How new grads can make the most of their first paycheck

Whether you're a recent college graduate or the parent of one, navigating the world of full-time employment and finances can be overwhelming.

Mikey Manghum, vice-president of Regent Private Wealth, joined News On 6's Dave Davis to break down how young professionals can set themselves up for financial success from the very beginning.

Why the First Paycheck Matters

Manghum said his passion for this topic comes from personal experience.

"For me growing up, there wasn't a lot of communication around how money works, the right things I should be doing," he said. "There's a lot of jargon in my industry, and there's a lot of terms thrown around. And then now these kids are hearing sound bites on social media, 'Here's your advice in 15 seconds.' So I think really just kind of distilling the confusion that can exist and trying to bring a little bit of clarity is why I enjoy talking about things like this."

Start With Benefits

The first step in any new job is understanding benefits, Manghum said. That typically starts with a meeting with human resources to review offerings like health insurance, disability coverage and retirement plans.

"I always encourage people to sign up for the things they don't want to insure themselves," he said. "So things like health insurance, you don't want that medical bill to be solely your responsibility. Long-term disability is another one like that… they're going to replace a portion of your salary or your wages until you're able to come back to work."

Manghum also emphasized contributing to a 401(k), especially when there's a company match.

"If you have a match, take full advantage of that match," he said. "Let's say it's 5% you give and you get 5% on that. That's essentially a 100% return on your money every time you make a deposit. There are not many places in the market we can go get a 100% return."

Build a Personal Economy

Manghum said new earners need to understand their "personal economy"—a term he uses to describe budgeting based on actual take-home pay, not just salary numbers.

"A lot of times when you first graduate, it's more money than you've maybe ever seen," he said. "But you've calculated, 'Hey, they told me I was going to get this salary,' and what I'm taking home seems to be a lot less... that's a part of it."

He advised tracking expenses and automating savings as early as possible.

"We live in an instant gratification world where something is constantly vying for your attention, vying for your dollars," Manghum said. "So if you can automate those savings, get them out of sight, out of mind early and often, you'll set yourself up for success in the long run."

Finding the Balance Between Future and Fun

For many young adults, the excitement of earning money comes with the temptation to spend. Manghum said it's important to enjoy the present without ignoring future goals.

"I think first and foremost, because we live in this instant gratification world, we're constantly playing the comparison game," he said. "Not many people slow down to think about: what are my goals financially?"

That could mean saving for travel, education, or retirement—and reverse-engineering a plan to make it happen.

"If you can consistently be saving 15 or 20% throughout your career, you should feel OK about enjoying life now too," he said. "Because the way the math works... you can retire comfortably and be living on about the same amount of income that you were making when you retired."