The Most Confusing Things About Being A Grown-Up


It’s payday at your first real job. You’re bouncing with excitement. Based on your calculations, you’ve made enough to pay your bills AND buy those new shoes that you’ve been eyeing. Plus there’s plenty left over to go out with friends, see a movie, and eat out a few times.

The envelope arrives at your desk. You tear into it impatiently. As you look at your income statement, your grin of anticipation turns into a look of confusion.

Where did all your money go?!


Your first job will come with a number of new and exciting experiences. For some of us, we’ve been anticipating these things for our entire lives. Your first real office, big project, or company credit card may feel like a rite of passage, but some of us never anticipated a number of these seemingly obvious aspects of professional life.

Navigating these first job surprises can be tough, especially when you or no one else in your family has had to deal with them before.

This is a very common plight in the lives of first-generation graduates. If you’re out there and you’re struggling to understand how to navigate some of the curve balls that your new professional world has thrown at you, read on!

I asked a number of anonymous first-generation professionals what was most confusing about their transition into the professional workplace. Some of their stories and solutions are detailed below.

Confusing Things About the Real World:

  • Taxes?

Most of us have heard of income tax, but the percentage of your pay that you never see may be a huge shock the first time that you get taxed like a real person. The tiny amount of money that is deducted from your work-study check as a student is nothing compared to the amount in the “real world.”

One of my good friends told me that when she saw how much she’d been taxed on her first big paycheck, she was convinced that they’d made a mistake.

They hadn’t.

Making lots of money is exciting, but remember that you’re not going to be taking all of it home. The more you make, the more you will be taxed. Like my friend, there may be a huge difference between what you expect to receive on payday and what actually ends up in your bank account.

Base your budget on your estimated net income, not gross. Otherwise, you may find yourself disappointed on payday.

Check out this handy online net-pay calculator for a decent estimate of your net income based on your salary and state withholdings.

There is, of course, the other obvious headache when it comes to taxes. Filing them.

Most people don’t file taxes in college. If you do, you can probably get by using free internet filing software such as TurboTax or H&R Block. It can be a little trickier once you enter the workforce.

Do you suddenly have bonuses to report? Do you qualify for some tax deduction that you’ve never heard of? Did you make any charitable donations this year that can be written off?

“After one season of filing taxes, I was yearning for the days of EZ filing,” says one recent college grad. “I just wanted my mom to do it all for me, but she had no idea what I was going through. She’d never been in this situation before.”

This is a very common problem for first-gen recent grads. Who do you turn to for tax advice when your parents can’t help you?

“Fortunately I had a good friend whose older brother was a tax attorney. He walked me through the process and taught me a few things so that I would be better prepared the next year. There were much fewer tears after that.”

Taxes are a necessary evil. The bottom line is that you have to get used to them and anticipate how they’re going to affect you. Connect with someone who can guide you through your first tax season as a working professional. Ask your friends if they have parents, siblings, or significant others who can give a workshop to you and a small group of others. Reach out to your local library or other public spaces and see if they offer free tax prep sessions. It may even benefit you to contact your alumni office to suggest an event with recent alums and more experienced people who can offer tips and guidance to you.

  • 401(k)? Isn’t that for old people?

“When my boss mentioned that the company matched an employee’s 401(k) contribution, I just smiled and nodded. On the inside, I was like ‘what?’”

What indeed.

Simply put, 401(k)s are plans that employers sponsor in order to help their workers plan for retirement. Each pay period, an employee can automatically allocate a small percentage of their paycheck to be deposited into their 401(k).

When you’re used to your parents living paycheck to paycheck, saving now for your life 40 years down the road is a completely foreign concept. Although it may be unfamiliar, it’s important to understand your 401(k) and contribute to it throughout your career.

Find out whether or not the jobs that you are applying for come with a 401(k) savings plan. If they do, ask questions during your salary and benefits negotiation once you get the job. Find out about your company’s automatic contribution and matching rates. [Editor’s note: Also check out this interview we did with a financial advisor, which covers the basics of what 401(k)s are all about, how to prioritize between student loans and retirement savings, and other financial advice you didn’t know you needed until now!]

If a 401(k) isn’t part of your package, do some research about IRAs (Individual Retirement Accounts). There is plenty of information online about the benefits of starting a plan like this, even as a young person!

Saving for retirement is a young person’s game. It’s never too early to start. If you’re not convinced, this article from The New York Times might change your mind.

  • Insurance?

When I was a student, I would hear the people in my office complain about how much was taken out of their pay for dental, vision, and general health care. They’d bemoan their premiums and compare deductions and copays.

I had no idea what they were talking about.

Part of my scholarship offer was a stipend to pay for enrollment into the school’s student insurance program. All that I had to do was fill out a form, mail in a check, and BAM!

Before that, my grandparents handled all of my insurance information, from my car insurance to my life insurance policies. I didn’t even see an insurance card with my name on it until I was in college. Not too long after that, I realized how many different types of insurance are out there—some that you may need without even knowing it!

Take renters’ insurance, for instance. Sure, I’d heard of homeowners’ insurance, but I didn’t know that anyone cared about a twentysomething like me who was living on someone else’s property. I was shocked to find out that not only is this type of coverage available, but some people won’t even consider you for an apartment unless you have it!

Pet insurance, flood insurance, alien abduction insurance. These are important, people!

If you’re a first-gener, this may be the first time that you’re exploring all of these different types of coverage. Like me, you may find that there’s tons of stuff out there that you’ve never heard of before. Do your research. Protect the things most important to you. Take care of your teeth, your car, and keep your brain away from those extraterrestrial probes out there.

  • I get stock options?!

Many of the jobs that recent grads are applying for now come with this exciting addition. This is especially true if you’re working for a start-up or in tech.

When you got your offer package, you may have been shocked to find that it included stock options. If your first thought was, “Seriously? I own part of the company? Wait, what does that mean?” Then congratulations—you’re not alone!

There are plenty of young people just like you who suddenly have to figure out what it means to hold stock. How does this affect your tax process? What does it mean for a stock to “vest”? How do you choose between a number of stock options? When should you cash out?

I know that if I went home talking about the stock that was part of my offer, I’d be met with a bunch of blank stares. No one in my family has ever had to report their investment holdings to the government during tax season (because they don’t have any!).

Who do you turn to if you’re in a similar situation?

While they may not be able to give complete advice due to legal reasons, the hiring manager or someone from the HR committee at your new company should be able to help—or at least point you in the right direction.

  • Investing?

Last summer, a good friend of mine and I got to talking about what it’s like to come into privilege as people from working class, first-generation backgrounds. She talked about how she felt to be out-earning her parents with her first job and what to do with her extra money.

“With my first job out of college, I was making more than my mother had ever made in her life. I struggled with deciding between using my income to build my portfolio or giving back at home. My mom encouraged me to invest.”

After weighing the pros and cons of both, my friend found a way to support her family while also exploring what it means to invest. She said that giving back at home was the intuitive part. Investing however, was an incredibly daunting and foreign task.

Many young folk are encouraged to invest part of their savings in stock. But what does that actually mean and how do you do it?

For three years, I served on my school’s student investment fund. Let me tell you that the decision to invest is a big one.

Do you want to make long-term investments that’ll pay off later or short-term ones that will make cash “quick”? Are you investing in stocks? Bonds? EFTs? How do you plan to balance your portfolio? Are you high risk or risk averse? Will you seek guidance from a brokerage or try your luck alone? Are you investing in penny stocks? Small caps? Large caps? Are you interested in companies that trade on NASDAQ? The S&P 500? The NYSE?

Overwhelmed yet?

Good! If you don’t have answers to all of these questions, then you’re probably not ready to invest. That’s not to say that you shouldn’t! Investing can be a lot of fun and incredibly rewarding. Just know exactly what you’re getting into.

Investopedia provides a great basic tutorial on investing for students. Most of the answers to the questions above can be found within the guide.

If you’ve already dipped your toes into the investing pool, make sure that you’re well-equipped. My best advice for you is to read a lot. Ask your Econ major friends for books from their favorite investing professionals. Get familiar with tools such as Yahoo Finance and Morningstar and use them to make well-informed decisions. Investing can be lucrative, but it can also break you if you’re not careful.

  • How do I pay off these student loans?

We’ve all heard that the best way to pay off student loans is to budget for it. It sounds like a simple enough solution, but what if you seriously can’t afford to pay off thousands of dollars in debt for the rest of your life?

Most have heard of deferring debt or freezing payments until you’ve found a job. Others are able to control their payments by choosing options where no more than a certain percentage of their income is expected to go towards paying off student loans.

Read about these and other good options for paying off your loans on MoneyCrashers.

There’s another option out there that you may not have heard of that some first-gen students have found to be the solution to their loan obligations.

“I was lucky enough to stumble upon a program where my college debts would eventually be forgiven. I don’t know what I would have done otherwise.”

The person above is talking about student loan forgiveness, an option that is available to people from a number of different academic and career backgrounds. The way it works is that people in fields that qualify as “public service”—teachers, nurses, artists—are eligible for loan forgiveness after a specified number of years of on-time monthly payments.

Your dream of becoming a social worker doesn’t have to be crushed under the weight of crippling school-related debt.

Sounds awesome, right?

You would think that plenty of people would be signing up for programs like this. In reality however, they’re rather underutilized. So much so that in 2013, the Consumer Finance Protection Bureau (CFPB) launched a new campaign specifically to educate people about this option.

Read more about this initiative here.

Keep in mind that not all loans are eligible for the same type of forgiveness, cancellation, or discharge. Still, it is important to investigate your options. The best things for you to do may be the option that most people around you haven’t heard of.

Homework time! Tell us about your unexpected challenges as a first-generation professional and how you solved them. Share your creative solutions to the confusing things about being a grown-up in the comments section below!


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