5 Mistakes I Made When I Got My First Paycheck!

Don’t make these 5 Mistakes I made when I got my 1st pay check…

I got my first pay check at the age of 17! I felt proud of myself for being able to upkeep my own expenses. Well, “FREEDOM!” I thought! Many ideas came to mind on how I wanted to spend my 1st pay check, except the one idea of “saving” it.

Being so caught up in the euphoria of being able to afford stuff I always wanted, I soon found myself signing up for facial & hair treatment packages, all without a second thought. My rationale was that buying ‘packages’ would equate to cheaper per session costs, and an overall savings in the long run! I felt I was being smart with my money.

Soon, I went on regular shopping sprees for swanky new clothes and SHOES!!! A girl can never have too many shoes, right? This very carefree lifestyle went on for 2 years, supported by my full-time job, until I decided to further my education in Nanyang Polytechnic. The diploma was 3 years, and I switched to a part-time job, so that I could study, and also to provide for my spending allowance. Throughout these years, saving money never crossed my mind as essential and important thing to do.

3 years later, I graduated, found a full-time job, and my vicious cycle of spending almost everything that I earned, ensued. My logic was simple: if I had a job, that I would have money, and hence I can afford to spend.

This logic served me well until 5 years later, when I did a routine medical check-up. To my horror, I found out that my PAP smear results came back as abnormal. The bad news was that abnormal results usually resulted in suspicion of cervical cancer. My heart sank, my world came to a standstill, my mind was in a blank. Suddenly scary thoughts filled my mind, “What was I going to do?”, “Were there any cures for this?”, “how much would the cure cost??” “OMG, I have cancer!”.

Fear engulfed me, as I was worried that I did not have enough savings to tide me over the period that I may not be able to work. I had other questions in my mind, but this one played over and over again. I waited in dread until the next check-up, hoping that the first test results were a false positive. Sadly, upon further testing, it was confirmed, I had an early stage onset of cervical cancer. Doctors advised surgery and a 2 day stay in the hospital, which chalked up a $6,000 medical bill. All within 2 DAYS!

Thankfully I had myself insured under a hospitalization plan that covered the bills, but the story did not end when I was discharged from the hospital. I was required to go back for annual checks to make sure that the condition is stable and that if there were any recurrences, it would be detected early. My greatest worry was if I could afford these check-ups, they were expensive.

It then hit me, my facial packages, hair treatments, shoes and clothes could not pay for my doctor’s visits. I had to put my money in the right place and stop these bad spending habits.

I promised myself to change, but kicking a habit is never easy, I was always tempted to get that new dress or that lovely pair of heels. I had to STOP! After some thought, I decided to start by reducing my expenses, in aim to have more money to save up for the rainy days. Through this exercise, I also gained insight that besides savings, INSURANCE, a word despised by many, does the job of picking up the tabs and clearing the mess when unforeseen catastrophic events occurred.

I worked hard to document my monthly expenditure and did a simple tabulation of my total expenses. This habit enabled me to visualize and evaluate if what I wanted to buy, was necessity or just something I just purely wanted. In order to better control my purse strings, I enhanced my system. My enhancements were a collection of trial and errors, first, I tried setting aside a ‘savings amount’ at the beginning of the month, but this was not efficient in reduction of expenses. I then thought, what if I set a ‘spending budget’ instead? I could still save money, and I could spend within acceptable limits! How brilliant!

I followed my system dutifully for 12 months and behold! I managed to save a whopping $10,000! A very huge achievement for myself, whom has never had the bank amount break the 5-digit mark. Monumental achievement unlocked for me! Having seen the figures increase monthly, motivated me harder to worker harder and continue diligently saving, it has now become a habit!

In my humble learning experience, these were the 5 mistakes I made, and what I gathered as learning lessons for everyone with their first pay check, it’s never too early to;

1) Start saving! It is your hard-earned money, but;

2) Spend sensibly and within your means! Do not cultivate a mentality that your rice bowl is made of steel and that it can never be broken or taken away from you.

3) Always protect your savings. You may have no clue about what and how to plan your finances, but there are many credible financial planners who are willing to give non-obligatory consultations, like the one here. It’s what the experts are trained to help others with.

4) Learn to differentiate your needs versus your wants. This helps your savings go a long way.

5) Finally, always have the end in mind, have a short term (say 2 years) and long term (5 years?) plan for yourself. Seizing life and living it to the fullest is always the way to go, but we should have a plan in place, if not how else can we get there, if we do not know which direction to take?

Good luck!

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