One of the complaints of teens and young adults’ education is that they aren’t taught basic personal finance and life skills. It’s not commonplace in school to go over things like how to get a job, apply for college, or write a check.

Parents are from a different generation, so even if they’re doing well financially, how they started out in life is likely quite different than you. The economy has changed. Wages haven’t made significant increases. Tuition is more expensive.

So what do you need to know?

How do you begin life as a young adult and set yourself up for financial success?

Here’s a few financial tips to help you get started.

Save, Save, Save

When you’re a kid and have summer jobs or get an allowance, often that’s just extra money for you to spend. So when you have extra money as an adult, you may be inclined to spend that on things you want instead of saving it. Even if you have a lot of extra income, you never know what might happen in life. Saving helps ensure that you are at least slightly more financially prepared for the unknown.

For example, the covid pandemic was unexpected. Many people have lost their jobs, had their hours cut, or have extensive medical expenses. If you don’t have savings, losing your job could cause financial ruin. We’ve been saving for years and know that if I lost my job, we would be fine for awhile till I found another. Getting in the habit of saving is better for you in the long run. If you’re always spending, you probably impulse buy because you know you can afford it, but when larger expenses come along such as an opportunity for a fun trip or unexpected vehicle maintenance, you might not have the savings you need for those.

Know the Difference Between Good Debt and Bad Debt

In general, avoiding debt is the best option, but sometimes you just can’t avoid it in order to move ahead in life. So if you must be in debt, it’s good to know which debt is more harmful than others. For instance, I have student debt. This is considered “good” debt. It doesn’t absolutely demolish my credit score like credit card debt or a car car loan would. Mortgages are also considered good debt. But pretty much everything else is bad. So essentially avoid debt, but if you have to go into debt, student loans or mortgages are better than credit card debt or car loans.

Know Image Isn’t Everything

Image is incredibly important to many people. One of the financial tips that’s really more of an overall lifestyle tip is image isn’t everything. We’ve met many people who care so much about their image and keeping up appearances that they are basically broke and end up looking stupid because they can’t afford basic things.

And to be quite honest NO ONE CARES if you think you look cool. 

Don’t make big purchases or live your life based on how you think other people perceive you. You do what makes your life more happy and fulfilling. Don’t spend money to get approval from others.

If you have a brand new car, it doesn’t really matter to anyone. But the debt you put yourself in from buying that new car you can’t afford will matter to you in the future.

If you make over $100k a year and can’t afford regular apartment rent, you need to change your lifestyle. I remember having to loan some people money because they couldn’t pay rent on time because they could not make good financial decisions. This was when I was a student by the way, so my income was nonexistent. I had enough savings, so I was doing ok. But honestly, if you’re borrowing money from a student, you’re doing something way wrong. This leads me to my next point. 

Don’t Borrow Money from People

Seriously. Circumstances like suddenly getting cancer and needing financial assistance are exceptions. Overall, don’t borrow money. If you’re borrowing money to pay rent because you budgeted wrong, then you messed up. If you’re constantly borrowing from people, they probably won’t like you much, especially if you don’t pay it back or pay it back late. Just make sure that you’re making smart decisions so it never gets to the point that you need to borrow money from anyone.

Budget

Paying attention to income vs. how much you’re spending is crucial to financial well-being. Obviously if you’re spending more than you’re making you’re going to go into debt and struggle with getting ahead. If you’re spending the same amount as you’re making, you’re also more likely to go into debt when unforeseen events occur. If you’re not saving, you won’t end up improving in financial stability. Budget so you have enough for necessities and saving/investing. The leftover income can go towards fun stuff, charity, or even more towards savings.

Budgeting looks different for everyone. We don’t follow a strict budget, but we make sure we have enough to pay bills before spending on fun things. Our lifestyle is pretty consistent and routine. Usually we know what we’re going to spend money on. We pay the bills, buy what we need, and keep the rest in savings. That way when a new expense comes up, we have enough stashed away to not even need to be worried about it. However, we’re always concerned about finances, so even when we can afford to spend money on something, we don’t like to.

Invest in a Retirement Account

This is one of the most important financial tips for your future. You’re probably not thinking about retirement because you’re young and that’s way in the future. It’s likely you’re more worried about having a job than what happens after your career is over. Yet if you start investing in a retirement account now, you will ultimately save so much more than if you start later. You don’t have to put a massive amount of money in each month. You just need to open an account as soon as you can. I don’t explain it as well as Evan can, but basically, what you put in multiplies over time, so the longer it’s in there, the more return you’ll get from the investment. If you put in a little bit now, it will make more long term than if you put in a lot later.

Gain Credit Early

This is another financial tip that’s future-focused. If you’re just figuring out how to build credit when you’re trying to buy a house, it’s a little late. Your credit score matters when it comes to mortgages, rent, or buying vehicles on payment plans. Credit card debt is bad, but credit cards can be good. If you get a basic credit card early on, pay on time, and don’t rely on it, you will build credit easily. Evan is more strategic about building his credit, such as getting a second credit card to improve his score. I keep it simple and just stick with the one.  Your credit score is one number that can either prevent you from getting things you want or it can help you. It depends on your actions for keeping it high or pushing it low.

Conclusion and General Financial Tips

This is just a brief overview of some of the financial tips Gen-Zers need, but might not be aware of. Obviously there is so much more information for each of these topics out there. This post should really just serve as a list of points to dig into more. It’s not meant to be the be-all end-all guide for personal finance for Gen Z. I’m sure we will go more into these financial tips in future posts, but for now this is just to throw out a few basic things to know.

In addition, here are three general tips we have for taking care of your finances as a young adult or teen. If you have specific questions on any of these, feel free to DM us on Instagram or send an email to maisy@cutecannycouple.com. We have a contact page here, but it tends to get spammed and we might not see your message as quickly as we’d see an email or DM. For more info and tips, check out our Personal Finance Category for posts such as How to Engage in Smart Spending.

  • Always Have Back Up Plans
  • Think of the Future
  • Research
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Maisy
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Recent graduate, blogger, girlfriend, dog-mom

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