How To Maximise Your First Paycheck To Reach Your Financial Goals

For many young individuals, receiving their first paycheck is a euphoric feeling and a gateway to independence. However, with this income, how should you spend and save? What should you do with your money? Read more to find out.

Joyce Chua

by Joyce Chua on Mar 18, 2024

woman at work on laptop career fresh grad sme

You are fresh out of the education system and embarking on your first job. After a month, you receive your very first paycheck and you are excited to finally have more financial power. However, as a financially prudent individual, you want to ensure that you are maximising every dollar you make. How do you do so? Here’s a guide to help you along.

Lifestyle and Goals

At this early stage of your life, it is important to find out what your goals are, whether to start a family, save for some big-ticket purchase in the future or retire early.

Having a goal makes it easier to stick to a budget and prevents you from overspending.

For a start, you should always ensure that you have an emergency fund set aside. A general rule of thumb is to set aside three to six months’ worth of expenses as an emergency fund. You can then go ahead to save or spend after you have your emergency fund set aside.

Read More: 5 Reasons You Must Have an Emergency Fund

Buying a House

For most Singaporeans, buying a house is a new and exciting part of adult life and would be one of the biggest purchases you will ever make. Though you can get HDB loans or mortgage loans, it will still be a major purchase considering the amount you can loan. Typically, you would get up to 80% on bank loans and 85% on HDB loans, which means the rest are payable upfront.

Fortunately, you are able to pay for the down payments using your CPF. However, buying a new house is not that simple. You will have to consider furniture and renovation which will cost you tens of thousands of dollars depending on your budget and what you choose.

Read More: Can You Use CPF To Pay Your Monthly Mortgage Bank Loan?

Getting Married

wedding rings
Source: Pexels

A wedding can be quite an expensive experience for most as it is a once-in-a-lifetime event and most of us want it to be remembered. A normal wedding would set you back around S$37,000. It is therefore important to save up, have a clear budget and be realistic about what you can afford. Retire Early: FIRE Movement For those who wish to have an early retirement, FIRE Movement is a great way to achieve that. FIRE Movement is essentially about saving large amounts of your monthly income to your retirement fund so that you have enough to sustain your retired lifestyle when you retire early.

People who partake in the FIRE movement are generally those that can delay gratification and have good budgeting ability. FIRE movement is suited for younger individuals as they would have a greater window to save. If you wish to retire earlier, start with your first paycheck and be prudent when you spend your money.

Read More: FIRE Movement: How to Retire Early Without Financial Worries

50/30/20 Rule

The 50/30/20 rule is a popular budgeting rule that is simple and effective in helping people save. In essence, you would spend 50% of your paycheck on necessities, 30% of your paycheck on wants and 20% of your paycheck on saving.

The 50/30/20 budgeting rule is a more realistic budgeting system for adults. If you consider your monthly bills and repayment into your necessity expense, it will easily reach 50% of your paycheck. Giving yourself 30% to indulge and 20% to save is a sensible system to adopt.

Once you have determined your goal and lifestyle, you will need to find the right financial instrument to achieve your desired goals.

Savings Account

With your first paycheck, you are stepping into the adult lifestyle and you will need a timely upgrade. Instead of a simple savings account, look for a high-interest savings account that will bring you higher interest rates while you deposit your salary into the saving account.

For example, you can use the DBS Multiplier account to earn a high-interest rate while you save. [Read our full review]

Credit Card

As a working adult who has higher spending power and more items to pay for, getting a credit card would be a consideration when you start working full time. Find a credit card that allows you to earn cashback on bills or insurance repayment. If you are a small spender, look for cards that have fee waivers and low minimum spending requirements.

OCBC Frank

OCBC Frank is one of the best cards for younger consumers on a budget since it offers high cashback rates (6%), low min spend (S$600) and a relatively high cashback cap of S$75. [Read our full review]

Compare The Best Credit Cards in SingaporeFind Out More


If you haven’t bought insurance, it is time to buy some. Get yourself suitable health insurance coverage depending on your needs and don’t forget to buy life insurance as well. Furthermore, health and life insurance are cheaper in your earlier years as you are healthier and less likely to be seriously ill.

Beyond these basic insurance, insure other parts of your life like a car or motorcycle if you own one, home insurance if you own a house or personal accident insurance if you engage in risky activities.

Read More: Best Health and Medical Insurance in Singapore

Discover The Best Health Insurance PlansFind Out More


hand holding mobile phone with investment app
Source: Pexels

Some light investment will be a great way to maximise your money. Consider opening up an online brokerage account and investing in some blue-chip stocks or index funds. If you want even lower risk in your investment you can opt for government bonds.

If you are uncomfortable about investing in the stock market, you could also sign up for those insurance saving plans or even an endowment plan. The insurance saving plans offer attractive returns for users who commit to a longer maturity, thus it is beneficial to start early, especially when you just started working.

Read More: Best Endowment and Insurance Savings Plan in Singapore

Compare Online Brokerages in SingaporeFind Out More


Receiving your first paycheck and having the financial capability to spend on yourself is one of the most surreal feelings. However, be diligent in finding your financial goals and formulating a sound budget. Make use of financial instruments to earn interest and cashback as much as possible. Lastly, get yourself properly insured for any eventualities in the future.

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