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The graduate’s guide: Your first job

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School’s behind you. Now it’s time to put everything you’ve learned to work. Your first couple of days on the job will likely include filling out forms that will require you to make a flurry of key financial decisions. Use this guide to be ready, so you can focus on making a good impression.

Before you start

  • Check your credit reports. Many employers now use credit histories and background checks in their hiring decisions. Make sure what they’re seeing is accurate. Get free credit reports from annualcreditreport.com.
  • Don’t overestimate your paycheck. After deductions for taxes and benefits, you may take home only about 75 percent of your salary. Avoid committing to future payments until you have a firm idea of how much you’ll be bringing home.
  • Consider living expenses. If you have to find a place to live, try to keep housing costs (rent and utilities) below 30 percent of what you’ll earn. Also, be ready to pay first and last months’ rent—plus deposits for utilities. The good news is that some moving expenses may be deductible on your federal income taxes, even if you don’t itemize.

Your first day

  • Bring required I.D. Before showing up, find out what forms of identification your new employer would require. If you take your Social Security card or passport, be sure to take them out of your wallet or purse when you get home and keep them somewhere safe to reduce your risk of identity theft.
  • Sign up for direct deposit. Many banks and credit unions will waive monthly fees if you have direct deposit. Also, ask if your workplace offers automatic savings or allotments to other accounts.
  • Estimate your withholding. One of the first things you’ll be asked to do is fill out a W-4 form. This withholding calculator can help.
  • Find out when you’ll get paid. Depending when you enter the pay cycle, you may have to wait a few weeks longer than you thought.

During your first few weeks

  • Sign up for health benefits. During your first week, take some time to understand your options, deductibles and co-pays. If your employer offers a flexible savings account, you can use it to save pre-tax dollars to cover those costs.
  • No health benefits? Ask your parents if you can stay on their plan. New rules may let you stay on your parents’ plan until you’re 26.
  • Start your retirement saving. Many employers offer a retirement savings plan at work. Find out your options and start saving as soon as possible–especially if your workplace offers a matching contribution. That’s free money! Save at least enough to get your employer’s contribution. Some employers may require you to work up to a year before signing up. If that’s the case, set a reminder for yourself and sign up as soon as you can.
  • Open an IRA. If a plan isn’t offered at work, you have to wait a period of time to join, or you think it might be appropriate for you, consider opening an individual retirement account (IRA) on your own.
  • Consider enrolling in IBR. If you have federal student loans and you are not getting a hefty paycheck, you should consider enrolling in income-based repayment (IBR).
  • Ask questions. Being independent doesn’t mean you have to know everything. If you have questions, ask people you trust, like your parents or friends. Your human resources department may also have staff available to help. You could Ask CFPB or try online resources like the IRS or Department of Labor.

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