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How to know you've become a financial adult

Learning to save is one of the steps

Learning to save is one of the steps toward financial adulthood. Credit: Getty Images/iStockphoto / Ridofranz

Ask 10 people for their definition of "adulthood" and you'll get 10 different answers. Maybe it's getting that first full-time job, buying a house or doing taxes without help — concrete moments that signal maturity and independence.

But financial adulthood, or managing money responsibly, isn't tied to an age or a milestone like starting your first "real job." I knew I was a financial adult when I paid for a plane ticket with money I had saved in a "Fun Stuff" account. I've never been more excited to Venmo someone (my sister, who booked our tickets) directly from my bank rather than rely on my credit card.

You're a financial adult when you save regularly, spend mindfully, face reality and know when to ask for help. 

Save proactively. Saving even a little bit every month is the single most adult financial move you can make. Money is a way to get what you want: security and freedom. When you save a portion of the income left over after covering your fixed expenses, you're preparing proactively for the future.

If the idea of sending this money to an "emergency fund" makes you completely tune out, just think of it as cash that's there when you need it. You'll be covered if you lose a job, but you'll also have options if you decide to make a lifestyle change, like moving to a new place.

Spend thoughtfully. Getting a full-time job with a $50,000 salary after being a college student who ate pizza four times a week can be a shock. But hit the pause button before you make a big purchase, says Therese Nicklas, a certified financial planner in Rockland, Massachusetts. Make sure it will truly bring you joy, and that spending isn't a way to get your mind off something else or to compete with friends. 

Take a look at your take-home salary and follow the 50/30/20 rule. That's half your pay for necessities like shelter, 20 percent for saving and debt payoff, and 30 percent for your wants. The adult part? Giving up your wants if your necessities or debts demand it.
Know when to ask for help. No one expects you to figure everything out right now. Your income, expenses and goals will change many times in your life.

But you should feel empowered to get advice, from the right sources, when you need it. Even your parents may not be the best resource if, for instance, you earn more than they do and they haven't had experience handling the salary you're getting.

Have the courage to talk to human resources at work if you don't understand your 401(k) investment options. Consider asking a certified financial planner for a free 30-minute consultation so you can set personalized saving and spending goals. There are few things more adult than admitting what you don't know without judging yourself for it.

Financial adults don't cower at the sight of their bank account balance, even if it's smaller than they'd like. Frankly assessing your personal financial picture will make it easier to manage. If you save for retirement in an employer-sponsored account, find out the vesting schedule, or the amount of time you must work there before any money your employer contributes becomes yours. You'll have a clearer understanding of how much you've really saved if you end up leaving after a year or two.

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