The first salary is often associated with greater freedom – the opportunity arises to purchase a long-desired item, travel more, or entertain with friends more often. However, according to Aušrinė Mincienė, Head of Everyday Banking at Luminor Bank, the first earnings are a good opportunity to start forming financial habits that can be useful throughout life.
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“The first salary is not just a financial event – it is the first opportunity to make decisions about your own money. It is natural to want to reward yourself for the work done, but it is important not to forget that even a small portion of deferred income can eventually become a valuable habit. It is worth starting to save not when you earn a lot, but when the first income appears,” says A. Mincienė.
A simple plan for the first earnings
One of the most common mistakes, according to A. Mincienė, is to treat the entire salary as money that must be spent as quickly as possible. It is much more beneficial to decide right after receiving the salary what portion will be allocated for daily expenses and what portion for savings. Even by setting aside 10–20% of income, you can gradually form a habit that will help achieve bigger financial goals in the future.
“Saving becomes much easier when money is set aside immediately, rather than at the end of the month hoping something will be left. It is also worth having a clear goal, for example, saving for a trip, driving courses, a new computer, or studies. A specific goal helps resist impulsive purchases and reminds why it is worth keeping part of the money for the future,” notes the Head of Everyday Banking at Luminor Bank.
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The most important thing is not the amount, but the habit
A. Mincienė points out that young people receiving their first income benefit from monitoring their expenses for at least some time. Often, only by reviewing where the money is spent does it become clear how much is “melted away” daily on small spontaneous purchases. This habit allows better understanding of one’s financial habits and easier making of thoughtful decisions.
However, the most important thing is not how much is saved during the first summer. Much more significant is the habit of regularly setting aside a portion of income. Financial management skills acquired in youth later help to plan bigger goals more easily – from the first car or trip to purchasing one’s own home.
“The start of a career can become not only the first professional experience but also the first step in creating a healthy relationship with money. The earlier a person understands the value of planning and saving, the easier it is later to make important financial decisions and feel more confident about their future,” emphasizes A. Mincienė.
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