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How to Be an Adult: A Step-By-Step Guide to Getting Your S#%t Together

New freedoms and new responsibilities can feel super overwhelming for a new grad. But worry not! It's easier than it seems to spend your income responsibly, prepare yourself for financial emergencies, and save for retirement. Here's our step-by-step guide on how to be a financial adult.

Being a young adult in 2023 is no picnic. You (mostly) don’t know what you want to do, your love life’s a slow-motion disaster film, and your parents keep asking when you’re going to settle down/get married/go to med school.

Oh, and you’ve got crazy student loan debt, inflation and housing prices are through the roof.

It’s enough to make you feel like this:


It doesn’t have to be this hard. While we can’t tell you how to figure out what you want to do with your life, or get you to stop drunk-texting your ex,  we can definitely help you get your finances in order.

Here’s how to be an adult. On paper, at least.

1. Pay Yourself First


It’s a personal finance cliche, but it’s still the first step on the road to financial stability. Saving money often feels like deprivation — you can’t buy stuff you want. But if you change your mindset, and see saving as an investment in (pretty near) future you’s health and happiness, it makes it a lot easier.

How to pay yourself first? Here are a few ideas:

Save at Least the Bare Minimum for Retirement

Ideally, you’d be putting away a significant amount of money toward your golden years, but we know you’ve got bills: Those fat monthly payments to Sallie Mae, as well as rent, food, and the (more than) occasional night out.

But one of the few advantages (financially speaking) of being young is that you’ve got decades until you’re going to need your retirement money. Thus, every dollar you put away now will be worth more at retirement than dollars you put down in 10 or 20 years, when you’ll be farther along the slow crawl to the grave — and thus more flush.

Why? Compound interest. With time, your money earns interest, and then that interest earns interest, and then the interest on your interest earns more…you see where this going. Time is on your side on this one.

So what’s the bare minimum?

If your employer offers a match, contribute as much as you need to get the maximum match. For most of you, this will be 6%, with an additional 3% coming from your employer. Free money!


And with that, you’ll be almost halfway to the 20% savings rate that we recommend at Money Under 30.

If you start right out of school, it might even be enough for you to have a year’s salary saved up in your 401(k) by age 30.

And because that 6% comes out pre-tax, you won’t feel as much of a pinch in your (slightly) reduced paycheck.

What if your employer doesn’t offer a match?

Then you should open up a Roth IRA and aim to max out your yearly contribution. Since you’re young, and probably not making a ton yet, you’ll be paying less in taxes than you will later on. Contributions to a Roth IRA are done with post-tax money; withdrawals you take in retirement are tax-free.

Set Up an Emergency Fund


An emergency fund is important for a lot of reasons:

  • Stuff happens. And often, it’s expensive stuff.
  • A solid emergency fund makes you less likely to raid your 401(k) or IRA, which means those investments can appreciate without interruptions or withdrawal penalties.
  • Psychologically, you’ll be less stressed because you know that you can handle anything — whether a new set of tires or your pet’s expensive dental work — without going into debt.

You might not have a ton of cash to put aside right now. But even setting aside small amounts can help, and small amounts eventually add up to big(ish) money.

An app like Digit, which analyzes your spending and transfers small amounts to savings when it thinks you won’t notice, is a great way to start, especially if you favor a hands-off approach to your finances. Digit takes advantage of your lack of attention, and uses it to help you save.

If you’re the more hands-on type, then consider setting up your own high-yield savings account. By putting your money in a separate account, you set up a nice little psychological barrier between you and it, meaning you’ll be less likely to spend your emergency fund on impulse buys. And the interest your money earns will help offset inflation.

Build a Bank Account Buffer™

Cat jumping onto beanbag.

If the idea of saving several thousand dollars seems far off, aim for the bank account buffer™ first.

Think of it as a mini-emergency fund, or a cushion of cash you keep in your checking account, and that you never spend. No fun, right?

It’s not much fun, but it can keep you from having to worry about whether the landlord will deposit your rent check before your next payday. It also protects you from overdraft fees, which means being broke won’t make you even more broke.

It can be $500, $1,000, or equal to the amount of one paycheck. You don’t want your bank account buffer™ to be too much money, because you’ll be missing out on the interest that money would otherwise be earning in a high-yield savings account.

2. Get Accustomed to Living within Your Means


Money Under 30 founder David Weliver got into $80,000 in debt before he was even 25. How did he do it? The way we all do: Spending more than he earned.

When you’re young and making real money for the first time, it can be hard to tell yourself no. But indulging every whim now means it’ll be even harder to reduce your spending later on. There’s no time like the present to develop healthy spending habits.

Track Your Spending

I know, I know. I can already hear the resistance. Tracking what you spend is no fun (or at least it’s no fun unless you’re a little bit compulsive), but it’s also pretty much the only way to get a handle on your finances. If you don’t know where your money goes, how can you hope to know where you can — or should — cut back?

If you don’t want to do the most tried-and-true method, Ye Olde Spreadsheet, then perhaps let an app do it for you.

Wait Three Days Before Making a Big Purchase


Telling yourself “no” all the time gets old. Eventually, you’ll break down and start saying “yes” to everything.

Instead, tell yourself “not now.” By offering your acquisitive impulses delay rather than denial, you’ll dull the edges of their disappointment. They can have what they want — they just have to wait.

You’ll usually find that, at the end of three days, the desire itself has dissipated.

In its place? Relief you didn’t buy that kinda ugly sweater, or the gadget you’d get bored with in two days.

Don’t Budget. Instead, Figure Out Your Discretionary Income


Budgets work great for some people, but not for most of us. Why assign an arbitrary limit to what you spend on groceries? What if you need toothpaste but you’ve already maxed your “toiletries” budget? Is financial responsibility worth having rancid breath until next month?

Instead of putting limits on unpredictable categories, figure out what you have left over to spend after you’ve paid all your bills (rent, utilities, insurance, debt payments) and put some money into savings.

Then, spend what’s leftover on whatever you want. You’ll still have to make choices (often difficult ones) but you won’t be constantly bumping up against arbitrary limits that have nothing to do with your dynamic life and interests.

3. Plan for the Future (and the Unexpected)

Start Building Credit

Building good credit takes years — seven of them, in fact. Even if you don’t plan on buying a house anytime soon, it’s good to start thinking about your credit score. A high score will get you the lowest rates available when you take out a car loan or mortgage, and may save you thousands of dollars over the life of the loan.

There are a few ways you can build credit for the first time:

  • Get a secured credit card.
  • Become an authorized user on someone else’s card (like a parent).
  • Take out a credit builder loan from a lender like Upstart.

Maybe you’re spooked by credit cards — a lot of people who came of age around the financial crisis are. But credit cards offer benefits that debit cards don’t — namely, credit card companies report your payments to the credit bureaus, and help you improve your credit score.

If you’re worried about overspending, then a secured card credit card might be the best fit for you.

Regardless of whatever credit card type you choose, just remember: Pay your bill on time, every month. On-time payments are the most important element of building good credit. Missing a payment — by even a day — can hurt your score.

Check Your Credit Report at Least Once a Year

Once you’ve established a credit score, then you should keep an eye on it.

It’s not unheard of for errors — like showing missed payments on accounts you’ve always paid religiously, or an outstanding debt you never took out — to show up on your credit report, and those errors can hurt you. Credit reports are often used by landlords and even employers as a means of vetting potential tenants and employees. You don’t want the pristine credit you worked so hard for marred by a computer glitch.

Many banks, including Capital One and American Express, offer credit monitoring as a perk of being a cardholder. Credit Karma and Credit Sesame both offer access to one credit report a month, as well as monthly updates to your credit scores.

Learn more about how credit scores are calculated, and use our credit score calculator to get a sense of what your score might be.

Get Renters Insurance

You may not own a house yet, but I imagine you already have plenty of stuff, and some of it is pretty expensive. Got a nice bike? A laptop? A flat-screen TV? Would it be easy for you replace them if they got lost, stolen, or damaged?

If not (and even if so), you should get renters insurance. Renters insurance is like homeowners insurance…but for renters. It protects your stuff in the event of theft, damage, or loss, and it protects you from liability if, say, you accidentally burn down your apartment building, or leave the shower running and cause serious water damage. (Fun fact: Your landlord won’t just pay for that.)

Renters insurance tends to be pretty cheap, especially if you take out a policy with a digital insurer.

Is the extra security worth adding a $10 charge to your monthly budget? Let me speak from semi-personal experience: A close friend of mine recently lost most of her belongings in a house fire, and her renters insurance made it possible for her to replace the majority of her stuff for free. $10 per month is a lot cheaper than replacing a laptop that went up in flames.

4. Set Some Money Goals

Tracking your spending and telling yourself “not now” will feel somewhat pointless once you’ve got six months of living expenses in your emergency fund and you’re hitting your recommended targets for retirement savings.

That’s when it’s time to start setting savings goals. It could be for a down payment on your dream house, a down payment on a car, or a trip to Europe. It can be saving up money to go to grad school, or to pay for your wedding. It can be all of those!

Capital One 360 has a great feature (unique among high-yield savings accounts) where it allows you to divide your money up into (up to 25) separate accounts. That makes it easy to prioritize different goals, and to see the progress you’re making on each individual one.

Goals are a great way to motivate yourself to save more, and to keep up the momentum you’ve generated while saving for your emergency fund. And, even better, it means you get to save toward fun stuff.

5. Be Patient

In your twenties, it can feel like so many of your goals are out of reach. If you’re not making a ton of money, then saving a ton of money is going to take a while.

Don’t beat yourself up about it. Those small contributions will start adding up to something substantial soon enough, and you should be proud of yourself for making smart choices that will serve you well later in life.


If you’re just out of college, you’re probably overwhelmed by both new freedoms and new responsibilities. Jobs, money, taxes — it can all be too much. But if you start with the basics, some top personal finance products, and do your research, you’ll find yourself well ahead of the curve by the time you hit the big 3-0.

About the author


Lauren Barret

Lauren has operated as a staff writer and associate editor for Money Under 30, covering topics from the cost of graduate school to saving for retirement. She has a MFA in creative writing from The Ohio State University.

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