Got Your First Job? Here's Why Building an Emergency Fund Should Be Your Priority

Getting your first job is exciting. Now you finally have a way to pay for expenses so you don't have to be reliant on your parents for financial support. And if you're at an age where your parents are no longer able or willing to provide that support, then it's especially important to land a job and a steady paycheck.

You may be inclined to tackle a few different financial goals once you start earning money from a job. Those might include paying down a credit card balance or chipping away at the debt you incurred in the course of getting a degree.

But actually, your first priority should be to build yourself a fully-loaded emergency fund. Here's why.

Emergency savings could save you from debt

As of the first quarter of 2023, U.S. consumers owed a whopping $917 billion in credit card debt, according to TransUnion. If you don't have a solid emergency fund, you run the risk of landing in costly debt when unplanned bills arise. Those bills could have something to do with your car, your health, or even your apartment (such as if a piece of furniture, like your dining table, gets damaged somehow, and you need a new one to function).

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Now if you already have debt, you may be inclined to try to chip away at the sum you owe. But without an emergency fund, you might put yourself at risk of further debt, and costlier debt at that. So instead, you should make your emergency fund your first priority and work on tackling existing debt once you have some cash reserves.

In fact, ideally, you should aim for enough money in emergency savings to cover three months of essential bills. It's great that you've gotten a job, but the reality is that jobs can disappear -- even when you're good at yours.

If your company is forced to downsize at any point, your job could land on the chopping block. Having enough money in the bank to pay for three months of bills buys you some time to find a replacement job without having to resort to going into debt.

You may want to automate the process

When you're adjusting to your first job and paycheck, sometimes it can be tough to stay disciplined. A good way to stay on track with building an emergency fund is to put the process on autopilot.

Arrange for a preset amount of money to leave your checking account at the start of the month -- before you've gotten to spend it -- and land in your savings account. That way, you'll be more likely to end up with a decent chunk of cash reserves.

Now that you're working, there may be a lot of things you want to do with your hard-earned money. But building an emergency fund should really be the first thing you do. And if you automate the process, you may find that building that safety net is pretty seamless. You might even log into your savings account one day at random to find that your emergency fund is nice and complete.