What Nobody Taught You About Personal Finance as an Adult

“It’s not easy to transition to trying to learn how to actually budget, save for an emergency, decide what to eat based on what you can afford, planning for the future, and all of that. It’s never taught at any point. You’re just expected to figure it out on your own.” — my brother Pat on personal finance in your 20s as an adult for the first time.

High school, college, and our parents never really do anything to prepare us for life as an adult. We’re supposed to learn-on-the-job as we fumble in the dark while trying to find the perfect Instagram filter. We don’t know anything about budgeting, saving up to move out, paying taxes, or being able to afford the occasional vacation.

How do you manage your money when you become an adult? What happens when you’re on your own for the first time ever?

99% of the people at 22 simply aren’t ready for adulthood (made up stat). Most people are still living at home at 30 and confused about how to save up for a trip or how to move out before their 40th birthday.

All of this “adult stuff” is frustrating and confusing when you’re in your 20s. I want to show you how to manage your money once you become an adult with a real job.

You’re likely panicking about how to go from broke college student to an adult who’s supposed to have a house, two cars, a family, and the ability to travel on a random weekend all while learning a few languages.

What happens when you start working and become a real adult?

I don’t want to assume that you went to college. There are many other options for life after high school. This is for anyone from 22-30. I use 30 as the upper limit because we’re all delaying adulthood these days. I’m the biggest culprit of this.

Here’s the scenario…

You’re working full-time for the first time in your life. You’re now making money. You have a job and real responsibilities. You can’t go party on a Wednesday night. You know that you’re now an adult.

There’s just one problem: YOU DON’T HAVE ANY MONEY FOR ANYTHING!

Heres’s what you’re thinking about:

How can anyone afford to party in Cancun for a weekend?
Will I ever move out?
How can I afford kids?
Why can’t I eat out every meal?
Will my parents bail me out?
Why’s there never anything good on Netflix?
How often can I buy a new car?
When will I be able to buy my own place?

What happens when you start working full-time in your career? You have no idea about how to manage your money. You don’t know what to do to get ahead.

How does money change when you become an “adult?”

You go from sneaking a flask into the bar to making dinner reservations where you have to actually talk to your friends about what’s going on in the world.

It’s kind of weird. You don’t really know how to handle this. I had a rough transition. I never went into the traditional workforce.

Money changes because you now have to figure out how to move out, pay off your debt, and try to enjoy life all on this salary that you’re likely not satisfied with.

What do you need to think about as an adult?

There are three things I want you to think about before we move forward (more on these in the next section):

How much do you owe?
How much money can you make right away?
How can you increase your income for the future (this includes everything from freelance writing to driving for Uber on the weekends)?

How should you start handling your finances as an adult?

The first step is to figure out how much money that you owe from your college experience vs. what you’re going to make.

If you didn’t attend college, then this isn’t an issue for you. If you’re in debt, then you have to figure out how much you owe and what’s happening with all of that debt. It’s good to know how much you owe so that you know where you stand.

Then you have to see how much money you’re going to make. It might take you a few years to hit your peak salary. Perhaps your field doesn’t pay the best and you might want to consider upgrading your skills.

Start to think about your next move.

This is where things got tricky for me. I was lucky enough to not have any college debt but I didn’t have the guts to go all in with Studenomics and to travel the world full-time. I still worked at my part-time job while I focused on my freelancing on the side.

I loitered a lot. I did a bit of everything. I wanted to take on the whole world. I wanted everything in the world. I dabbled in too much without ever focusing on one thing.

Here’s the thing: When you go after everything, you go after nothing.

Think about your next move. Make that move or at least work towards making it.

Look at your expenses.

You have variable expenses (eating out, going out, and other costs that change based on your decisions) and fixed expenses (the costs that you can’t avoid like rent, car insurance, debt payments and things along those lines).

First you figure out your fixed expenses so that you know how much money you have going out every month so that you know how much you money you need to cover the basics. Then you work on the variable expenses based on what you have left. I would suggest that you put some money into savings. Then the rest of your money is left for the fun stuff (getting hammered every weekend or trying to save up for that trip to Thailand).

Figure out how you’re going to bring in more money.

As you go through your 20s, you’re going to want your income to increase. You don’t want the same salary at 29 that you had at 22. You also can’t assume that your salary will go up just because you’re getting older. You have to actively take steps towards making more money.

What will you do for money? Think about the following…

Can you find a better job in your field?
Can you get a side gig for extra money?
Can you take courses to increase your value?
Will you try to build an online business?

Start putting money aside.

It’s important that you get into the habit of saving money. It’s okay if you can only put aside $50 a week or so. You have to try to put something away to build the habit. More on this later. Read up on budgeting when you hate budgeting for a quick start.

CALM DOWN!

Don’t feel bad about the fact that you don’t own a home or that you can’t afford to spend a weekend in The Bahamas. This stuff takes time.

So just calm down for now. You’re not going to have what your parents have or what your older friends have. It took these people many years to get to the level that they’re at right now.

You can’t have that dream home and brand new car in your first few years of working. It takes time to get everything. If you take anything away from this article then I want this to be it. Don’t panic about being broke. You don’t have to be broke forever.

Start thinking about what you want out of life.

What do you want out of life? I won’t get all spiritual you on here. Let’s look at some important questions:

Do you want to move up in your field?
Do you want to freelance for money?
Are you looking to settle down?
Do you want to live at home?
Do you want to marry your high school sweetheart?
Do you want to travel the world?

If you don’t think about what you want out of life then life will just happen to you without your input.

Accept that you’re going to have a few confusing years.

“What do you mean you don’t want to go out? We always go out on the weekends!”

I couldn’t handle it when friends around me grew up. I really couldn’t deal with it. There were some puzzling years in my 20s. Luckily I had this blog and documented my confusion (NOT!).

Let’s be honest, most of our parents finished college or got a steady job right out of high school. Then they got married, had kids, and focused on their families.

We’re a bit different.

What do we do? We stress about the perfect Tinder profile picture or we post memes about how much we hate our jobs.

Use your energy for a positive impact.

You have all of the energy in the world. Use it to your advantage. Get shit done. Don’t rant and rave about conspiracy theories on Facebook. You don’t have to read every self-help book in the world, but you can start with always focusing on yourself instead of blaming the economy for your problems.

Try to get into money management slowly.

I’ve written to death on here on personal finance basics. You have to start off wit the fundamentals before you can start thinking about hiring a stock broker. These are my core theories on money management…

The Cancun Technique For Saving Money. Find a bold goal that’s going to force you to save up (buy a condo, quit a job, or retire early).
The Houdini System for saving money in the long run. Hide your money so that you don’t have access to it.
The YOLO System. This is how I blow money without feeling guilty about it. You can take $50 or $100 every week that you’re going to spend on foolishness (we don’t judge around here).
See how Jacquelyn paid off $48k worth of debt. This is for those who are struggling right now.
Investing for beginners. Everything you could want to know about investing your money.

Just to recap the transition from punk to real adult. Here’s how it looks:

Figure out how much you owe compared to how much you’re making.
Start to think about your next move.
See what your expenses are like. Try to bring down the fixed expenses. Work on the variable expenses (eating out, partying, etc.).
Figure out how you’ll bring in more money over time.
Try to get into the habit of saving.
Calm down.
Think about what you want out of life.
Accept that we’re all confused.
Use your energy to get stuff done.
Slowly get into personal finance.

One last friendly reminder…

You’re not going to buy a home or take on the whole world at once.

Newsflash: You won’t have that dream home or CEO job title at 25. You may not have either at 30 or 40. That’s okay. Breathe. Figure out your next small step and enjoy the ride.

I grew with Studenomics. I shared my journey and we all grew together. Obviously others are coming in at different stages of this journey. Some of you find me through my student articles, some of you come here because you want to make more money in your 20s, and others just want to see if I’m still alive. I can’t stress the importance of patience and chilling while at the same time trying to get ahead.

You need a mix of long-term patience with daily hustle.

When you’re ready you can read my detailed piece on buying a place.

I wish that I had written this article sooner. I guess I was too busy living the transition to adulthood.