You’re fresh out of college and you just got hired for a new job. Or maybe you were in-between jobs, and you thankfully got a different position at a new company so you’re having a fresh start in your career.
You have yet to receive your first salary but you have to pay for transportation or car and food expenses during your first couple of weeks at work. How will you survive financially? And if you’re a new employee, what are the best money-saving tips that you should keep in mind? That is what we will find more about here.
No Paycheck Yet? How to Survive Your First Month at Work
If you’re a new employee and you have yet to receive your first paycheck, the first couple of weeks will be crucial especially if you don’t have money saved up for such an event.
The number one thing that you need to remember is that applying for a payday loan is a huge no-no. You don’t want to start off your first month at this new job in debt. What’s even worse is that if you fail to pay the full amount of your payday loan on the due date, its interest rate will crop up.
What’s the next thing that you need to do? Take a look at your daily expenses and create a budget. Let’s say that there are two weeks to go before you can receive your first paycheck. What are the expenses that you have to pay for before then?
Make a list of your daily transportation expenses or the amount of gas money that you need. Skip the fancy coffee and stick to brown bagging your lunch so that you can save money. You can splurge on these later on once you’ve already received your first salary.
If you’re really short on funds, consider borrowing from family or friends. Tell them that you will receive your salary soon – so keep your budget tight until then.
Again, don’t resort to using your credit card or applying for payday or other types of short-term loans because the interest rates for these are quite high. You don’t want to start your new job on a sour note when you’re in debt, so look for better short-term fund sources.
From the Employer’s Perspective: Helping Employees Survive Their First Month at Work
If you’re part of the management team, how can you help new hires survive their first month at work? Human Resource experts say that the first 90 days are crucial because this is when they will decide if the job and the organization is a right fit for them or not. Unfortunately, turnover rate is 30% during the first three months.
The cost of replacing a new employee is 1 ½ times the cost of any new hire because you have to recruit and hire a replacement without any work getting done.
This means that if you will exert the effort to making the new hire satisfied with his or her job position, you would be saving a lot of time and money, not to mention really get the work done. Here are a few short tips on how you can help employees survive their first month at work:
- Prepare an orientation checklist for the new hire.
- Inform the rest of the office that a new employee is starting.
- Make sure that the HR department orients the new hire about the proper payroll procedures.
- Provide a suitable workstation for the new hire.
- See to it that there is workplace integration by using the buddy system.
- The buddy should be someone who has impeccable work ethic so the new hire won’t pick up bad habits or completely slack off.
- After the first month, have the buddy and the immediate supervisor check on the progress of the new hire. Is he or she meeting expectations? If not, is there a better position available or is the new hire not a good fit for the company at all? For the latter scenario, remember that it is better to sever all ties during the first 90 days. This way, you can avoid any extra costs and legal liabilities.
The 10 Best Money-Saving Tips for New Employees
Finally, what are the best money-saving tips that new employees should keep in mind? Take a look at the following list:
1. Tighten your purse strings when getting started
As mentioned earlier, your first few months as a new hire are crucial because you may not have the proper funds to get started yet. How do you find the money to get started? Take a look at what you are earning and how much you are spending. During the first few weeks, tighten your purse strings by brown bagging your lunch or taking advantage of in-house coffee instead of buying from some fancy coffee chain.
If you can, work some extra hours or even get a second job when you are still getting your feet wet in the corporate arena. Give up the luxuries for now like cable TV, designer clothes or skip happy hour. You will thank yourself later when you survive your first couple of months at work without being in debt – simply because you were able to live within or below your means.
2. Maximize the employee benefits that you will receive
If you’re a family man, how can you maximize the benefits that you will receive? During your orientation with the HR department, ask them about the tax benefits that you can file for, the insurance plans or the other benefits allowed for your status. This way, you would not have to allot money from your own paycheck for the monthly premiums of such benefits.
3. Learn about basic investment
Even if your monthly salary is minimal, you can still create a budget that makes it possible for you to dabble in some investment funds. Mutual funds, life cycle funds or index funds are a few basic investment instruments that you start with. By doing so, you can maximize the profit off that percentage from your salary that you are putting towards investments.
4. Set up an emergency fund
This is something that you don’t necessarily have to rush into – but the rule of thumb to follow when saving up for an emergency fund is to have at least three months’ worth of living expenses set aside. In case you experience family emergencies or if you unexpectedly lose your job, you would have the means to survive in the form of your emergency fund.
5. Focus on reducing your debt
If you’re fresh out of college, you might still be dealing with student loans and other debts. If you have room in your budget to pay these off, do so. Paying off debts as early as possible is the best way to move forward in establishing your finances for a more stable future.
6. Don’t forget to contribute to your retirement
Even if you’re still in your early 20s or late 30s, it is never too early to consider contributing to your retirement fund. In fact, the earlier you save, the better because you will have more funds to use in the future.
Ask your employer about the retirement savings plan that they offer for employees like you. It wouldn’t hurt to contribute to your own 401 (k), IRA or Roth IRA funds, either.
7. Force yourself to save
If you’re the type who is an impulsive buyer, you might find it a huge challenge to set aside funds for a savings account every month. The solution here is to pay yourself first. Force yourself to save by setting up an auto debit arrangement with your bank where a certain amount or percentage of your salary goes towards your savings fund.
8. Make sure that you have sound tax strategies
There are legal ways to maximize your take home pay – which is a must-do, considering the fact that majority of your earnings go towards taxes. Visit the website of the Internal Revenue Service and use their withholding tax calculator.
You should see there a list of tax deductions that you can claim, so you would not have to overpay or underpay. If there are business-related expenses that need to come out of your pocket as an employee, keep the receipts so you can write them off once you’re filing taxes prior to the deadline.
9. Invest in insurance coverage
At the very least, here are the insurance policies that you need to have: car insurance, renter or homeowner’s insurance, disability or life insurance. If you will get all policies from the same company, you can take advantage of discounts for umbrella policies.
10. Have a set of long-term and short-term financial goals
Finally, make sure that you have a set of financial goals – both for the short-term and the long-term. Whether it’s a vacation somewhere exotic, a new car, your dream house or if you simply want to work your way to the top by working in the company you’re now in – these dreams are completely realizable as long as you put your mind to it!