Getting a full-time job for the first time is a huge milestone. It can be the beginning of a long and successful career. However, managing a salary for the first time can be a new challenge, and not everyone knows how to go about budgeting. Here are some tips to help employees make the most of their first salary.


A solid budget makes a strong foundation for significant changes in a person’s financial life. It may take a month or two for an employee to determine their monthly take-home pay, as benefits and taxes affect that amount, and those items may not all be represented correctly in the first few paychecks.

Once an employee knows how much they’re taking home each month, it’s time to compare income and expenses. Come up with a rough budget. People who have experience with a basic budget template may decide to upgrade to a more detailed version once they start receiving a salary, especially if they plan on working toward several goals. The new paycheck may also free up space to spend more on necessities—perhaps on a larger apartment, a new car, or an upgraded gym membership.

Planning for the future

A first full-time job can provide the stability people need to begin preparing for retirement and saving for other financial goals. Many employers offer salaried employees the opportunity to contribute to a 401(k) (or other type of retirement plan), and they may even match all or part of the contribution. 401(k)s can make it relatively easy to save for the future, especially for people early in their careers.

Employees will also want to prepare for the future in other ways. For example, they may build up savings, pay off high-interest debt, or work toward buying a first home. Individuals may want to consider purchasing a life insurance policy like whole life insurance to protect their future insurability or start planning for a future with dependents, like a partner or kids.

Building emergency savings

An emergency fund can provide vital financial security so problems don’t become catastrophes. The right amount to save differs depending on the person’s financial situation. Regardless of the number, there are a few ways to make saving easier. For example, splitting a direct deposit between checking and savings accounts can automate savings. Plus, many savings accounts accumulate interest over time, helping grow an emergency fund more quickly.

Embrace the occasional splurge

It’s okay to splurge sometimes. In fact, an effective budget should include not only needs but also discretionary spending—and securing a full-time job for the first time calls for a reward. It can be an opportunity to buy a new video game, get a designer bag, book a weekend getaway, or try a trendy new restaurant.

The bottom line

With a thoughtful budget, a new salary can make it possible to plan for the future and enjoy the present. Even as an employee progresses through their career, getting promoted and earning a larger salary along the way, they can still make the most of their income using these steps.

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company (NM) and its subsidiaries in Milwaukee, WI.

Source: Northwestern Mutual