Budgeting Basics for Your First Paycheck
By Paige Marley, Employment and Training Consultant, Youth and Young Adults
Getting your first paycheck is exciting, but before you spend it all, let’s talk about how to make it last. Budgeting might sound boring, but it’s actually a superpower that helps you stay in control of your money and reach your goals faster.
Step 1: Understand Your Paycheck
Your paycheck might be smaller than expected. That’s because of taxes and deductions like:
Federal and state taxes
Social Security and Medicare
Other deductions (like health insurance, if offered)
Tip: Look at your net pay; that’s the amount you actually take home.
Step 2: The 50/30/20 Rule
A simple way to start budgeting is the 50/30/20 rule:
50% Needs – Rent, transportation, groceries, phone bill
30% Wants – Eating out, clothes, entertainment
20% Savings – Emergency fund, future goals, or paying off debt
You can adjust the percentages based on your situation, but this is a good starting point.
Step 3: Pay Yourself First
Before you spend, set aside money for savings. Even $10 a week adds up over time. Consider:
A savings account for emergencies
A separate account for big goals (like a car or college)
Step 4: Use Budgeting Tools
There are several apps that offer free plans to help you track your spending, including:
Or just use a simple spreadsheet or notebook!
Step 5: Set a Goal
Budgeting is easier when you have a goal. Want to buy a laptop? Save for a trip? Start a small business? Knowing your “why” helps you stay motivated.
Budgeting isn’t about saying “no” to fun, it’s about saying “yes” to your future. The earlier you learn to manage your money, the more freedom you’ll have later!