Form W-4

Summer Jobs

My first summer job was mowing lawns for a family resort in northern Minnesota. I was handed a check at the end of the week, and the first thing I did was run to the bank and cash it!  I subsequently spent all of it over the weekend, only to be broke again Monday morning.

The Consumer Financial Protection Bureau says “Having a summer job is an important milestone and often when young people first take control of their finances..”

A Healthy Financial Starting Point

Paycheck Management:

  • First thing: Where to put that money made from that summer job?  Don’t spend it like I did!  There are several credit unions or banks to choose from.  Having cash on hand can be dangerous, because if the money is there, ready to be used, and it’s more likely to be spent.  It is best to deposit the entire check into a bank or credit union,  then only allowing a small amount of spending money.
    • What is the difference between a Credit Union and a Bank?
      • Credit Unions: Personable; higher savings rates; not-for profit
      • Banks: Convenient; lower savings rates; for profit
  • Direct Deposit is king!  Deposits can be made into various savings accounts automatically.  Both banks and credit unions offer this, or another option is to set up a direct deposit to an online bank (not having a brick & mortar location at all).

Cash Flow Management:

  • Budget: Which is defined by “an estimate of income and expenditure for a set period of time.”  There are several apps, spreadsheets, and analysis tools to figure out how to spend money.  Figure out and plan what those expenses will be, don’t overspend!
  • Expenses:  Expenses play into a budget with forecasting, but it is also important to track where the money went.


  • Saving 10% of all income is a good rule.  So, if the paycheck is $200 then set aside $20 for the emergency fund.  Gifted a cool twenty dollar bill, make sure at least two dollars get into savings.  These small amounts will add up fast!  Direct deposit allows an easy automatic withdraw of a percent or set dollar amount to go into a separate savings account.
  • Have a plan for those savings too.  Is the goal to save for college, a car, or even an early emergency fund?  Try to explore various options for higher interest rates.
    • Savings Bonds
    • 529 Plans
    • Online only savings account

Check out my article on completing that Form W-4 and getting the correct amount of withholding set up so you aren’t smacked with a bill at tax time.

Most importantly make some friends, make some memories, and save that money!

What was your first job?


Where to find a Withholding Calculator

Did you fill out that W-4 form right?  Will you have enough withholding, owe at tax time, or will you get a huge refund?  A huge refund in’t necessarily a bad thing but it is an interest free loan to Uncle Sam.

What is a Withholding?

You get paid, Uncle Sam takes his cut, that is what withholding is.  Either you pay as you go or you owe a lot at tax time and if you don’t pay as you go then you may owe penalties on top of those taxes!

Have your current pay-stub handy, and your recent tax return, if you don’t have this info and want to estimate it just know that the results are only as accurate as the data entered (remember garbage in = garbage out).

Here is the website for the calculator on withholding.  If the results scare you then you can easily change your withholding by printing a new Form W-4  and submit it to your employer.  Some companies have websites that allow a user to log-into and update the withholding with a click of the mouse.

If you don’t know how to fill it out then you are in the right place because here we go:

The personal allowances worksheet gives you an idea of how many allowances you should be claiming.  Most people write zero  in items A though H to offset any taxes and get a large refund.

If you are married, both spouses work and have kids the calculation can become more complex.

A New Summer Job! Now fill out this W-4

You finally got that summer job and they give you this W-4 Form that they say fill it out, but how?

Ask Mom and Dad?  They don’t know either because they haven’t filled one of those out in years…

Ask the boss?  Well, you just got the job and don’t want to look like an idiot.

Here is how you do it.

We’ll just work from top to bottom front to back.

Personal Allowances Worksheet:

A:  Enter “1” for yourself if yo one else can claim you as a dependent:   Enter 0 (that is a zero) because most likely your parents are claiming you.

B:  Enter “1” if your single and have only one job; or your married, have only one job, and your spouse doesn’t work; or your wages from a second job or your spouses wages are $1,500 or less:  Enter 0 (another zero)