It happens to everybody. We get our first jobs, we work hard, we excitedly rip into that first paycheck and, as Rachel so famously said on Friends, “Who’s FICA? Why’s he taking all my money?” Congratulations! You’ve just been introduced to taxes!

Here’s the good news: for many of you, all of the money that is taken out of your paycheck over the course of the year for federal and state taxes will be refunded to you when you file your taxes. Trust me when I tell you: this is the easiest way to do taxes. When you go into business for yourself or start freelancing, taxes get a whole lot more complicated. But that is another article for another time.

Here’s how to manage your money now so that you can lay a solid foundation for later, when you’re ready to start investing in bigger things than CDs (which we’ll talk about in a second).  For now, though, baby steps (no offense).

Start With A Budget

If you’re just entering the world of full time employment after school, the first thing you need to do is get used to living within a budget. Yes, it’s a drag. You were looking forward to adulthood as this thing where you could do whatever whenever. You still can do whatever whenever, but if you follow a budget, you don’t have to worry that your whatever and whenever will send you right back to your old childhood bedroom.

Putting together a basic budget, believe it or not, is really easy. It’s sticking to it that’s hard. This is why, in spite of what you might have read, you should make room in your budget for “fun money.” This way you don’t have to worry that going to a movie will shove your checking account into overdraft or that you’ll be eating Ramen for a week to make up for it. When you budget for fun, paying your bills doesn’t feel quite like such a chore.

In addition to budgeting for fun, you need to budget for savings.

Start Saving Now

It’s true that you already may give around twenty(ish) percent of your paycheck straight to taxes and FICA. The idea of squirreling away any more seems almost mean. Do it anyway. Put 10% of your paycheck directly into a savings account. In fact, if your employer offers direct deposit, you can set up direct deposit to do this for you. That way you won’t have to remember to do it yourself and you won’t be tempted to spend the money on other things.

If you can afford to squirrel away a little more, do that. Try to aim for another 10%. This 10% is the beginning of your emergency fund. Your emergency fund is what you turn to when your car breaks down, your roommate suddenly moves out, etc.

Do Your Taxes On Time

Taxes can be stressful. That’s just how they work. As a young adult, though, you need to pay particular attention to a couple of details. For example, as this article points out,  if your parents can still claim you as a dependent, the status you claim on your tax returns needs to match the status your parents claim for you on theirs. You might also be eligible for education credits and deductions.

It’s normal to want to tackle your taxes on your own. There are, however, certain situations that can be difficult to navigate and it’s okay to ask for help when you need it. For example, according to an article I found on, moving or relocating to take a job, switching jobs, exercising your employee stock options, etc. can make your taxes more complicated. Working with a pro can help you ensure that your taxes are filed correctly.

Start Investing Now

Seriously! Most people wait to even start learning about investing until they can afford to buy stocks or mutual funds. Don’t make this mistake! Start learning about investing now so that, by the time you’re ready to make large investments, you’ll know what you’re doing.

In the meantime, start making smaller investments. The easiest investment is a CD, though it’s also the least rewarding. A CD is basically a savings account that you aren’t allowed to access for a pre-determined amount of time. It’s the JV version of investing but it’s a good way to learn about interest rates, how compound interest works, etc. From there you can move on to mutual funds (or rather index funds), etc.

The point is: be smart with your money. Yes, toys are fun, but they are more fun when you know that you can afford them without having to sacrifice in other areas or put other parts of your life at risk!