As a young adult, whether just out of college or starting your first job, you’re likely still getting adjusted to the balance of making and spending money. Knowing how to allocate each paycheck correctly can be tricky for beginners. This guide is here to help. Read through to find out the top four financial priorities for young adults, and see how they can apply to your life.
Start saving early
You’ve probably heard this before, and maybe you didn’t take it seriously—but you should. The earlier you get started saving, the more that your savings habits will benefit you. Here are just a few of the ways that saving early can help you in your financial life:
- Build good habits: By starting saving early, you’ll become more comfortable with keeping up a habit of saving regularly—a habit that you can hold onto your whole life.
- Increase your net worth: Having a sizable net worth becomes more and more important as you progress through life. Whether that’s because you’re saving for a house, a new baby, or retirement, you’ll be glad to have more capital. (Pro tip: use a net worth calculator to get an accurate assessment!)
- Be prepared for retirement: Did you know that millions of American retirees don’t have enough savings to leave their jobs by the time they are ready to retire? The earlier you start, the easier it is to ensure you have enough to live out your golden years the way you want to.
Gain financial literacy
Pop quiz: what does APR stand for?
If you guessed “annual percentage rate,” you’re right. That’s the amount that a card (or another loan) charges per year for the pleasure of using the service. Knowing terms like “APR” and others is critical for making wise financial moves. Many people make financial mistakes when they’re young simply because they don’t have a great grasp of financial literacy.
If you’re sitting down with an investment broker, a bank representative, or a car salesman, it’s important that you’ve done your homework. Spending time learning financial vocabulary, strategies, and even common scams is essential to building a healthy financial profile as a young adult. 
Make a budget
Budgeting may sound like a no-brainer, but you’d be surprised how many people don’t actually sit down and plan out how much they intend to spend. Having an accurate monthly budget can make a world of difference in your long-term financial health, as spending too much each month (even if it’s just a little) can add up over time and seriously hurt your finances.
Here’s what you can do:
- Take a look at previous spending. Gather credit card spending statements, bank statements, grocery receipts, and any other record of your spending.
- See how much you generally spend in each area month-to-month, and write it down. It can be helpful to divide things into categories like groceries, eating out, bills, content subscriptions, etc.
- Using that data, plan how much you ideally want to spend (realistically).
- Then, do your best to stick to your budget. If something puts you over (and it’s not an emergency), it’s important to know when to pass it up.
That brings us to our next point.
Learn to say no
When you’re young and first have a viable income stream, it can be a ton of fun. You might be travelling, going to concerts, going to bars with friends on weekends, and more. And while all of that is worthwhile, it’s also important to know when it’s time to say no. If you’re over budget for eating out that month, it’s okay to tell your friends, “Hey, I’m trying to save a little money. I’ll catch you at the next one.”
Knowing your limits, planning a budget, becoming financially literate, and prioritizing savings can all help you build a financial skills profile that will last a lifetime.