'Adulting 101': How to nail the financial basics and save thousands, starting with your first job
"Adulting" with your money. You've got this.
Your money is like anything else you need to learn. It seems crazy complicated at first, then bit by bit you learn more, until you realize it's more accessible than you thought.
Even though the adult world has many confusing concepts, remember that most people are not geniuses. Yet they manage to navigate, and so can you.
Gradually you will be a full-fledged, salary-earning, tax-paying, money-saving grown-up.
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Age doesn't matter as much as you think, says Paul Gaudio, a certified financial planner at Bryn Mawr Trust in Princeton, New Jersey.
Someone who's 21 or 26 needs the same core principles of financial planning — investing, risk management, estate and tax planning — as people in their 30s, 40s and 50s. "It just changes in terms of focus," Gaudio said.
On a starting salary that has to cover your monthly bills and get you through your days, you may have to do without some things, says Chris Kampitsis, a CFP at the Barnum Financial Group in Elmsford, New York. "We all have choices to make," he said. "For some people, it's living in the suburbs and moving to the city when they get their financial feet under them."
Live on less
"The biggest thing, from Job One, if at all remotely, humanly possible: Immediately start putting 10% of your money into your 401(k)," he said.
Kampitsis is firm on this strategy, if not the amount. If you can't do 10%, then do 5%. And if you can't do 5%, save 1% or 2%, but set a goal of raising the amount.
Learning to live on less than you make from the start of your career means you'll never feel hamstrung by lack of money. "You'll always simply have built your lifestyle and your expenditure around that 90% habit," Kampitsis said. Doing this now is far easier than it will be in 10 years to 15 years, when you could be dealing with wedding costs, mortgages or children.
Take everything you can
It's good to learn early on how to squeeze the most out of your employer benefits. "Maximize those benefits to the maximum extent possible," Gaudio said.
That means saving enough in your 401(k) to get the employer match, if there is one. "That is money you would not get if you didn't put in that contribution," Kampitsis said.
If you feel squeezed by contributing to the retirement plan or an individual retirement account, here's a government gift in the form of a tax credit: the saver's credit, for those with 401(k) plans or IRAs who aren't dependents on someone else's tax return and earn under a certain limit.
The maximum saver's credit can be as high as $1,000 for single filers and $2,000 for married-filing jointly. To claim this tax break, you file Form 8880 with your tax return.
Manage risk
Even if you don't think you have much of value in that first apartment, get renter's insurance.
You'll want to be covered in case of fire or theft, and you can get a rider to cover any special things, such as a piece of expensive jewelry, a valuable painting or a laptop.
The average cost is about $16 a month — a small price to pay, considering what could happen in case a neighbor lets their bathtub overflow.
Don't get carded
Most recent college graduates don't understand how credit cards work, Gaudio says.
If they had a credit card account in college that their parents paid for, they may not even have seen the bill. In that case, they've learned to see it only as a way to pay for things.
Learn to use credit responsibly. Gaudio recommends using credit cards for emergencies, and relying on debit cards, cash or checks for everyday spending. "That way, the balances never build up," he said.
Reality check
In your early 20s, you almost certainly have competing priorities and a starting salary.
You may have student loans to pay down in addition to your other monthly bills. On top of that, you know you should have a couple of months' expenses stashed away in case of an emergency, not to mention the need to save for retirement.
Unless you're in a sales job with an unpredictable cash flow, there's good news. "Your income is a known quantity," Gaudio said. "There's a million ways to create a budget, and I always encourage people to create one."
Hurry! This Stunning 2-Piece Jewelry Set Is Now 82% Off at Macy’s
Diamonds are a girl’s best friend! But let’s face it, the hefty price tags associated with them certainly are not! Not only can we not afford them, but we can barely afford to look at them. Having an Elizabeth Tayor-style piece in our jewelry arsenal is a pipe dream, to say the least. That’s exactly why so many are smitten with cubic zirconia.
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If you haven’t embraced cubic zirconia yet, today is officially everyone’s lucky day. We’ve come across a radiant two-piece set for a seriously affordable price. Right now, this complete set is 82% off at Macy’s! Run — don’t walk!
Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet & Stud Earrings Set Macy'sSee it!
Grab the Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet and Stud Earring Set (originally $100), now only $18, available at Macy’s!
The Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet & Stud Earrings Set is what dreams are made of! Seriously — our jewelry dreams came true the very second we laid our eyes on this dreamy duo.
This low-cost alternative to diamonds is glamorous, luxurious and will make everyone feel like a million bucks. We love how both pieces are set in a stunning sterling silver hardware. The bracelet measures in at 10 inches — so if you’re looking for a dainty, dangly piece that’s comfortable to wear? You’ve met your match!
It also features a bolo clasp closure — which is a complete game-changer if you’re getting ready solo! This piece will slip on your wrist just as easily as it will slip off — and one simple clasp will get the job done.
Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet & Stud Earrings Set Macy'sSee it!
Grab the Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet and Stud Earring Set (originally $100), now only $18, available at Macy’s!
When paired with the earrings, both pieces can easily integrate into our daily wardrobe — making this set an absolute essential for anyone who likes adding a little extra glitz to their looks (especially around this festive time of year).
They’ll easily pair with our date night attire, just as easily as they will elevate a T-shirt and jeans. All in all, it’s an absolute win-win. Oh, and don’t forget this two-piece set is currently 82% off. Talk about a deal to steal, right?
See it: Grab the Giani Bernini 2-Piece Cubic Zirconia Bolo Bracelet and Stud Earring Set (originally $100), now only $18, available at Macy’s!
Not your style? Check out additional Giani Bernini items, more diamond earrings, and women’s jewelry and watch styles also available at Macy’s here!
Check out more of our picks and deals here!
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I Help People Pick Wedding Rings for a Living. Here’s How I Found My Own
Nicholson doesn’t believe in putting down any particular type of ring style—“everyone has different preferences and that’s great. How it should be,” she says—but for customers like herself who prefer something a bit more unique and personal, she warns shoppers to be cautious of designs that have a sudden surge in popularity. “We definitely try to go for styles where you can’t pinpoint the era that they’re from,” she says. “They kind of look vintage but they look modern also.”
This isn’t to say that every recently trendy style, such as a halo cut or cluster rings, should be avoided. But customers should look beyond them in order to determine what truly speaks to their taste. “I like the idea of buying the piece that you’ll keep forever, but sometimes it is really hard to tell if you’re falling into a trend or really just eyeing something you truly love,” she says. She recommends two ways to find clarity.
First, do some historical digging for inspiration from 40, 50, or 100 years ago. “Don't just look at what you’re being marketed with. Do a little bit of research on what rings looked like over time. Does anything speak to you more than the one you got targeted by 10 times today on Instagram?”
Second, Nicholson says buying a forever ring is about considering the materials as closely as you would the design. Alternative stones such as emeralds, sapphires, morganite, or opal may be beautiful, but customers should be aware that they're not as hard as a diamond, she explains. Metals such as 18-karat gold and G-color, VS-clarity diamonds will retain their value over time, even if your taste should change. “If in 10 years this [ring] is really not what you want to wear, then you reset it and adapt it to modern times,” Nicholson suggests; she stresses that both parties in a relationship should be on the same page about this possibility walking into that purchase.
A Ceremony ring
Courtesy of Chelsea Nicholson
For further ring-shopping resources, Ceremony relaunched its own site in January 2020 to introduce a concierge service that helps shoppers through the overwhelming process of selecting a diamond. “We search for each stone as we’re working with the customer,” she explains. The site’s new feature provides a more one-on-one experience to make sure every ring has the look and budget that fits each customer.
Ceremony is one of many brands who set a new precedent for the bridal industry and also focus on allowing individuals to decide for themselves what commitment and partnership looks like. Other examples include brands like Lein, which creates dresses to be worn for the wedding day and any day after; fellow jewelry brand Anna Sheffield, famous for its stackable engagement and wedding rings in unique materials; and Zola, a site that allows couples to create a registry for their honeymoon adventure or a charity close to their hearts instead of asking for a toaster or a gravy boat.
Ceremony is a for-profit business, but it’s also one that opens up questions about why people marry, how they marry, and how they choose to show their commitment through a piece of jewelry. For Nicholson, that symbol is a tri-stone ring; for her fiance, it’s the Rowan III, a wider gold ring. “I got him an engagement ring too,” she says, sharing another unconventional approach to engagement rings, which are almost exclusively marketed for women to wear. “Because we’re having a two year engagement, it’s kind of weird that I’m wearing a ring for two years and he doesn’t have one, so he has a ring that he wears every day.”
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