4 Budgeting Tips That First Time Workers Should Know


Fresh out of college and you just landed your first ever job! Congratulations and welcome to the real world! You must be thinking about what to do with your first sweldo now, and let’s be honest, most of you would probably spend them on:

  • Celebration! Treat your co-workers, your friends and family. Before you know it, your first sweldo is gone!
  • Get that item you’ve always wanted to buy, or anything that you’d like to remember your first sweldo years from now.
  • Bills. Especially if you are renting, you’ll be sharing on rent, water and electric bills.

This is how we normally budget our first salary. We do not really think about saving yet, and that may be alright. However, if this has been going on for a few months, it’s time to re-think about how we are budgeting our money. Months could turn to years, and that is when living from paycheck to paycheck happens – if you never put your plans of saving money in to practice.

Ten years ago, I got my second job here in Manila and I still didn’t know how to save. My supervisor, who was just about 2-3 years older than me was traveling around South East Asia and I remember asking, how could she do that? She must be receiving a really high pay! Those were the days when seat sales or Peso fares are not a thing yet, so traveling was a lot more expensive.

She actually sat me down and gave me a few tips about saving. She was the one who first told me about the right formula (literally) on how to save. Here are some of the basics on how to budget your salary that even old timers like me need to know.


1. Pay yourself first.

Upon receiving your salary, put away away a certain amount for your savings. The formula is always salary minus savings, and spend only what is left after savings.


Stick to this rule! The earlier you put this to practice, the better. Make it a habit. Immediately save a certain amount as soon as you receive your pay, then forget about it. Whatever is left is the only money you have until the next payday.

2. How much should you save?

Ideally, 20% of you income should go to your savings.

If you have been working for a while and still having a hard time to save, go small. Maybe 10%? This is considered too low for many, but for the rest of us who are not savers, starting small does the trick. Again, you need to make saving money a habit and if you’ve been used to spending all your money, starting big is not going to work. Chances are, you would go broke a week before payday and you would end up “stealing” from your savings account. Try to start small until you can make saving a habit, then add more as you progress.



3. Now do you feel that you are not earning enough to be able to save? A higher salary is not a guarantee either. When you earn more, you will tend to upgrade on everything. When I started working, I thought my salary is just enough for my budget on spending. There’s not enough left for saving and that is because I was not following the formula. I thought I’d be able to save when I get a better-paying job. And so I thought.

I spend five years in my second job and experienced salary increases every year. But it never felt enough. Why? Because I kept on upgrading my lifestyle too. That’s how some of us have been conditioned to think. Let’s put an end to this mentality!

4. Are you renting? Make sure that only 20% to 30% of your salary is going to your rent. If your rent is more than 30% of your salary, look for a cheaper place. There are also lots of ways to save when you are renting, and I discussed them in this post:

How to Save Money While Renting

If you are not renting, it means that the amount you are saving should not be less than 30% of your salary. Try 40%!

Again, start early. Save while you are young. Always pay yourself first. A healthy bank account could mean a lot of things later on – being able to afford insurance and investments at an early age, bigger chances of getting approved of your home or auto loans, and even your credit card applications.

Banks will be offering you stuff such as a reward cards and other promos. Above all, the sense of security knowing that you have money to use in case of emergency is priceless!

I wish I’d known all these before I graduated. I wish there was a mandatory budgeting class to enroll in. Are they now teaching these in schools?

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