Money Tools for Teenagers & Young Adults

Money Basics for Your First Job — and Beyond

Most schools don't teach you how tax works, what super actually is, or why your bank balance seems to go backwards. Here's a plain-English breakdown of the stuff that actually matters when you start earning money in Australia.

Your first job and how tax works

When you start a job, you fill out a Tax File Number declaration. This tells your employer your TFN and whether you want the tax-free threshold claimed. Claim the tax-free threshold at your main job (the one paying the most). This means you won't pay tax on the first $18,200 you earn each year. If you don't claim it, your employer will withhold more tax than necessary — you'll get it back at tax time, but that's your money sitting with the ATO all year.

Tax in Australia is progressive — you pay higher rates on higher slices of income. In 2025-26, the rates are: 0% up to $18,200, 16% from $18,201–$45,000, 30% from $45,001–$135,000, and higher above that. Use the Take Home Pay calculator to see exactly what hits your bank account after tax and super. You'll also pay the Medicare Levy (2% of income) once you earn enough to be liable — that funds the public health system.

Super — the money you can't touch (yet)

Superannuation is a compulsory retirement savings system. Your employer pays 11.5% of your earnings on top of your wages into a super fund (this is separate to your pay, not taken out of it). If you earn less than $450/month from a single employer, some employers may not have to pay super — check your situation. You generally can't access your super until you're between 55–60 (preservation age), so it's not a savings account you can dip into.

The most important thing you can do with super at your age: choose a fund with low fees and decent investment performance, don't let your employer default you into a dud fund, and check you don't have multiple accounts from multiple jobs sitting around losing money to fees. The Barefoot Investor is the most practical book on Australian super and money management for people starting out.

The power of starting to save early

This sounds like a lecture, but the numbers are wild. If you save $200/month from age 18 at a 7% average return, you'll have around $960,000 by age 65. Start at 28 instead and you'd have around $490,000 — roughly half, despite only starting 10 years later. That's compound interest. Use the Compound Interest calculator to run your own scenarios and see how time is your biggest asset.

You don't need to invest in complex products. A high-interest savings account for your emergency fund (3 months of expenses minimum), then a low-cost index fund through a platform like Raiz or CommSec Pocket once you have that base covered. Don't chase hot stocks or crypto — it's gambling, not investing, and you'll lose.

Budgeting when you're just starting out

A simple framework: split your take-home pay into three buckets. 60% covers living expenses (rent, food, transport, phone). 20% goes to financial goals (savings, paying off any debt). 20% is yours to spend without guilt. The exact percentages matter less than the habit. Use the Budget Planner calculator to map your income against your actual expenses — most people underestimate what they spend on food and subscriptions.

One thing that kills young budgets: car costs. A $15,000 car doesn't cost $15,000 — add registration, CTP, comprehensive insurance, fuel, servicing, and tyres and you're looking at $5,000–$8,000 per year in running costs depending on what you drive. Use the Car Loan calculator and Fuel Cost calculator before committing.

Tax returns — don't leave money on the table

You must lodge a tax return if you earn above the tax-free threshold. But even if you earn less, it's worth lodging because you might be due a refund if your employer over-withheld tax. Claim work-related deductions: if you use your own phone, car, or tools for work, you can claim the work-related portion. Common ones include: union fees, uniform costs, work-related study, professional memberships, and home office expenses if you work from home. Keep receipts — a shoebox works, or use the myDeductions section in the myGov app through the year.