This post shows you the best personal finance tips for young adults!
Looking for real-life advice on how to navigate personal finance? The landscape of money has changed but the path to financial independence is the same!
Ever wonder why some people seem to earn less but have more while others earn more, yet it never seems to be enough?
People seen as financially independent receive a lot of speculation, almost as if they are hiding a big secret.
Well, the secret is personal finance! And that freedom they have today is from seeds planted yesterday.
It’s rare to find personal finance tips that are tailored for young adults but sometimes it’s helpful to hear from someone who has been through it.
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Now I’m not a financial advisor or expert and you definitely shouldn’t take this post as financial advice.
But I am a 35-year-old single female homeowner with no debt or car payment, and I’m able to save and comfortably invest over $1000 monthly.
And I did this making only 65K a year.
If you’re looking for actionable ways to set up your financial future, here are the top things I did in my 20s to gain financial independence.
Does it delay gratification and suck a little bit? Maybe. And I get it, driving a hooptie may not be glamorous and it sucks being the butt of jokes from your friends.
But you know sucks even more? Eating tuna and living on a prayer at the age of 70.
The Top 10 Personal Finance Tips for Young Adults To Do Right Now
1. Stop Listening to Broke People
Misery loves company. If you know you have financial goals that you want to achieve, no matter how delusional they seem, then you can achieve them.
Mindset is the #1 thing that prevents people from achieving their dreams.
So if you decide you want to become a millionaire, and you get snide reactions from friends or family, it’s time to distance yourself, cut them off completely, or learn how to keep your goals to yourself!
Surround yourself with ambitious people in personal finance community groups on social media.
Make sure you’re viewing content that is aligned with your future so you can manifest it into reality!
2. Stop Wasting Time and Money
It always starts with what you think are innocent purchases. A new subscription. An Amazon package here, a small iced coffee there.
Not only are these things you can do without but you are probably more productive and creative without.
Make sure you spend more time learning than scrolling. Take a free course. Learn to sew. Go to the gym. There is an entire world of discovery out there!
When I started my debt-free journey, I took up freelance writing for extra income and learned to write for different industries.
Not only did it increase my cash flow, but the experience helped me transition to a new career!
3. Learn Basic Finance
Listen. If you can’t successfully manage $1,000 in your account, you won’t be able to manage a more substantial amount of money either.
Learn everything you can about budgeting, taxes, saving, and investing.
You need to be as aggressive as a bill collector with your financial future.
You don’t have to take a class in college or read a textbook but get comfortable with basic financial terms and concepts.
Once you understand how money works, you can start applying those financial tools (which don’t change by the way) to your own life.
4. Pay Off Debt Like Your Life Depends On It (Because It Does)
Learn from the millennials with suffocating student loan debt.
Before you think about taking out loans for a business, house, or school, you need a real plan to get out of debt.
If you’re in the hole, now is the time to come to terms with it and make a plan to start paying it off. It’s usually not the debt that’s too bad, but the interest rate that keeps people on the hook.
Take a deep breath and call your credit card company, student loan servicer, or car dealership.
Most people are willing to work out a hardship payment plan or reduced interest rate for those who are making an honest effort.
4. Harness the Power of Roommates
I didn’t realize so many people looked down on having roommates until I got on social media. I admit I had roommates until I was 34 before I bought my house.
Luckily these were friends at the time and I was able to save money while still taking vacations throughout the year.
Social media is great at illusions of grandeur, independence, financial wealth, and having things figured out by the time you’re 25.
Here’s the truth: None of that stuff is real. No one makes it without community or some type of help.
Rent or a mortgage will take the biggest chunk out of your paycheck so being able to split with a roommate is amazing.
With a temporary roommate, you can easily save money in one swoop and probably still have some fun money in your budget left over!
5. Increase Your Main Income And Never Get Too Comfortable
If you have reduced your bills all you can and you’re still on the struggle bus, it’s time to get serious about other options.
To make more money, you have to reduce your expenses or increase your income. It’s really that simple.
Look at your work experience and start a targeted search to apply for other jobs that you can qualify for. Build a network of mutually beneficial relationships.
When I decided to transition careers, I took on a low-paying contract for 6 months.
That small sacrifice was the catalyst to my career transition and I now make 80K a year, which is a huge accomplishment for me!
Avoid applying to “trendy” companies that will lay you off next week and apply for the boring companies with stability. Learn new skills by working for a start-up. Or take on a contract for a dynamic career change!
Continue to learn new skills, invest in a creative side hustle, and shoot your shot.
6. Pay Yourself First
I don’t care what Bob and Sue are doing, as soon as you get paid, you need to automate money going to another account.
In these times, an emergency fund makes the difference between being laid off and sustaining yourself until you find another job.
I highly recommend having a traditional bank like Chase as well as a credit union that you can send automatic transfers to so you don’t even have to see the money leaving your account.
Whether you’re saving $500 a paycheck, or $5, you have wiggle room somewhere and you need to pay yourself on time, every time!
7. Invest Early with a Diverse Portfolio
Investing into new assets may seem risky.
The real risk is never harnessing your creative energy to bring wealth and abundance into your life!
I try to eliminate risk through diversification. This simply means don’t put all your eggs in one basket.
Here are some ways I’m investing:
I contribute to my 401K, Roth IRA, and HSA with company matches. But I also have room to tolerate risk and have small investments in cryptocurrency, in an extremely volatile market.
Investing doesn’t just mean the stock market. You can invest in your financial education just by watching personal finance videos on TikTok.
Invest in your health, your craft, or professional development at work.
8. Find an Additional Stream of Income
I am a huge advocate for the traditional 9-5 with benefits but I also think a separate stream of income is necessary.
Who are you and what kind of energy do you want to put out into the world?
For me, my first love is writing. Blogging is a perfect additional stream of income for introverts and I love to help others which spurred the idea for this blog.
You may be great at content creation, artistry drawing, or crafts like sewing and fashion. It just depends on what you genuinely enjoy doing or what you have a passion to learn.
The world as we know it is coming to an end. Harness your creative energy and bring in income based off your talents. Learn who you are, the legacy you want to leave, and lean in!
9. Don’t Buy a Car You Can’t Afford
Too many ppl look only at the monthly payment and not maintenance and insurance, which can vary dramatically depending on where you live.
Try to buy privately from an elderly couple. Usually, these cars are reliable, well-taken care of, and probably don’t have a lot of miles. They also aren’t trying to scam you.
People always had something to say about the old car handed down to me but that car was the foundation that allowed me to build wealth for myself.
When it comes to personal finance tips for young adults, this is the one you want to remember!
Take public transportation or buy private if you can. If you must buy brand new, do your in-depth research before you even think of stepping foot in a car dealership.
10. Learn to Fail and Fail Fast
The point of being young is that you can be dumb but still have plenty of time to recover from your mistakes and figure it out.
So while you have the time, don’t waste it by playing small and caring about what others think and waiting for their validation. Because you’ll never get it!
Change careers.
Go to that networking event.
Start that first business and let it fail.
Failing is how you learn. No one ever got it right on the first try. But the earlier you try, the more time you have to bounce back. The only time you fail at life is when you never try in the first place!
