Singletary: Settling into your first job? Here are five things to do with your paycheck

I've been dancing spontaneously because, finally, 15 months after graduating from college, my son has found full-time employment — like a real job.

He starts after Labor Day as an auditor with an accounting firm. His younger sister, who graduated in the spring, is also starting a new job. She's a kindergarten teacher. Now all three of my 20-something kids — the eldest is a therapist — are fully employed.

Can I get a hallelujah?

Next comes the part where my husband and I guide them on what to do with their real-job money. And by saying "real," we older folks don't mean any disrespect. But it gets real when your paycheck is carved up for expenses your parents used to pay.

Our children know how to save and spend well. Their money management training began as soon as they could talk and started to ask for stuff.

Still, our financial teaching isn't over. I assumed after 25 years of their mother writing a personal finance column and them being dragged to financial workshops, they wouldn't need much more guidance once they started working full time.

Silly me.

Practice is always harder than theory.

So, here are five things to do with your money when you get your first full-time job.

Automate your savings immediately

You're in the big savings leagues now. You're not saving for short-term goals, such as an outfit or a concert.

Your roommate might move out unexpectedly, leaving you to cover all the rent. There's going to be a $1,500 car repair. In years to come, perhaps a down payment for a home. Maybe you want to start a small business.

Elect to direct a specific percentage of your pay to savings each pay period.

Yes, every single paycheck.

The best way to ensure you aren't tempted to take a paycheck off from saving is to instruct your employer to direct some of your pay to a dedicated savings account or multiple accounts.

Right now, it's more about establishing a lifelong habit of saving than how much you save.

Set up different accounts for your money

I'm a pot person.

No, not that pot. (I get high off saving.)

I like having different money pots. It helps me compartmentalize my saving goals. It also prevents me from dipping into a designated pot for something I don't need.

I have my pay automatically going into three bank accounts — a checking account from which I pay household expenses, an emergency fund set up at a credit union (in case I lose my job), and a "life happens" fund to cover such unexpected expenses as a major car repair.

As an alternative, you can do what my educator daughter is doing. She has set up an automatic transfer from her main checking account into a savings account at a different bank. She says she wants to see all the money before it gets sent to her various pots.

I only carry an ATM card for the household account.

With the advent of payment apps, it's now easy to get around the ATM strategy. So if you load the apps for your financial institutions on your mobile device, discipline yourself to avoid clicking money out of your savings accounts on a whim. Don't connect any payment apps to your savings pots.

Start saving for retirement immediately

Want to be a 401(k) millionaire?

Aim to contribute as soon as you can at least 15% of your gross income to your retirement plan, a percentage recommended by Fidelity Investments, one of the largest managers of workplace plans. The 15% might include a combination of what you're putting in and a matching contribution from your employer.

If you can't contribute that much, begin with 3 to 5%, and then increase your contribution as you get a pay raise or bonus.

If your first employer doesn't offer a 401(k) or similar workplace plan, you can still save for retirement through a traditional IRA or a Roth IRA. Instead of setting up an account through your employer, you'll have to contact a financial company and open a retirement account. For 2022, the annual IRA contribution limit is $6,000.

One more thing, don't cash out your retirement account when you move on to another job. If you like the investment options at your old job, let the money be. If not, you may be able to roll over the money to your new employer plan or a rollover IRA.

Aggressively attack debt

If you came out of college with debt, make paying it off a priority. If you have credit card debt, it's even more paramount to get rid of it now because of rising interest rates.

Use your 20s to become free of debt that gets more expensive the longer it sticks around.

Focusing on the debt might mean less money available to save for retirement. That's OK. You still have decades to catch up. The caveat is if your employer offers a match for your retirement savings, put in enough to get the match. Then focus the rest of your extra funds after expenses on paying down the debt.

Don't spend what you don't have to

Keep the clunker car you've been driving.

You don't need to dress to impress. One thing we've learned from the pandemic is your work clothes don't define you or your success.

In the U.S., financial independence is seen as unachievable without living on your own, even if it means being crushed by exorbitant housing and living expenses. You are not failing as an adult if you can live at home. It's an opportunity to build a savings cushion or make a dent in your debt.

Adult children can also save on health insurance premiums by staying on a parent's plan, assuming the parent is willing and can afford to keep the dependent child coverage.

Generally, under the Affordable Care Act, you can stay on your parent's plan until you turn 26, even if your employer offers coverage.

But make sure you have access to the same provider network if you don't live in the same area as your parent.

Do all these things now, and you will position yourself for real prosperity.

Singletary is personal finance columnist for the Washington Post.