Personal Finance Advice for Young Adults
Managing your money is hard, no matter your age. Like many things in life, it is better to start earlier rather than later, and learning to manage your money is a valuable investment in your future financial well-being. Not only will learning how to save help you in the long run, but it will give you a leg up on other young adults that can only spend when given money or if their parents buy them things.
Financial independence, or at least the start of it, can help you feel more mature and in control of your life as you begin to become an adult. You’ll also have a better understanding of the value of money and how much things actually cost when you buy them yourself with money earned on your own or saved. On that note, Max Cash is here to give you ten money-saving tips for young adults to help you accomplish your goals and get started with financial literacy.
Tip 1 – Open a Savings Account
This one may seem painfully obvious, but you’d be surprised how many might not consider it. But yes, young adults can open either their own bank account, or have a parent set one up for them. And that is really the first step towards learning how to save and learn how to manage your own money, by going through the process of setting up a savings account with a bank or credit union.


“Require them to put a large percentage of their income, at least 20% and maybe as high as 100%, into a savings account that they can access once they turn 18. This is especially useful if your family is in a position to provide for their needs, including things like a car and some help with college. That lump sum of money is going to help them out tremendously when they move out on their own. It could be the security deposit and several months’ rent on an apartment, a down payment on or outright purchase of a car, or an excellent start to a retirement fund.
It’s not enough to simply withhold their money without explanation. You should talk with them about your reasons for doing this and the goals it will help them reach.”
–Ann Martin, CreditDonkey
Tip 2 – Set Goals
Maybe you want to go on the senior trip this year with your classmates. Maybe a cool band is coming to town, and you want to go to the show. Or you want a Red Ryder Carbine Action Model Air Rifle. However you want to spend your money, set a goal for what you want with a realistic timetable to achieve it. That will be the motivation to help you save up to get it, whatever it is.
“Set your spending targets in advance. It’s April; if you would like a new coat for the winter, identify the coat and the cost and plan to buy the coat with money saved regularly for the next six months. Use a photo of the coat as your home screen to keep focused on what your efforts are going toward.”
–Bob Wood, University of South Alabama


Tip 3 – Make a Budget
After you have your goal, then you need to make a simple budget to achieve that goal. As the saying goes, a goal without a plan is just a wish. Here, your budget works as the plan to turn that wish into reality. Look at how much money you have coming in and try to estimate your expenses. If you are off or spend more than you intended, you’ll then be able to adjust it as you watch what you’ve spent. That will also give you experience in how to refine your budget over time as you get more information on your spending habits.


“Create a budget: A budget is a plan for how you will spend your money. By creating a budget, you can make sure that you’re not overspending and that you’re putting your money towards the things that are important to you. Start by listing your income and your expenses, and then divide your expenses into categories such as food, entertainment, clothing, and savings. Make sure to allocate a certain amount of money to savings each month so you can build up a nest egg for the future.”
–Doug Carey, WealthTrace
Tip 4 – Pay Yourself First
This remains an important principle to learn and you’ll find it best to learn it as young as you can. What this means is that you sock away money from your paycheck, or your allowance or birthday money or something else, and make sure that you get the benefit of any income first before you worry about paying bills or spending it on wants rather than needs. This way, you’ll always have money that belongs solely to you, and you’d be surprised how much and how quickly it can add up.
“Saving at least 20% of your paychecks should make meeting most goals in a reasonable amount of time easy. If your expenses are minimal, you may be able to save even more. The key is to think beyond your day-to-day desires and focus on the long-term benefits of building up your savings.”
–Jake Hill, DebtHammer


Tip 5 – Prioritize Spending
After learning all of those lessons, now it is time to figure out what is important to you. If you can’t live without your double mocha frappe-whatever every morning, fine. That’s what is important to you. Maybe skip buying breakfast there too or pack a lunch rather than buy one. Or maybe you really love live concerts. Maybe that special drink doesn’t mean as much as the ability to see your favorite band live, and you can skip them for a few weeks. But figure out what your priorities are and then follow through on those with your spending habits.


“Encourage youth to establish their own financial objectives, such as saving for a vehicle, college, or vacation. Help them define attainable objectives and develop a plan to achieve them. Teach them how to budget their money and set aside money for their objectives. Help them set up automatic transfers and start a savings account.”
–Olivier Wagner, 1040 Abroad
Tip 6 – Avoid Impulse Buying
Following that thought, don’t just buy something because it was shiny and piqued your interest at the moment. Avoid just buying something the instant you want it. Do you really need a candy bar as you leave the gas station? It might not seem like much, but over time that impulse candy or drink purchase can add up to pretty significant amounts over time. Remember your goals and your plan and try to stick to them as much as you can. Imagine getting what you really want and realize that a short-term treat just isn’t worth as much.
“Identify the areas where you are spending the most and see if there is an opportunity to reduce expenses in those categories. Consider canceling subscription services you no longer use, cutting down on eating out, and comparison shopping for big purchases. You can also consider ways to save money on transportation costs like carpooling or taking public transportation.”
–Michael Dadashi, Infinite Recovery


Tip 7 – Sleep On It
This is basically the same as the previous tip but more for big-ticket items. Before making big decisions, give yourself time to think about it. Maybe even literally give it a day, sleep on it, and go back the next day and see if you still want or need it as badly as you did. Another method is to wait an entire month on any large purchase. If you still want it after a month, especially a month without it, then it is more likely to be something worthwhile. And sometimes, waiting can be a good way to save, either by waiting for a sale or finding another place with a better deal.


“Teach them the importance of patience. It can be tough for them to wait for something they want, but teaching them to save for what they want is a valuable life lesson.”
–Robin Dodson, WREI
Tip 8 – Shop Around
Leading nicely into this tip, which is to shop around and see if other places offer a lower price or maybe better service. Sometimes, an extended warranty or other service plan included as an incentive can make or break the financial viability of a purchase. Especially for higher-priced items, sleeping on it and going on the hunt for a better deal can save you a lot of money, which can then be put towards other things. It never hurts to look around and make sure you’re getting the best deal available.
“Another way to create great money management habits is to cut expenses anywhere you can. One I came across recently is that Lyft seems to be a bit less expensive than Uber in terms of hitching rides.”
–David Bakke, DollarSanity


Tip 9 – Take Advantage of Any Student Discounts
You’d be surprised just how many places offer student discounts, especially in a college town or most big cities. All you have to do is ask, as some places offer them but don’t really advertise the fact that they have them.


“Explore ways to save money on activities and entertainment that is already budgeted for. For example, joining a kayaking club instead of buying gear outright can help them save on costs while still enjoying the sport. Investing in a library card is an excellent way to gain access to digital books, films, music and games without breaking the bank.”
–Mo Mulla, Parental Questions
Tip 10 – Spend Cash Instead of Using a Card
This can be helpful if you find it too easy to swipe a card and not really pay attention to how much you are spending. Handing over cold hard cash can make you realize just how big that number really is as you watch a twenty-dollar bill disappear and only get back a couple of ones and some pocket change.
“Put the money you’re spending on them in their hands. Instead of paying for their cell phone subscription, buying them clothes for school, and getting their favorite foods at the grocery store, simply give them this money each month, and tell them that they’re responsible for spending it. While they may simply put most of it right back in your pocket in exchange for your services, they may also try to experiment a bit with that money, either learning harsh lessons or finding new ways to be more efficient with their money in order to save up for other big financial goals.”
–Ben Michael, Michael & Associates


Bonus Tips from Our Experts
You don’t have to take our word for it. Here are some additional solid tips for young adults on saving money from our panel of financial and family experts.


“Investing in your future is essential for achieving financial security and building wealth over time. One of the easiest ways to start investing is by opening a savings account. It can be a simple interest-bearing account that allows you to earn interest on your savings. Another option is to start a retirement fund such as an individual retirement account (IRA) or a 401(k). These accounts allow you to invest your money in stocks, bonds, or mutual funds and can provide significant tax benefits.”
–Bailey Schramm, BizReport
“Knowing how to budget well is crucial for all adults, essentially, so this will help them develop knowledge and great habits for their own impending independence. I would recommend utilizing a platform like Mint for this.”
–Carter Seuthe, Credit Summit Debt Consolidation




“Make money by starting a small business, babysitting, or mowing lawns. They can also offer their services online, such as through online marketplaces or social media. Additionally, they can participate in paid online surveys or sign up for paid focus groups.”
–Calvin Widmore, IBR
“Save up enough for a deposit on even a tiny flat or apartment, one in bad condition if necessary. Take advantage of all the first time buyer benefits and get a foot on the property ladder ASAP. That will be his first step. And stay on good terms with your parents, who, if they’re like us, will help you with that first purchase in any way they can and offer you a zero expenses place to live for as long as you choose to live at home. I’ve got no desire to be an empty nester! When he buys he will likely rent it and continue to stay with us, if he takes trips solo in future he’ll be doing it at least partly for our business, so we’ll cover that too.”
–Alyson Long, World Travel Family




“Know how much you are bringing in, what is being deducted (taxes, SS, etc) and what is left NET after deductions.
Keep track of your spending and make a budget that shows you where your money is going (clothes, entertainment, eating out, car, gas) so that you are spending less than your net earnings. There are lots of phone app that can help you create a budget. You can see exactly where your money is actually going and keep your finances on track.”
–Aviva Pinto, WealthSpire
“Start saving early. Even small amounts of money can add up over time. Encourage them to set aside a portion of their income regularly, whether it’s weekly or monthly, and put it in a savings account. This way, they can save up for their future goals and have a cushion for unexpected expenses.”
–Sam Weisfeld, FinImpact




“It may be tempting to spend all the money you make, but having some discipline and spending less than you earn will help you save more money in the long run. Make sure to track your income and expenses so that you can stay on top of your finances.”
–Justin Carpenter, Modern Maids
“Automate their savings when they get their first job. Every time you get paid, have an automatic transfer set up to pull 10% of your check into savings. If you set it aside before you get the chance to see or spend it, you won’t even notice it’s gone.
An automatic transfer is a great way to start putting a little away at a time and begin building an emergency fund or savings for a big purchase. Also, there are lots of great high-yield savings accounts available right now. Setting up one and depositing into it might seem to earn you little money initially, but you’ll see how quickly compounding interest works and builds your savings even faster.”
–Tana Williams, Debt Free Forties




“Look for ways to save on everyday expenses. Make small adjustments that can add up over time, such as packing a lunch instead of buying one, using public transportation instead of driving your own car, or shopping around for the best deals. Look for discounts and coupons online and in the newspaper that can help you save money on groceries, clothing, and other essential items. Every little bit helps.”
–Fred Hoffman, The True Wilderness
“Young adults are often lured into buying expensive gadgets such as the latest smartphones, tablets or gaming consoles. These items could actually be a drain on your finances since they can cost hundreds of dollars! Instead, consider investing in items that last longer and don’t need to be replaced as frequently.”
–Shaun Martin, We Buy Houses in Denver




“Sell your unused stuff. It’s so much easier these days to list old games, tech devices, sports gear, etc. for sale on social media and it can be a really great way to make some quick cash.”
–Dylan Houlihan, Swift Salary
“Take advantage of discounts and rewards programs whenever possible. Many stores, restaurants, and other businesses offer discounts or loyalty rewards programs. Taking advantage of these offers can help you save on everyday purchases while also helping you build better spending habits in the long run.”
–Zach Larsen, Pineapple Money




“Before making any investment decisions, read up on books or articles about investing so you some idea about the different savings vehicles available and their associated risks. If in doubt, stick with low-fee tracker funds and invest for the long-term, rather than attempt to trade individual stocks – which is difficult to do.”
–Harry Turner, The Sovereign Investor
“Millionaires all start with a plan for their money, also known as a budget, because winning with money is no accident. So here’s how millionaires (or future millionaires) save money.
Get paid → Save money BEFORE YOU SPEND (based on your plan aka budget) → Spend on Needs → Spend remaining money on wants (including buying things or experiences for yourself, and giving generously)
Not only will paying yourself first ensure you ALWAY save money, it’ll keep you from overspending and going into debt like most people these days.”
–Matt Matheson, Family Money School




“Set up a savings plan once they secure their first job. My top tip for this would be to sit down on your own or with a parent and set some tangible savings goals. I would recommend setting goals for long term savings you won’t touch, along with shorter term goals for items and events you’re saving up for. Come up with your average earnings in a month, and from that determine what amount you can set aside biweekly or monthly to advance toward your goals.”
–Andy Kalmon, Benny
Build a Solid Foundation for your Financial Future
Keeping these principles in mind can help you create good habits for a more solid financial future. Nothing is ever certain of course, but having the knowledge and skills to handle your money will serve you well over time. It won’t solve all of your problems, but maybe you’ll be able to eat mac and cheese with a little hamburger meat instead of living on ramen in your college days. Every little bit helps, and saving from a young age will show you that better than almost anything else.