Personal Insights

Your first paycheck: Four money moves to make right away

Starting your first job is a big milestone. Before you spend your first paycheck, take a few simple steps that can help you manage your money, build credit and start working toward future goals.

Key takeaways

• Open a checking and savings account before your spending starts.
• Set up direct deposit and automatic savings.
• Build an emergency fund, even if you start small.
• Use credit carefully and pay on time.
• The habits you create with your first paycheck can shape your financial future.

What to do with your first paycheck

Start with the right accounts

Your first paycheck is a great time to establish a banking relationship, including setting up direct deposit. Direct deposit can make it easier to access your money and take advantage of services such as Early Pay.

Finding the right checking and savings account is important too – to help you manage everyday money while also setting aside money for future goals and unexpected expenses.

The sooner you separate spending from saving, the easier it may be to stay on track.

“For those starting out on their financial journeys, my advice is always the same: Have a plan for your first paycheck before payday arrives,” said Miles Victor, Regions’ Consumer Banking Manager for Greater New Orleans. “Developing a personalized plan to build financial confidence is critical with your first earned money.

“Have three buckets for your earnings: spend, save and give,” Victor said. “You should also keep your savings account separate from your spending account. Each bucket should be given a percent of your paycheck at your discretion. There’s going to be bills, unforeseen expenses and likely a friend’s birthday party or wedding that comes up. Gifts should be treated in a separate category from general spending and saving so you know you aren’t disrupting everyday life and missing key events that shape lasting friendships.

“Finally, you need a view into where your money is actually going. An app isn’t your budget but a tool to support your budget so use it that way. Properly woven into your budget and finance strategy, these ageless practices will guide you throughout life and put you on a personalized path to financial confidence — building wealth and financial stability.”

Save before you spend

As Victor recommended, when your paycheck arrives, try moving part of it directly into savings. Automating the process means you don't have to remember to do it each month.

Don’t worry about saving a large amount right away. Building the habit is more important than hitting a specific number.

Suppose you save $100 a month starting at age 22 and earn a hypothetical 3% annual return. After 10 years, you would have contributed $12,000, but your balance could grow to about $14,000. After 20 years, you would have contributed $24,000, but your balance could grow to about $32,800. Actual returns will vary based on market conditions and the account selected.

That’s the power of compound interest at work. The longer your money stays invested or in an interest-earning account, the more opportunity it has to grow.

Saving $100 a month is the cost of a few takeout meals, streaming subscriptions or a night out with friends. Left to grow over time, that same money could grow not only from what you deposit but what that money earns over time.

“One of the biggest things I’ve learned from working with customers is that successful savings doesn't always start with a large amount, it starts with consistency,” said Isabella Kauffmann, who manages Regions’ branch in Sikeston, Missouri.

“I’ve seen customers begin by setting aside what felt like a very small amount from each paycheck, but over time, that habit created something much bigger: a financial cushion and the confidence that comes with knowing they’re better prepared for the unexpected,” Kauffmann said.

“My advice is to start with an amount you know you can maintain, automate it if you can, and increase it as your income grows. When you start early, even small decisions you make with your first few paychecks can have an impact for years to come.”

Build credit carefully

If you’re considering your first credit card, think of it as a tool for building credit, not extending your budget.

Making payments on time and keeping balances manageable can help you establish a positive credit history.

If you’re considering your first credit card, Horace Brown, Regions’ banking capabilities manager, suggests thinking of it as a tool for building credit, not extending your budget. “Making payments on time and keeping balances manageable can help you establish a positive credit history,” Brown said.

“Payment history and credit utilization are two of the biggest factors that influence your credit score. As you build credit, aim to keep your balance well below your credit limit, ideally in the 10% to 30% range, and consider setting up automatic payments to help avoid missed due dates and establish positive financial habits early.”

Don’t forget your future self

If your employer offers a retirement plan, consider enrolling as early as you can to take advantage of matching contributions offered.

Common first-paycheck mistakes

• Spending your entire paycheck
• Skipping savings because the amount feels too small
• Relying on credit to fund your lifestyle
• Ignoring account balances and spending habits
• Waiting too long to think about long-term goals

Take the next step

• Schedule an appointment with a banker to create a Regions Greenprint® plan.
• Set up direct deposit to make it easier to access your money and take advantage of related banking services, such as Early Pay.
• Find the checking and savings accounts that best support your financial goals.