You've finally made it. You've passed your program, you've landed a job, and you are starting to feel financially secure. There is no doubt about it – when you get your first, hard-earned paycheck, it's exciting. That's why it's easy to put the cart before the horse when it comes to spending.
It's important to assess your new financial situation before you start splurging on items. Keep yourself in check and start your career path with smart financial decisions. Here's a list of dos and don'ts every one new to EMS should pay attention to.
1. Should: Do nothing out of your financial normal. Use your first few paychecks to observe how they work out with your already established bills. You may also be surprised about how much taxes or benefits cut into your paycheck. Jot down how much you have left after living your pre-career lifestyle: paying rent, your car payment and other ancillary fees. When you get into a rhythm of how much you are typically spending vs. how much you are making, you'll see how much discretionary income you actually have. The number may be smaller than you anticipated.
2. Should not: Immediately buy a new car. Maybe you've had your eye on a new SUV, or you're just looking for something practical to get around in. Either way, it's important to assess how much you can actually get away with spending before locking yourself into a car payment. You might also make unexpected observations – perhaps you're burning more gas on your commute than you thought, which could change your buying decision altogether.
3. Should: Spend on interest-accruing items you haven't had money to cover. Let's say you haven't had the ability to start chipping away at your student loans, a car payment or your credit card debt. You've gone this long without worrying about them, so it may be easy to take your first paycheck and put it toward something fun. The longer you resist debts, the more interest you're accruing – meaning the more you'll be paying in the long run. If you have a bit of padding this month, try to use some of it on your outstanding debt.
4. Should not: Get a credit card right away. You may have abstained from signing up for a credit card before your steady career paycheck, but now that you have regular money coming in, credit cards seem less scary. While credit cards are a great tool, especially if you haven't established a credit score, it's smart to hold off on getting one until you're comfortable with your new pay increase. Don't tempt yourself to live outside your means with a larger paycheck and an extra credit line.
5. Should: Start putting extra savings into a retirement account. It may seem odd to start thinking about retirement when you've only just begun your career, but ask any veteran paramedic – pensions aren't what they used to be. The younger you are when you start saving for retirement, the happier you'll be once you hang up the uniform.
6. Should not: Buy a vacation. Now is not the time to start taking paid vacation or dipping into your early savings. Although veterans at your station may scoff at the idea of taking a vacation at all, someday you will have the opportunity to treat yourself to a nice getaway – just not immediately. It's bad for your wallet and your reputation.
7. Should: Put a few pennies into an emergency fund. Getting surprised by car trouble, health issues or any other money obstacle that may come your way is never fun. Having some cash stashed away can take the sting out of these occurrences. Most experts agree that your emergency fund should equal three to six months' worth of living expenses.
We'll look the other way if you start these "should and should nots" after you buy yourself one decent meal. Congratulate yourself on the new job and a major accomplishment you've earned for yourself. Here's to a long – and fiscally responsible – journey in EMS .
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