One challenging thing about becoming a young adult is having to figure out the whole money thing.
If you didn’t learn anything about money and personal finance while growing up, making the leap into adulthood where you have to manage your own funds can be petrifying. My main lesson about money was never spend it, which led to a weird kinda squandering mindset. That’s not enough to get you through life.
To help you, here are 10 tips and lessons on managing money as a young and single adult.
Pull up a chair, grab a glass of wine, and let’s have a chat.
One more thing before we get started…
My goal for 2018 is to help as many people as I can escape living paycheck-to-paycheck. This no-spending related list is one tool to help you do that.
I’ve also created a free 3-part video series on escaping the paycheck-to-paycheck lifestyle. You can grab that by signing up below!
Tip #1. Know that comparison is the thief of your cash.
Comparison is your very worst enemy when managing money. Don’t let anyone else impact your lifestyle and spending habits. It leads to a never ending cycle.
Instead, lay out personal goals you have for your money. This way you won’t make moves that are conflicting with where you want to be.
Say your lifelong goal is to quit your job and start a non-profit, but you’re thinking about buying a house first. I mean, everyone in their 20’s buys a house. Right?
Would buying a house right now really be a step towards your goal?
Maybe or maybe not. You need to decide based on your life.
Tip #2. Fall in love with your budget.
Budgets are like the relationship you have with that perfect person you’ve been friendzone-ing for years.
It’s always in the back of your mind. You know taking a chance on it will change your life, but you’re scared of committing, failing, and then facing disappointment.
Trust me, after reaping the benefits of budgeting, you’ll fall into a happy and fulfilling relationship with it.
The problem is the word budget.
It’s synonymous with poor, broke, lacking, or destitute. Saying you’re on a budget feels like you’re admitting that you’re struggling. Nobody wants to do that, especially today when it feels like everyone is putting up a facade.
A budget is nothing more than having a strategy for managing your money. Millionaires and billionaires have budgets. Successful businesses and companies have budgets.
If the word budget throws you for a loop, call it a money plan, money strategy, money schedule, or something extra saucy like a “leveling up my life” plan.
Tip #3. Don’t trim off too much fat.
Now that we’re on the topic of budgeting, I want to be clear that cutting out everything you love from a budget is not something you should do.
Giving up everything for the sake of being super frugal and saving money will not sustain you for long-term.
You’ll get budgeting fatigue and you’ll start to resent it. When you resent money you eventually do something crazy like buy a Corvette when you’re earning VW Bug type money.
The extras you keep in your budget will depend on what you personally value. Budget in things like coffee shop coffee if you like it.
I’m someone who cuts coffees, eating out too often, or getting my nails and hair done for events like concerts, festivals, and travel. I’d rather cut everyday luxury stuff to save for larger experiences.
I know people who are different and think I’m completely crazy. They prefer to spend more money on personal grooming related things and fashion than I do.
There’s no right or wrong answer.
Tip #4. Keep your lips zipped.
Guard your intentions and goals. There are two schools of thought on this point.
One is to shout out your goals constantly in an effort to make them happen. Basically the Kanye school of thought. He’s been speaking his musical genius into existence for years.
I personally subscribe to the school of keeping goals secret because of my own experiences. Why?
You may get resistance when you tell others of your money plans which can deter you from making progress. People usually think your ambitious goals are unrealistic and even silly until they see some results.
This resistance probably has nothing to do with you. It usually has everything to do with self doubt that the person you tell your goals to is dealing with.
Pick a few trusted, ambitious, and encouraging friends to share your money goals with instead. People who will understand and who won’t get on their high horse and talk down on you for living on a budget.
Tip #5. Never take anything at face value.
In the U.S., we’e not taught to negotiate, but you can always negotiate on price or ask for deals.
When you’re at a retail store, make it a practice to ask if there’s a coupon or discount available. You can even go to sites like RetailMeNot to find coupon codes.
When you’re signing up for services (telephone, etc.), speak with a few people before signing up to see if someone’s willing to offer you a deal.
You can also use comparison sites to find the very best price on stuff like utilities.
Be bold with this. Unless a company is offering a highly public promotion to all customers, they’re not going to willingly tell you opportunities for savings.
After all, they want your money.
You will need to dig out the deals. And when you do, you’ll have much more money to devote to other stuff like saving for emergencies or repaying your student loan.
Tip #6. Think about the golden years.
We don’t really like to think about old age or death when we’re young, but it’s something that’s inevitable. We need to plan for it.
Growing up is inevitable and the sooner you start saving for it the better.
Tip #7. Start minding your credit early.
Credit is something you should pay attention to at all ages. One of the many factors considered to calculate your credit scores are the length of your credit history.
Of course, to have a long credit history you have to start now. If you’re new to credit, you can sign up for a secured credit card to start building.
The one thing you must, must remember is to always pay your bills on time no matter how small the amount is. I learned this the hard way.
If you run into trouble and can’t make a payment, be proactive. Getting in contact with your creditors promptly can lessen the consequences.
Tip #8. Ask for help.
You may think getting financial advice is outside of your budget. Not the case.
LearnVest is an example of a website the offers one-on-one financial planning affordably.
You may also find a local financial advisor who’s willing to take you on with limited assets. Another area where you can can benefit from an advisor is during tax season. You can do taxes yourself with various services, but if you have questions about your filing you should speak with a professional.
You’ll be glad you did. The penalties for not paying enough taxes or filing incorrectly can be steep. And hiring a tax advisor can be quite affordable. Two years ago I worked with a tax professional and it cost a little over $100.
Tip #9. Don’t feel ashamed to live at home.
At some point we put a stigma around living at home with our parents. Our society tends to vilify young adults that have a support system they can fall back on. Bootstrapping it on your own is a sexier story.
I’m here to tell you there’s nothing wrong with living with your parents for a period of time while you get your feet on the ground.
Don’t get me wrong, mooching off of your parents probably isn’t the way to go. But if you have the luxury of reducing your housing expense, do it with no shame as long as you have a plan.
Save money while you’re home, pay off debt while you’re home, and experiment with different career paths while you’re home.
There’s no need to struggle if you have a place at your family home where you can have some stability.
Tip #10. Amass possessions slowly.
When you do move out for the first time, don’t feel pressured to decorate your home to the nines if you can’t afford it. It can take people years to make a house feel like a home.
Debt in our country grows and grows as it becomes easier to finance things.
Be careful of falling into a sea of debt for things that you don’t really need.
Do what you can with what you have and build slowly.
There’s no harm in investing in one or two things (a bed or couch) that you can pay off diligently, but there’s no need to go wild when you’re just starting out.
Tip #11. Use your skills wisely.
Although the job market sucks, I refuse to take it laying down. You shouldn’t take it laying down either.
If an employer can’t pay you enough money to help you save, pay off debt, or live the way you want, bring in other money. There are the usually ways to make extra money like signing up for Uber, Lyft, or Amazon Flex.
I personally believe that putting other skills to use and creating your own side business can be more lucrative and less of a hassle. A side hustle like the ones above are ones where you’re still working for someone else.
A business you create is one that can grow into something larger and one that you control the money that you’re able to earn.
I share a few tips on how to start and grow a side business in these posts:
- How to Start a Lucrative Side Business
- How to Double Your Side Income
- How to Find Your First Side Hustle Client
- How to Get Paid for Things You Do For Free
- How to Overcome Fear to Start Your Business
Adulting is Hard Until it Becomes Easier
It’s funny how we all want to be adults until it actually happens. The good news is, once you get the hang of budgeting and managing your money it gets a lot easier.
So my challenge to you is to choose one or two tips from this list and get started.
One I suggest starting out with is creating a budget because that’s a key element for any money strategy!
Oh, and VTX Capital has an awesome post on how to save money. Check it out as well!
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A series on how to leave the paycheck-to-paycheck lifestyle behind.