With summer just around the corner, you may be starting an internship or a summer job soon. When you get that first sweet paycheque, you may be tempted to spend it all on fun things. But it’s important to figure out a good balance of saving, spending on essentials, and spending on yourself. In other words, “adulting”.
Creating a budget is a great way to combat that urge to spend everything in your paycheque. Build a system that works for you, it can be a loose budget or a to-the-dollar plan, but to start, create some categories for where your money goes.
1. Essential spending
This covers anything you deem essential — your rent, food, living expenses, your cell phone plan etc. Your first step when making a budget should be to cover these.
After your essentials are covered, saving a part of your paycheques can go a long way to set you up for future financial success. A good rule of thumb to start with is trying to save 5-10% of every paycheck (if you can). This money will grow over time and can help you cover bigger ticket items when they come up – like tuition for school, a new car, or first month’s rent for an apartment.
You can also consider setting aside a portion of your paycheck to make a meaningful difference. If there are causes you care deeply about, you might think about using some of your money to support them. If there isn’t enough room in your paycheque for this, you can always help volunteer, spread awareness of a cause through social media, or set aside a few grocery items for a local food bank.
4. Treating yourself
The part you’ve been waiting for. When you’re creating a budget, remember to leave some room to have fun. Try to figure out how much money you can set aside from every paycheque to spend on whatever you want — it’s okay to treat yourself a little every once in awhile! This is money that you’ve been working hard for, and you deserve to spend some on yourself.
It’s up to you how you balance your budget, but setting yourself up to cover all your expenses while saving and leaving room for fun is a strong step towards a building better financial future — and “adulting” well.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.