Lanae Klingensmith, Market Manager, NBT Bank

 

One of the most rewarding parts of my job is connecting with young professionals. Their energy, curiosity, and fresh perspectives are truly inspiring (shoutout to the incredible Catalyst group!).

 

But one thing I hear often is how overwhelming it can feel to figure out what to do with that first real paycheck. It’s exciting, yes, but also a little daunting. That’s why it’s so important to have a plan. Understanding your financial options from the moment that direct deposit hits (or you get that check in hand) is the first step toward building a strong, confident future.

 

Make a Budget and Stick to it!

Setting a budget is critical for young professionals who are often balancing a myriad of expenses, like school and car loans, rent and utility payments, entertainment and more for the first time. A budget is a plan that helps track and manage expenses to keep spending within your limits and help build your savings. Budgets are built on a simple equation: your income minus your expenses equals your monthly net. To be financially stable, your expenses must be less than your income – that’s how you know you’re living within your means. If your expenses are equal to your income, you will be living within your means, but you will have nothing left over for savings.

 

Create an Emergency Fund

One account everyone should have, regardless of your age or career stage, is an emergency fund for unexpected costs like vehicle and home repairs, medical bills, or vet bills, if you have a pet. It’s critical to consider this fund as a part of your overall monthly budget.

 

Setting a specific goal for an emergency fund will help determine a reasonable timeline for reaching it. For example, if your goal is to build a $2,000 emergency fund in one year, you’ll need to allocate about $167 per month to that fund. Being consistent in saving that amount every month is critical to achieving the goal – consider setting up a direct deposit for the amount needed from your paycheck.

 

Pay-off High Interest Debt

High interest debt is ever-changing alongside loan interest rates – it’s generally accepted that high interest debt is anything above the student loan or mortgage rates. Those interest rates are assigned when you borrow or receive money in advance – also known as credit. So, what should you do if you’re carrying this type of debt? While simply paying it off is the simple answer, actually doing it isn’t quite that straightforward, but should be a top priority before setting savings goals. Having debt, especially high interest debt, will lead to poor credit which can create obstacles to achieving your financial goals.

 

One of the most straightforward ways to pay down high interest debt is to carefully budget and track your expenses and limiting non-essential spending. There are several budgeting apps that can help track all expenses from monthly bills to groceries, eating out and even monthly streaming subscriptions. Review where you can cut spending and make a plan for paying down the debt.

 

Start Saving for Retirement

Believe it or not, it is never too early to start planning for retirement, and taking advantage of employer-sponsored retirement benefits is a great way to start! Many employers offer programs such as 401(k) plans and 403(b) plans. These accounts help reduce your current taxable income, are easy to contribute to through direct deposit, provide interest rates that support significant growth over time, and can be transferred from employer to employer, if and when you move on. When it’s time to determine your contribution, a good rule of thumb is to contribute enough to ensure you receive your employer’s full matching contribution, if offered.

 

If your employer does not offer a retirement benefit, consider starting an individual retirement account, or IRA.

 

Your banking institution can be a helpful resource in determining what option is best for you and your financial goals. For example, the NBT Bank Wealth Management team can help you determine contribution limits, how employer contributions work, what terms like “vesting” mean, and who is actually directing investments within your plan.

 

Starting out in your career is exciting but figuring out how to manage your money can be stressful! Spending money is easy but doing it responsibly and within a budget takes a bit more effort. The good news is, there are many helpful resources, like your banking partner, that can help you assess your current financial situation and future goals and provide you with money skills and tools for long-term success.

 

And remember – if you suddenly find yourself with extra money, from a bonus, birthday gift, or tax return – use it as an opportunity to get ahead of your timeline and put a portion of it toward your debt or your savings, but be sure to set aside a little bit to celebrate your new gig!

 

Lanae Klingensmith joined NBT in 2021 and has 15 years of banking experience. She is responsible for overseeing retail banking at 10 NBT branches across the Mohawk Valley.

 

About NBT Bank

NBT Bank offers personal banking, business banking and wealth management services from locations in seven states, including New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. The bank and its parent company, NBT Bancorp Inc., are headquartered in Norwich, NY. NBT Bancorp had assets of $13.86 billion as of March 31, 2025 and is traded on the Nasdaq Global Select Market under the symbol NBTB. More information about NBT is available online at www.nbtbank.com. Member FDIC.

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