All about the Benjamins


You've landed your dream job - or close to it, anyway. What's next? Likely you have big plans for that salary you'll be getting in exchange for a job well done. Unfortunately, depending on how much you're being paid, by the time everyone takes their part of your paycheck, you might feel like there's nothing left for you. Fortunately, by creating a budget and living within your means, you should be able to save for the future - and enjoy today - regardless of the size of your paycheck.


That's right, other people get a cut.
At the risk of getting a little too basic, the salary you agree upon when you accept a job is the gross - or pre-tax - amount. This means that before your check even makes it to you, federal, state and possibly even city taxes (depending on where you work) will be deducted, as will your contribution for Social Security and unemployment. The amount left over is the net - that's yours. If your company offers health insurance, your contribution will be deducted automatically from your paycheck before it reaches you. The same goes if you've elected to participate in your company's retirement program.


Build your budget to build your savings.
One of the most important keys to financial security is spending less than you earn. Having a savings account to fall back on in the event of an emergency is another. Both of these can be achieved by creating - and sticking to - a budget. If you have a home computer, you may want to invest in a program like Quicken to create your budget. If not, websites like The Motley Fool ( offer free, downloadable templates you can use to build your budget (visit their Personal Finance section for tips). And for those who prefer pen and paper, no worries - that works too.


When putting together your budget, work from your net pay and be honest. Start with your highest priorities - savings, living expenses, commuting expenses (after all, you have to get to work), outstanding debt - and go from there. By identifying your most important expenses first, you'll be able to easily see how much you have left over for “extras.”


Live on the cheap.
Once you've created your budget and know how much money you have available to spend, start spending less! Determine which extravagances you really can't live without, and cut the ones you can. Try making your coffee at home for your daily commute instead of picking it up. Bring a bag lunch rather than buying each day - or at least cut back to buying lunch just one day per week. You may be surprised how quickly the savings adds up.


If you're still having trouble staying within your budget, try this simple tip: if you don't have the money for something, don't buy it. It's amazing how much cash you can save once you accept that there are some things you just can't afford.


Pay yourself first.
Regardless of how much you're earning, be sure to build savings into your budget. If you make it a priority, you should be able to save even a small amount from each paycheck. Even if you have debt, saving for a “rainy day” is vital for your overall financial health. You should have at least three to six months in living expenses (preferably more) in a savings account where you can access the cash quickly in the event of an emergency - including job loss. This will help you avoid early withdrawal from a retirement count or cashing in CDs or other savings before they have fully matured.


Consider authorizing an automatic withdrawal from your paycheck - most banks can arrange this for you. This is a great way to save as a) it ensures you will save, and b) if you don't see that money, you'll get used to not having it and be less likely to miss it. Remember, every dollar counts, so even if you're only able to save a small amount with each paycheck, keep at it - it adds up.


Have a long-term savings plan.
When you're taking your first steps down your career path, saving for retirement is sometimes the furthest thing from your mind. However, financial experts agree that, no matter how new you are to the workforce, you should always be planning for the future. The most common retirement plans are the 401(k) and the Individual Retirement Arrangement (IRA).


Pay down your debt.
One of the best ways to prepare for the future is by eliminating your debt today. If you typically carry a high balance on one or more high-interest credit cards, that's the place to start. Consider transferring your balances to a card with a lower interest rate, and then commit to paying it off as quickly as possible. While making at least the minimum payment on your credit card each month is crucial to building to maintaining a solid credit rating, carrying a large balance isn't. Remember, the longer you carry that balance - even at a lower interest rate - the more that borrowed money will cost you.


Don't just save for your future, protect it.
Most companies provide an employee healthcare plan, but not all. If your company does offer health insurance, consider enrolling. This is typically less expensive than purchasing your own individual plan, since in employer-sponsored programs workers and businesses share the expense rather than the employee bearing the brunt of it on their own.


  • Know your options.
    If your company doesn't provide health insurance, purchasing your own healthcare should be a top priority. Everyone should have health insurance - regardless of age. However, how much coverage you need may depend on your age and health risks. Again, this is where research is crucial - find out what types of insurance plans are available, what type of coverage you need (consider checking with your doctor on this) and what you can afford.

  • Prepare for the unexpected.
    In addition to health insurance, you should also consider enrolling in your company's life and/or disability insurance plans - or purchasing your own plans if your employer doesn't offer them. If you're young and have no dependants, you can probably hold off on the life insurance for now (consider asking a lawyer just to be on the safe side), but disability insurance is important at any age. Buying disability insurance when you're young is especially beneficial, as studies show that 3 in 10 Americans are likely to become disabled in their lifetime, and since disability insurance becomes more expensive as you age - and certain conditions may preclude you from obtaining coverage - getting insurance early is your best bet.

How you spend today could affect tomorrow.
No matter the size your paycheck, knowing exactly how much money you have available and how much you're saving will help you prepare for the future without missing out on today. And remember, if the word “budget” strikes fear in your heart, just call it a “spending plan” - or anything else you want - so long as you have one.


Interested in more simple, yet effective tips for succeeding in today's working world? Contact your local Adecco representative today!