Dinero Teens:
Your First Paycheck:
What All Those Deductions Mean

Getting your first paycheck is exciting—until you realize the number is smaller than expected. Where did the rest of your money go?

The answer: deductions.

Deductions are amounts taken out of your paycheck before you get paid. These can include:

• Federal taxes
• State taxes (depending on where you live)
• Social Security
• Medicare

This means your gross pay (what you earned) is different from your net pay (what you actually take home).

Why This Matters

Understanding your paycheck helps you:

• Budget better
• Avoid spending money you don’t actually have
• Learn how taxes work early

Quick Tip

Before spending your paycheck, look at your net pay—not your gross pay. That’s the real number you’re working with. Be sure to set some aside for savings as well. Use the Goal Setter tool within your checking account to save for different goals and watch your money grow.

Your first paycheck is more than money—it’s your first lesson in real-world finances.