Turning 21? Here’s How to Manage Your Money Like a Real Adult

Turning 21 is a pretty big milestone.

Aside from the ability to legally drink alcohol and all the responsibility that comes with that, your 21st birthday serves as the final stepping stone into adulthood and all the responsibilities that come with that.

I mean, sure, for some people, 21 is liberating — the beginning of the rest of their lives.

But for others, 21 simply means financial independence.

And while it’s all rosé-colored glasses for the first few months, you quickly realize just how much a good bottle of your favorite Cab Sav costs and that things like, oh, y’know, cooling and heating your living space to temperatures that don’t make you want to tear your skin off or burrow into the earth, respectively, means dropping the big bucks.

Yeah, there’s a reason that internet joke about dads and thermostats makes the rounds, and I’m betting you can finally relate.

Add in student loan payments that are about to kick in, heading into your first adult job and your parents letting you know you’re on your own for car insurance, and it’s enough to make your head spin more than it did the night you went out to celebrate your first night as a legal consumer of alcohol.


If you’re freshly 21 — or getting close to it — we’ve got some tips and tricks for making, saving and managing your money so you don’t end up blowing this whole adulthood thing on your first try.

Financial Tips and Tricks Every 21-Year-Old Should Know

Whether you’re worried about budgets, bills or booze money, here are some things a 21-year-old should know about managing money.

1. Make a Little Wiggle Room in Your Bar Budget

hand holding glass of beer on table
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Look, I understand. You’re finally legal. You’re ready to hit the very bars that have been turning you away for years. (Just remember to drink like a responsible adult!)

But if you’re not careful, it’s easy to blow your entire beer budget in one weekend — after which you’ll be stuck drinking $3 wine at home by yourself while your coworkers hit up happy hour.

Luckily, there’s a way to earn cash back on alcohol.

Yeah, seriously.

Ibotta is an easy-to-use cash-back app that’s partnered with more than 50 retailers offering deals on many of your favorite brands.

The app features both liquor store deals and cash back on drinks from any restaurant or bar.

We’ve seen deals like $5 back on 750-milliliter or 1-liter bottles of Absolut vodka, $3 back on any pitcher or bucket of Budweiser or Bud Light and $3 back on any mixed drink or cocktail featuring 1800 Tequila.

Those are some pretty sweet deals.

2. Know Your Credit Score

credit score on chalkboard
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If you’re just starting out in the adult world, you’ll quickly learn your credit score is the key that opens nearly every door. (Sometimes frustrating, but true.)

Want to rent an apartment? They’re going to check your credit.

Ready to buy a car? Credit check.

Need to refinance your student loan? They’ll be checking. That. Credit.

The first step to having a good (or great!) credit score is knowing what you’re dealing with.

Your credit report will give you this information.

You can get your credit score and “credit report card” for free from Credit Sesame. The website breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how you might address it.

Jerry Morgan was able to increase his credit score 120 points after signing up with Credit Sesame, thanks to the platform’s suggestions and resources.

He’s also learned a lot about what elements go into a credit score and how to keep his score as high and healthy as possible.

If there’s one thing you learned at college, it’s to never pass up free stuff, right?

3. Cut Your Debt Interest Rates

Credit card being cut with scissors
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Like so many other young people these days, if you grew up in a home where debt wasn’t discussed, you probably weren’t aware of just how easily you could get sucked into the quicksand pit of credit card debt.

And you probably didn’t understand the impact it would have on your young life, either.

If you’re sitting on an account showing a few too many zeros (and not the positive kind), but find yourself unable to dig yourself out because of sky-high interest rates, it might be time to look into refinancing or consolidating your credit card debt.

A good resource is consumer financial technology platform Even Financial, which can help match you with the right refinancing loan to meet your needs.

Even searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. Its platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.

All it takes is three easy steps to know what kind of loan you qualify for.

4. Wow Your Friends by Becoming a Real Estate Investor

house for sale in st. petersburg
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Listen, it’s not every day a 21-year-old can say they invest in real estate.

But this one isn’t just for the street cred — it’s also a smart way to dip your toes into the world of real estate investing without handing over thousands (or even hundreds of thousands) of dollars.

Twenty-one-year-old Katie Smith, who recently graduated from Georgetown University in Washington, D.C., had some money sitting in a regular, low-interest savings account.

She knew her money could be making more money and liked the idea of investing in real estate, she didn’t really have “buy a house” kind of money.

Then she heard about Fundrise.

You can start investing in real estate with a minimum investment of just $500, and Fundrise does all the heavy lifting for you.

Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.

This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios.

“I can go into my Fundrise account and see what I actually own,” Smith says. “I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast. Bits and pi

5. Set Your 401(k) — and Yourself — up for Success

Kelsey Buxton walks through the downtown area of St Petersburg
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If you’re just getting started with a real adult job (or will be soon), you’ve probably been hearing a lot of talk about 401(k)s.

If you have a 401(k), you’re on the right track.

Now, though, you need to make sure it’s doing the absolute most to get you ready for retirement.

We know: Understanding, managing and optimizing your 401(k) account takes up more time and brain-power than most of us are willing to commit.

When Kelsey Buxton opened her 401(k) account in November 2016, she had big plans to get the most out of it with some smart investing.

“But that’s a full-time job,” she says. “That’s what a financial adviser is for.”

Luckily, she found a robo-adviser for that. Blooom, an SEC-registered investment advisory firm, will optimize and monitor your 401(k) for you.

It gives you an initial 401(k) checkup for free, and you’ll get to know your account a little more intimately. Find out whether you’re paying too many hidden fees, have the appropriate amount invested in stocks versus bonds, that kind of fun stuff.

After that, the tool is $10 a month to use to continue to monitor your retirement account. Let Blooom know your target retirement age, and it can help you get there by investing more and less aggressively.

6. Save for a Rainy Day

Rainy Day Outdoor silhouette
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Remember all that adult responsibility we were talking about earlier? Yeah, that comes with a lot of surprise expenses.

From emergency vet visits or medical bills to pricy repairs when your car starts making that thudding noise one random morning, unplanned expenses crop up everywhere.

The adult thing to do? Save up an emergency fund to fall back on.

If you’ve tried (and failed) in the past to beef up your savings account, you’re probably wondering how this time will be any different.

Not to worry: Chime has your back.

Chime is an online-only bank account that offers some unique features other banks haven’t caught on to yet.

Along with not charging overdraft fees, monthly maintenance fees, foreign transaction fees or minimum balance fees, Chime gives you access to thousands of fee-free MoneyPass ATMs around the country and even has a “Pay Friends” feature, so you don’t have to mess with cash, math or other apps to split the bar tab.

But that’s not even the best part.

Chime also has this awesome feature called “the round-up tool,” which will round up your transactions to the nearest dollar and dump the change into savings.

Recently, Samuel Demeny switched from Wells Fargo to Chime to get away from those unnecessary fees and restrictive daily spending limits.

After opening his account, Demeny decided to try out Chime’s automatic savings tools. Within nine months, he managed to save up $800 — money that will help him with last-minute moving expenses when he and his boyfriend make the move from Texas to the Pacific Northwest.

7. Start Investing Like an Adult

Derek Mateo handles cash in Orlando Florida
Carmen Mandato/The Penny Hoarder

As you venture further into adulthood, you’ll hear more and more people at more and more social functions talking about things like investing.

If you want to get ahead of the financial game (the small-talk-at-adult-dinner-parties potential is an added perk), try investing with Stash.

Stash lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000.

The app curates investments from professional fund managers and investors and lets you choose where to put your money — but it leaves the complicated investment terms out of it.

You just choose from a set of simple portfolios reflecting your beliefs, interests and goals.

Plus, right now, The Penny Hoarder is teaming up with Stash to fund your first investment — so you’ll get a $5 bonus to get started!

8. Stay on Top of Your Student Loans

Graduating class
LawrenceSawyer/Getty Images

If you recently graduated or will soon be graduating from college, you probably have student loans looming ominously on the horizon.

The best thing you could possibly do for yourself? Learn everything you can about paying them off, and make a plan to stay on top of them when repayment time hits you like a ton of bricks.

First, you’ll need to know your loans inside and out.

Then, set your student loan repayment journey up for success: Know what you owe, understand what “deferment” means, figure out how to lower your interest rate and learn how to make a little extra money so you can pay down your loans quicker.

And when you hit that point that we all hit — that “will this be the rest of my life?!” point — here’s a little inspiration that just might get you through it.

9. Let This Financial Assistant Negotiate Your Bills Down

man sitting at a desk by a window at home, paying bills.
kali9/Getty Images

Somebody’s gotta keep the Wi-Fi on.

I mean, how else would you Tweet your very valid opinions on the latest episode of “Drag Race” or post that fire selfie on Instagram? (You’ve got your priorities; no shame in that game.)

While you’ve probably heard you can call your cable company to negotiate your cable and internet prices down, if you’ve actually tried it, you know how long you can sit on hold.

That’s why it’s time to call in a robot. The personal finance bot Trim will negotiate your cable or internet bills down for you.

It works with Comcast, Time Warner, Charter and other major providers.

You can sign up simply with Facebook or your email address. Then, upload a PDF of your most recent bill, and Trim’s magic gets to work. If at first it doesn’t succeed, it’ll keep negotiating until it can save you some money.

Trim takes 25% of the savings tab, and you get the rest.

A robot that will work to save you money? That’s some of that “living in 3018” business.

10. Learn How to Budget

Margo Macys is the trusty mascot of a home office in Tampa Florida
Carmen Mandato/The Penny Hoarder

A 21-year-old needs a budget — no ifs, ands or buts about it.

If you’re making money, paying bills and still hoping to have a little spending money to live that (sort of) carefree lifestyle of the young and untethered (you’ve got big plans to travel, right?!), you need to be allocating every dollar to, well, something.

Yeah, now that you’re 21, it’s time to create a budget for yourself.

It’s not as easy as just spitting out some guesstimates of what you spend (or want to be able to spend) on the daily, but it also doesn’t have to be a totally intimidating process. We’ve got some tips that will help you create a budget that works for you — meaning you’ll still be able to funnel some money into your travel fund.

The most basic budgeting rule is the 50/20/30 rule. It’s not a science, but it’s a great starting point that will help you understand how much of your paycheck you should allocate to different areas of your life.

Once you’ve got the basics down, follow these seven steps to creating a budget that fits into your life — not one you have to fit your life into.

eces of apartment complexes in Texas and Denver, a construction loan, a mixed-use property.”

11. See Whether You’re Paying Too Much for Car Insurance

General View of the city of Chicago
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For most people, car insurance rates will begin to drop dramatically once you hit 25. But even at 21, you might be overpaying for car insurance and not even know it.

While there’s no way to completely avoid paying for car insurance if you own a car, one way you could save money is by shopping around and comparing rates at least once a year.

If you’re a smart shopper, you already compare prices, right? So just like you compare the prices of flights, shoes and laptops before purchasing, why not compare car insurance?

The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 204 providers in just a few minutes.

Artie Januario was paying $95 a month for car insurance, and because one of his best friends was his insurance agent, Januario didn’t question it. (Question everything, guys.)

After a cross-country move from Boston to Austin, Texas, he decided to try out The Zebra’s services. Within half an hour of starting his search, Januario had new insurance, and his monthly payment was just $65 — a pretty big deal, because car insurance rates in Texas are generally higher than those in Massachusetts, where he’d been living before.

A Real Adult With Real Adult Finances

Yeah, that’s you — the real adult.

And whether your plans involve grad school, a life of travel and adventure, or getting a jumpstart on your career goals, you’ll need to keep a close eye on your finances to ensure they’re going to get you where you want to go.

In the meantime, though, feel free to pop a few bottles to celebrate the last birthday people will actually get excited about.  

Grace Schweizer is a junior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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