January 15, 2025

10 Must-Follow Financial Tips for Young Adults

If you’re in your late teens or early twenties, making it from paycheck to paycheck might be the only money-related topic on your mind. But becoming financially literate now is one of the greatest gifts you can give your future self.

While learning to manage money effectively early in life is a great goal, we won’t pretend it’s easy — especially without the proper guidance. That’s why we’ve prepared a comprehensive list of financial tips for young adults like you.

Financial advice for young adults: 10 tips to get ahead

For young professionals, financial planning and budgeting lays the groundwork for stability — both now and later. Follow these tips to make sure you stay on track.

1. Start budgeting early

Budgeting is the foundation of financial health. And the earlier you start, the better. Use our budget calculator to get insights into your spending habits. Make cuts where possible, then figure out how much you can afford to spend on things like housing, food, and transportation (tip #2 will help!). Use a spreadsheet or budgeting app to track your spending each month.

2. Try the 50/30/20 rule

Whether you’re an established professional or a young adult, this budgeting tip is for you: Use the 50/30/20 budget rule to figure out what percentage of your income to allocate to different types of expenses. Determine how much money you take home after taxes, aka your take-home pay, then let this breakdown guide your budget creation:

Spend 50% of your home pay on your needs — things like rent, utilities, groceries, and other non-negotiable expenses.
Practicing good personal finance doesn’t mean never having any fun. Allocate 30% of your post-tax income to non-essentials like entertainment and dining out.
Invest the last 20% in your future. That could mean paying extra toward any type of debt (like student loans), building an emergency fund, or contributing to a 401(k).

3. Avoid overusing your credit card

Responsible credit card use can help build your credit. It’s also smart to have a card available for emergencies. But avoiding debt is always your best bet, so be sure you’re only charging what you can afford to pay off each month.

4. Build an emergency fund

The most predictable thing about life is its unpredictability. A credit card or an Earned Wage Access app like EarnIn can help you when you’re in a bind, but your best protection against the unexpected is an emergency fund. Set a goal to save three months’ worth of expenses — our Tip Yourself tool can help.

5. Don’t wait to save for retirement

At this point in your life, retirement is probably the last thing on your mind. But investing in a 401(k) or individual retirement account (IRA) as soon as you’re able will pay off big-time down the road. For one thing, 401(k)s and traditional IRAs let you contribute money before taxes come out, which helps reduce your tax burden. You can also invest your retirement funds in stocks and bonds. And thanks to compound interest, the sooner you start investing, the more time those funds have to grow. What you contribute today will make up a tiny fraction of what you’ll have available when you’re ready to retire.

6. Avoid unnecessary debt

Anyone with a healthy money mindset knows it’s best to keep debt to a minimum. Making low monthly payments toward loans or debt make purchases more affordable in the short-term but can cost a lot in interest. Think carefully before taking on new loans or credit, and pay more than the minimum whenever you can.

7. Learn about credit scores

Throughout your adult life, your credit score will affect everything from loan approvals to apartment rentals and potentially even job applications. Use EarnIn’s Credit Monitoring tool to keep a close eye on your credit score any time, for free. Check your score periodically, and prioritize paying down existing debt to increase your credit score and make yourself more attractive to lenders.

8. Prioritize essentials

What you need to survive should always be at the top of your budget. After covering necessities like food and rent, consider allocating any remaining funds toward nice-to-haves and savings. With this approach, you’ll always be prepared to meet your needs, even when money’s tight.

9. Invest in financial education

This list of financial literacy tips is a great starting point, but that’s exactly how you should treat it — as the first step in a lifelong journey. The more you learn about managing money, the more control you’ll have. Consume all the content you can from podcasts, the EarnIn blog, and other trusted resources so you can expand your knowledge and make informed decisions about your money.

10. Monitor your taxes

At tax time, you’ll probably either get a refund or learn you owe the government a little bit (and hopefully not a lot) more. While that’s normal, keeping tabs on your taxes will help keep you from overpaying or getting hit with a surprise amount owed to the IRS.

If you’re too confused to adjust your withdrawals yourself, ask an accountant for help. What you pay now for professional guidance will likely be little compared to what some advice helps you save.

Money management for everyone — regardless of age

No matter how old you are or what kind of financial situation you’re in, adopting these essential money management strategies will keep you on a steady path toward financial security.

Track your spending habits

Keeping a close eye on where your money goes each month is crucial to staying within budget and avoiding overspending. Use a budgeting app or track your expenses in a notebook or spreadsheet to pinpoint patterns and identify where you can cut back.

Be strategic with debt payments

Consider the avalanche method (tackling the highest interest debts first) or the snowball method (starting with the smallest balance for a motivational boost) — whatever debt payment method works best for you. Paying more than the minimum each month can also save you significant money in interest over time.

Automate your finances

You can simplify your finances by setting up automatic transfers and payments. Automate bill payments to be sure you don’t forget to pay, and use automatic deposits for tools like Tip Yourself¹ to make saving easy.

Regularly review your financial goals

As your life changes, so will your financial priorities. Check in on your goals every few months, adjusting them as needed to reflect new priorities, like saving for a big purchase or paying off debt. Small, consistent adjustments will help keep you working toward goals that align with your current life stage.

Diversify your savings and investments

Manage your risk by diversifying where you put your money. Start with a mix of savings accounts and retirement plans. As you get more comfortable, explore other investments. This approach spreads your risk while helping you work toward multiple financial goals over time.

Build a brighter financial future with EarnIn

Managing your finances as a young adult can feel overwhelming, but it doesn’t have to be. With tools like Credit Monitoring and Tip Yourself, you can track your credit and build the financial habits you need for a more secure future.

Plus, EarnIn’s Cash Out tool even lets you access your pay as you work — up to $150/day with a max of $750 between paydays — so you have what you need to keep moving forward, whatever life sends your way.

Download EarnIn today to make every day payday.

Frequently Asked Questions

What’s the best way to start saving for retirement?

Start by opening a 401(k) or IRA through your employer, then add to it regularly. Even small contributions now add up over time.

How do credit cards impact my credit score?

Using credit cards responsibly — paying on time and keeping balances low — can help build your score. But if you pay late or rack up a high balance, your credit score will likely suffer.

How can I budget when my income fluctuates?

Base your budget on your lowest expected income and save extra during high-earning months to make up for the times you make less.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.