What to Do With Your First Salary

There are two most gratifying moments in every young professional starting out: one is receiving your first ever paycheck and second is finally spending it. 

Now that you’re finally earning your own money and no longer living off the crumbs of your parents’ sporadic blessings (aka allowances), you might be wondering: what now? 

Whether you want to reap the benefits by treating yourself, give back to your family, or start your savings early, you’re not alone in figuring out the best move. 

The truth is, there’s no one-size-fits-all formula, but there are ways to be intentional even with your very first salary. Hence, we spoke with Marie Kristel Gabawa, a seasoned professional who’s been in the workforce for over a decade. And yes, she still remembers her first payday (well, most of it). 

It’s okay to spend on yourself (legit) 

Back in 2012, Kristel got her first paycheck as a junior researcher at an engineering company and she spent it on eating out with her workmates. Although she vaguely remembers the exact restaurant, she still remembers the feeling of being excited with her work friends. 

What we can take away here is that celebrating small and big wins is enough reason to spend your salary. This is so you don’t get burnt out by acknowledging how far you’ve come and all the major life milestones you’ve accomplished while working on to the next one. “My entire first salary was spent on me,” she admits. And that’s completely valid.

Celebrate wisely, but keep the long game in mind

“After more than 10 years of working, I’ve realized it’s important to keep the long game in mind,” she shares. 

Whether it’s your first or fiftieth paycheck, your spending should reflect your goals. Having gone through many paydays herself, Kristel recommends saving at least 20% of your first salary. According to her, that 20% is already a good start in forming your saving habit and the rest you’re free to enjoy.

Skip investing (for now)

This could be an unpopular opinion, but Kristel offers a more grounded approach: don’t rush it. 

“It’s more important to understand how you behave with money first,” she says. 

Be clear with your goals

For Kristel, having a mindset that balances saving and spending wisely is the key to perfectly transitioning into adulthood and finances. She says to not skimp on things that boost your happiness and motivation as it can help you show up better at work which will eventually open you to more earning opportunities as well.

Her biggest advice? List your goals early. Whether booking that flight to your dream vacation or building an emergency fund, having a north star keeps your spending intentional and not impulsive.

Long story short, there’s no “right” way in spending your first ever salary. What matters more is that it serves you, your needs, your goals, and the future you’re working towards.

So go ahead and eat out with your team. Buy yourself something nice. But don’t forget to start building those habits that will serve your future self too. 

Do you want to read more financial advice? Visit NEXT by BPI Preferred’s The Program.