Have You Grown Up Financially?

by Alex J. Coyne

Here are some money matters you need to consider if you want to be financially mature. Take a look before you determine that you have already grown up financially.

When you were a kid, your parents cared for all the hard stuff like loans, mortgages, car payments, and food. But there’s a point where everyone realizes they’ve grown up.

Mine was the first day I lined up to buy cleaning supplies for our first apartment, and I remember thinking, “Oh, man, it’s started.” While that was when I realized I was grown up, it took me a while to grow up financially.

Have you grown up financially? Here’s what you need to start thinking about:

What Is a Financial Adult?

“A financially mature person,” says Helen Ueckermann, a freelance journalist with years of experience in the financial field, “is someone who knows and understands his own finances, making the best financial decisions for the future.”

“This type of person is nobody’s slave, doesn’t believe in the debt myth, and knows that future advantages are not needed today. He or she can see the danger of financial spider webs a mile off and decides in time that that is not the way to go.” says Helen.

According to Helen, being a financial adult means thinking and planning for the long-term, and she emphasizes, “A financially mature person is one who has insight in the possible consequences of money decisions: the impact on him-/herself, family and personal finances.”

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Learning To Budget

Get into the routine of budgeting regularly. Sit down and take a look at what you have coming in every week or month, what has to be done, and how you’ve actually been spending your money. Seeing it at a glance like this is a great way to see where money has to go and where you can cut down.

If you need a little help, there are some great budgeting software and apps out there that allow you to track your cash flow right on your phone or computer.

Expert Interview: Creating a Budget You Can Stick To: Tips From a CFP

Savings

Are you putting away as much as you should? The U.S. Bureau of Economic Analysis says that the personal savings rate as of September 2023 was only 3.4%. According to the BEA, “The U.S. personal saving rate is personal saving as a percentage of disposable personal income. In other words, it’s the percentage of people’s incomes left after they pay taxes and spend money.”

Savings are essential, and it doesn’t have to be that hard. If you put away just $10 per week for ten years, you’ll have $5,200 stashed away when you need it. Plus, you’ll have interest! So, what you aren’t saving today can impact your financial future. Times may be challenging, but even saving a few dollars a week can make a difference.

Debt

According to The Motley’s Fool The Ascent, the average credit card balance is $5,910. How much is yours clocking in?

As a financial adult, it’s about building your credit score and learning how to use the credit you have access to in a responsible way.

Use some of these pointers when tackling your credit:

Avoid using one debt to settle another. This knocks your credit score and it’s the quickest way to get caught up in a seemingly never-ending spiral of credit.
Pay the installments on time. If and when you can’t, it’s always better to contact your credit provider and inform them you’re having trouble. In most cases, it will be taken into account.
Always pay more than the minimum amount when you can. This improves your credit score, and you’ll settle your debt faster.
Remember that credit should be working for you. It provides movement room in an emergency, but a huge financial burden if that emergency strikes and you have no available credit to use.

Retirement

Isn’t it too early to think about retirement? Nope.

If 69% of Americans don’t have less than a grand in savings, consider what this could mean for retirement savings overall. Use this calculator from the SSA to calculate your retirement age. It’s never too early to start preparing for your retirement, and a financially mature adult can look far enough into the future to see that they should be preparing for this sooner rather than later.

Are you prepared for retirement? How about the unforeseen?

We’re all going to get sick, and we’re all going to die and not in an Apocalypse Now kind of way, either. Have you prepared for the inevitable?

Things like health and life insurance are often the last things people think about when they sit down to budget, while they should really be one of the first.

Are you protected in the event of serious illness or disability? Just because you’re healthy now doesn’t mean it will stay that way. Financial maturity means being able to look ahead.

Expert Interview: What You Need To Know Before You Buy Life Insurance

Being a financial adult isn’t limited to your age. Some people are more financially grown up at 25 than others will be by 65. It’s all about how you start preparing for your financial future.

It’s never too early or too late to become a financial adult.