First Moves

Immediate moves to make with your paycheck

Payday is a great day. But before you go spending that paycheck on fabulous shoes and fun dinners out, there are a few things you should do first. Here’s what to do with your check when it hits your account.


If you have a 401(k), contribute to your account first. Investing money before you have a chance to spend it is a great way to invest in your future self. If possible, make sure you’re hitting the max contributions to earn an employer match. A good guideline for contributing to your 401(k) is about 10 percent (or more) of your yearly income.

Cover Emergencies

As CNBC notes, now that long-term savings are handled, your next target is short-term savings. That means padding your emergency fund — you want enough to cover six months of fixed expenses — and your savings accounts. Again, you want this transaction automated. That way, each payday your investments and savings are stocked before anything else.

Fix Expenses

With savings covered, make sure your paycheck covers fixed expenses. That might mean reviewing your budget so that everything is in order. If monthly bills are becoming an obstacle, that’s a sign that your budget needs some revising.

Address Debt

If you’re carrying debt, have your paycheck set up to take care of those payments. Automate payments so you can dig out of debt quickly and avoid compounding interest. With these items taken care of, the rest of your paycheck should be ready to be used in whatever ways you please.

Chris O'Shea

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