How to decode your paycheck and manage your money like a boss

How to decode your paycheck and manage your money like a bossHow to decode your paycheck and manage your money like a bossOne of the best perks of working a full-time job after you graduate from college is receiving a consistent paycheck. Regardless of whether youre paid every other Friday or just twice a month, that income is your ticket to financial freedom - if you manage it correctly. Before you go spending all that dough, take a few minutes to understand whats printed on your paycheck and pay stub. Then learn what it takes to manage that money so you stay on track for all of your financial goals.Understanding Your paycheckYour paycheck has a lot of valuable information in it. Learning what it all means can help you stay on top of your finances and manage your money like a boss. Heres a breakdown of what could be in your paycheck, as well as what it all means.Follow Ladders on FlipboardFollow Ladders magazines on Flipboard covering Happiness, Productivity, Job Satisfaction, Neur oscience, and moreIn this example below, lets say youre making an annual salary of $50,000 at an awesome job in North Carolina. This is your fourth paycheck since you started working and you have health, dental and vision insurance, positiv an employer-sponsored 401(k) retirement account that you signed up for and are contributing 6 percent to from every paycheck.Setting up direct depositNow that youre getting a paycheck every two weeks or so, make sure you get that money in your hands ASAP. If you dont have a checking account yet, nows the time to sign up for one. There are a ton of banks to choose from, so shop around forone that works best for you. We recommend one with no fees, no nadir balance requirements, easy access to ATMs and a good interest rate.Once you have your checking account in place,sign up for direct deposit at work. Youll most likely receive a form for it on your first day, but if not, ask your HR or payroll department about it. Also, youll need to fill in some i nformation on this form, including your name, banks name, checking account number and bank routing number. Lastly, youll need to include a voided check with the form (literally a blank check that has the word VOID written on it in big letters). Once youve completed these steps, you wont have to worry about receiving a paper check anymore. Your money will arrive in your account ASAP on payday.Pro TipAlways have at leastone and a half months worth of take-home payin your checking account at all times so that you can cover all of your expensesand whatever else life throws your way.Scheduling automatic bill payNow that your paycheck is being directly deposited into your checking account, schedule automatic bill payments so you never miss a deadline. Lots of companies allow this option for customers, so check in with your credit card, electric, phone and any other company that you pay a bill to every month.Youll also want to sign up for automatic transfers so you can save money every mon th without even thinking about it. You can do this by opening a savings account - preferably a high-interest savings account- and then scheduling the transfer of funds for every payday. If youre not sure how much to save, try the 60-20-20 budget, where you save 20 percent of your income, spend 20 percent of your income and pay off your bills and necessities with the other 60 percent of your income.Pro TipMaximize your money by connecting your bills to arewards credit cardthat offers cash back, points or miles. Then, schedule automatic bill payments for that credit card so you never miss that payment. Credit cards are agreat way to build creditand achieve an excellent credit score. If you dont have one, we suggest you findone thats right for your everyday expenses.Managing your moneyThe moneys flowing in and youre feeling good about your finances, but are you doing everything you can to make it count? Heres a quick checklist to consider when it comes to managing your new income like a boss.BudgetingTake inventory of your finances and then create a budget around the 60-20-20 method. You canstart with a simple Google Sheet. Just type in all of your expenses, compare that with your income and make sure you have enough to cover it all.Paying down debtYour debt, whether its student loans or credit cards, is part of your monthly bills. Make paying it off a priority. Once youve paid the minimum, consider paying a little more toward the principal if you can. Itll help you save money by not paying as much interest in the long run.Building an emergency fundSaving any amount of money is great, but you should really aim to build upan emergency fund. Once you have six to nine months worth of expenses saved, plus a little more, you can start putting more money toward other things, like the principal on your debt or an investment account.InvestingOnce youre in a good place with paying your bills and saving money, consider investing some cash. You can start with as little as $5 through companies likeAcorns. Other great beginner investment accounts includeRobinhood,FundriseandEllevest.With these tips, youll be well on your way to serving asyour own financial advisorby the time youre 30 years old. Just stay on top of your finances now and in the future, and youll be leading the life youve always wanted in no time.This article originally appeared on Swirled.You might also enjoyNew neuroscience reveals 4 rituals that will make you happyStrangers know your social class in the first seven words you say, study finds10 lessons from Benjamin Franklins daily schedule that will double your productivityThe worst mistakes you can make in an interview, according to 12 CEOs10 habits of mentally strong people