, "bite-sized" premiums have been introduced to make buying insurance a part of your everyday lifestyle!

One option is SNACK by NTUC Income. SNACK is a mobile application that allows you to build up your insurance coverage progressively through small payments as you go about your daily life. Through the app, you can link the purchase of bite-sized NTUC Income insurance policies to your daily lifestyle activities such as taking the MRT, buying groceries, or even having lunch.

This would enable you to contribute to your insurance coverage from as low as $0.30, whenever you pay using your selected payment mode for your lifestyle activity.


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3
Budgeting is key
Apart from allocating 20% of your income savings, the remaining 80% should be split into 50% for expenses, and 30% for discretionary spending. This is the 50-30-20 rule.
Expenses would include things such as food, transport, living necessities, phone bills, rent. It is crucial to exercise prudence and keep track of your different expenses, both fixed and variable, by creating and sticking by a budget.

Being aware of what your money is spent on per month would allow you to reduce unnecessary expenditure where possible (eg. a cup of Starbucks coffee daily), and prevent your hard-earned salary from rapidly diminishing.
4
Set aside sufficient funds for outstanding debt
Debts should always be cleared as soon as possible. Examples of debt you could have racked up as a young adult are study loans or credit card debt.
These debts are essentially you borrowing money from banks, which means they come with steep interest rates which will snowball over time and chip away at your precious salary. To prevent yourself from facing such financial mishaps, proper financial planning is key to ensure that the monthly repayments required for your different debts should be calculated and sufficiently set aside. This would lower the risks of defaulting on your debt payments and being charged with additional interest.

If personal financial planning isn't your cup of tea, you may also engage the help of a professional financial planner to assist you in charting out your finances!
5
Last but not least – Reward yourself!
Apart from all the financial planning and budgeting that is essential towards achieving financial stability, don't forget that part of the 30% can be spent on yourself!
Treat yourself to a good meal or get that item you have been eyeing for a long time to reward yourself after your first month of hard work.

Just remember to spend wisely and not over splurge on everything that you desire!
Try out SNACK by NTUC Income today!
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