As your child transitions from an internship to their first full-time job, there are important financial topics to address to ensure they are prepared to manage their finances independently. Here’s a comprehensive guide to the key financial issues to discuss:

1. Budgeting and Money Management

• Create a Budget: Help them create a budget that prioritizes essentials (rent, utilities, groceries), savings, and discretionary spending.

• Adjust for New Income: Teach them how to live within their means and avoid lifestyle inflation as their income increases.

• Emergency Fund: Encourage saving at least 3–6 months of living expenses to handle unexpected events.

2. Salary and Benefits Negotiation

• Understand Compensation: Teach them to evaluate the full compensation package, including salary, bonuses, health insurance, and retirement contributions.

• Negotiate Offers: Encourage them to negotiate their salary and benefits if appropriate, using research on market rates for their role and location.

3. Taxes

• Withholding Forms: Help them correctly fill out their W-4 form to avoid under- or over-withholding taxes.

• Understand Paychecks: Explain deductions for taxes, Social Security, Medicare, and benefits.

• File Taxes: Teach them how to file their own taxes or hire a professional if needed, especially if they have multiple income sources.

4. Health Insurance

• Employer Plans: Help them evaluate health insurance options offered by their employer.

• Parental Coverage: If they’re under 26 and staying on your health insurance plan, discuss the transition timeline.

• HSA/FSA: Explain the benefits of contributing to a Health Savings Account (HSA) or Flexible Spending Account (FSA).

5. Retirement Savings

• Start Early: Stress the importance of contributing to a 401(k) or IRA as soon as possible to take advantage of compound interest.

• Employer Match: Encourage them to contribute enough to their 401(k) to receive the full employer match.

• Roth IRA: If their income allows, discuss opening a Roth IRA for additional tax-advantaged retirement savings.

6. Debt Management

• Student Loans: Review their student loan repayment plan and help them set up payments. Discuss options like income-driven repayment or refinancing if needed.

• Credit Card Debt: Teach them to pay off credit card balances in full each month to avoid interest charges.

• Building Credit: Emphasize the importance of responsible credit card use to build a strong credit history.

7. Housing and Relocation Costs

• Plan for Moving: If their first job requires relocation, help them budget for moving expenses, deposits, and setup costs.

• Evaluate Housing Options: Guide them in choosing housing that fits their budget, whether renting or considering roommates.

• Renters Insurance: Recommend renters insurance to protect their belongings.

8. Transportation

• Car Costs: If they’ll need a car, discuss the full costs of ownership, including loan payments, insurance, gas, and maintenance.

• Public Transit: If they’re in a city with good public transit, help them evaluate monthly transportation costs.

• Commuting Costs: Budget for parking, tolls, or other commuting expenses.

9. Building an Emergency Fund

• Set a Goal: Encourage saving 3–6 months of living expenses for financial stability.

• Automate Savings: Recommend setting up automatic transfers to a savings account to build their fund consistently.

10. Insurance

• Health Insurance: If not on your plan, ensure they understand their employer’s health insurance options.

• Life Insurance: Discuss if they need life insurance, especially if they have dependents or significant debt.

• Disability Insurance: Encourage them to consider disability insurance if their employer offers it.

11. Financial Literacy

• Understanding Paychecks: Help them read and understand their paycheck, including deductions and net pay.

• Basic Investing: Teach them about basic investment concepts and how to start building a portfolio.

• Avoid Scams: Warn them about financial scams targeting young professionals.

12. Savings Goals

• Short-Term Goals: Encourage saving for immediate goals like travel, professional development, or hobbies.

• Long-Term Goals: Discuss setting aside money for a car, home down payment, or other major life milestones.

13. Legal and Documentation

• Power of Attorney: Encourage setting up a financial and medical power of attorney in case of emergencies.

• Beneficiaries: Remind them to designate beneficiaries for their 401(k), life insurance, or other accounts.

14. Career Development

• Professional Growth: Suggest investing in certifications, training, or professional memberships to advance their career.

• Networking: Help them budget for networking events or conferences.

15. Parental Financial Support

• Set Boundaries: Clearly define what financial support you’ll continue to provide (if any) and for how long.

• Encourage Independence: Use this transition to help them take full financial responsibility for their needs.

By addressing these financial issues before your child begins their first job, you can ensure they are equipped with the knowledge and tools to manage their money effectively, build a strong financial foundation, and prepare for future success.