Time to Grow up: 13 Money Moves You Need to Make Before You Turn 25

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Kelsey Buxton, Stamatios Kapous, and Justin Morrison head to a happy hour in the downtown area of St Petersburg. St Petersburg, Fla.
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I’m a little less than two years out from my 25th birthday.

And while I hear 25 is the last birthday people really get excited over (something about getting older, quarter-life crises, yada yada), I’m counting down the days until I hit that blessed quarter-century mark.

Why am I so excited to see 25, you ask? Because, as I sit there, awash in the soft, warm glow of 25 melty candles, I’ll be celebrating all the financial benefits this new era (yeah, it’s an era) brings.

For one, renting a car when I go on a trip will get a whole lot cheaper. Without the “young renter” fee, I could save a couple hundred dollars in a single trip.

Plus, although the idea that you magically wake up to a $100 savings on car insurance at 25 is a myth, it is true that your rate should start to drop and become way more negotiable as long as you’re a safe and responsible driver.

So yeah, 25 seems pretty great to me.

But while those two perks are pretty sweet, there are plenty of financial strategies you can implement on your own to make sure your finances are organized and optimized for your entry into the rest of adult life.

13 Grown-up Money Moves to Make When You Hit 25

Here are some smart money management tips every 25-year-old should consider to help set you up for real adulthood — along with some tips on where to funnel the extra money you’re saving on insurance and rental car fees.

1. Consolidate Your Debt So You Can Start Paying It Down Faster

Bills on a rug with a man's hands.
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If you’re sitting on high-interest credit cards from your younger, less responsible years (or, you know, your current years), it can be difficult to get on top of payments and start seeing actual progress in paying those balances down.

You don’t have to let those exorbitant credit card interest rates crush you — consolidation and refinancing might be the answer.

A good resource is consumer financial technology platform Even Financial, which can help match you with the right personal loan to meet your needs.

Even searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. Its platform can help you borrow up to $100,000 (no collateral needed) with fixed rates starting at 4.99% and terms from 24 to 84 months.

2. Find out If You’re Paying Too Much for Car Insurance

If you’ve hit 25 and your car insurance still isn’t budging, it’s time to shop around for a lower rate.

While there’s no way to completely avoid paying for car insurance if you own a car, one way you could save money is by shopping around and comparing rates at least once a year.

Just like you compare the prices of flights, shoes and laptops before purchasing, why not compare car insurance?

The Zebra, an online car insurance search engine that offers “insurance in black and white,” compares your options from 204 providers in just a few minutes.

Thirty-two-year-old Artie Januario was paying $95 a month for car insurance, and because one of his best friends was his insurance agent, Januario didn’t question it. (Yikes.)

After a cross-country move from Boston to Austin, Texas, he decided to try out The Zebra’s services. Within half an hour of starting his search, Januario had new insurance, and his monthly payment was just $65 — a pretty big deal since car insurance rates in Texas are generally higher than those in Massachusetts, where he’d been living before.

Head over to The Zebra’s search platform to see what it can do for your rates.

3. Get to Know Your Credit Score

A credit sesame email is seen on a cell phone.
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Being a real adult — at least as real an adult as a quarter century of knowledge and wisdom makes you — you have to understand how and why your credit score exists, and what you can do to make it better.

But to create a plan to bring your score up to a “yeah, that’s pretty good for a person your age” level, you have to first know what you’re dealing with.

Do you have credit card debt? Is your name attached to any unpaid loans? Are you behind on medical or utility bills you didn’t know about?

Your credit report will give you this information.

You can get a free copy of your credit report once every 12 months from each of the three major credit reporting bureaus.

If you want to keep a closer eye on your credit, get your credit score and “credit report card” for free each month from Credit Sesame. This website breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how you might address it.

Jerry Morgan signed up for Credit Sesame, and in about six months he was able to increase his credit score 120 points thanks to the platform’s suggestions and resources.

4. Get Your 401(k) in Formation

So you’re 25, you’re contributing to a 401(k) and you’re feelin’ pretty good about your road to retirement.

But is your 401(k) working as hard as it could be? (Spoiler alert: Probably not.)

Let’s be real, though. Tapping into that account and deciphering the information — or lack thereof — can be hard.

When Kelsey Buxton opened her 401(k) account back in November of 2016, she had big plans to learn, manage and optimize her investments.

“But that’s a full-time job,” she says. “That’s what a financial adviser is for.”

Luckily, there’s a robo-adviser for that. Blooom, an SEC-registered investment advisory firm, will optimize and monitor your 401(k) for you.

It gives you an initial 401(k) checkup for free, and you’ll get to know your account a little more intimately. Find out if you’re paying too many hidden fees, have the appropriate amount invested in stocks versus bonds, that kind of fun stuff.

After that, the tool is $10 a month to use to continue to monitor your retirement account. Let Blooom know your target retirement age, and it can help you get there by investing more and less aggressively.

After finding Blooom, Buxton realized she wouldn’t need to shell out for a financial adviser — or spend countless hours learning the intricacies of investing. Blooom rebalanced and maximized Buxton’s investments, and will occasionally tweak her account when there’s a smarter option.

Buxton can still go into her account and change her investment preferences, but for the most part, she lets Blooom do its thing.

“All of the funds and stuff can get overwhelming, so I like the idea of having someone manage it for me but I can still tweak it if I learn more about it,” she says.

The best part? Buxton is now on track to retire years earlier than 70 — the age originally projected by her 401(k).

5. Upgrade to an Adult Bank Account

Sushil Cheema enjoys gelato while making a run to the atm in downtown St Petersburg.
Carmen Mandato/ The Penny Hoarder

That student checking account you opened in college just isn’t going to cut it when you head into the adult world.

If you’re ready to upgrade to a bank account that doesn’t treat you like an irresponsible young person, consider opening an account with Chime, an online-only bank account that offers some unique features other banks haven’t caught on to yet.

Chime doesn’t charge overdraft fees, monthly maintenance fees, foreign transaction fees or minimum balance fees, and customers have access to thousands of fee-free MoneyPass ATMs around the country.

Chime also has an automatic savings feature that will round up your debit card transactions to the nearest dollar and dump the change into savings.

Samuel Demeny and his boyfriend, Thomas, are hoping to move from Houston, Texas to the Pacific Northwest in the near future, but want to save up some money first. Luckily, Chime is doing the heavy lifting for them.

Both of them bank with Chime and are taking advantage of the round up tool to save for moving expenses, and the process has been pretty effortless.

“We can pay for a lot of things up front, because we both use Chime, and the money’s saved,” Demeny explains.

Chime customers can also receive their paychecks up to two days before payday when they set up direct deposit to a Chime Spending account. Demeny gets his paycheck two days ahead of his coworkers — on Wednesday instead of Friday.

“The fact that I’m paid on Wednesday versus Friday… helps me budget before the weekend even starts,” he explains, “so … I can set up my plans accordingly without overspending.”

Another reason Demeny and Thomas like banking with Chime? “Their customer service is top-notch,” Demeny says. “…You can send a text message and within 10 or 15 minutes have a response.”

Plus, it only takes about five minutes to sign up. The company verifies your personal information, takes note that you’re at least 18 or older (which is fine, because you’re turning the big 2-5!), then you’re good to go. No opening deposit required.

6. Get Into the Investing Game

It’s no brilliant secret that investing can be a smart way to make money.

Sometimes, though, it feels restricted to a few wealthy elite.

But Stash is different. This app lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000.

Stash curates investments from professional fund managers and investors and lets you choose where to put your money — but it leaves the complicated investment terms out of it.

You just choose from a set of simple portfolios reflecting your beliefs, interests and goals.

Bonus: Right now, The Penny Hoarder is teaming up with Stash to fund your first investment — so you’ll get a $5 bonus to get started!

7. Start Keeping Your Receipts

Man using calculator and calculate bills in home office.
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Keeping your receipts is another “I’m in my 20s and have to start being an adult” thing to do. But did you know those receipts can earn you money back on purchases?

Ibotta is an easy-to-use cash-back app that’s partnered with more than 50 retailers, just about anywhere you’d do any kind of shopping, making it easy to get money back from all those receipts you’re saving.

Penny Hoarder Colleen Rice has more than $300 in cash back to her name, thanks to Ibotta.

Here’s how it works: Before heading to the store, search for items on your shopping list within the app. Strawberries? Check. An ear of corn? Check. Add each cash-back opportunity to your list in the app.

Then shop.

When you get home, snap a photo of your receipt and scan the items’ barcodes with your phone’s camera.

Bam. Cash back.

Some cash-back opportunities we’ve seen include:

  • 25 cents back for any item.
  • 25 cents back on strawberries.
  • 50 cents back on frozen fruit snacks.
  • $1 back on a box of tea.
  • $5 back on a case of Shiner Bock beer.

Notice a lot of those aren’t tied to a brand — just shop for the staples on your list, and earn cash back!

Ibotta is free to download. Plus, you’ll get a $10 sign-up bonus after uploading your first receipt.

8. Start Building Healthy Habits — and Get Paid

By the time you hit 25, you might feel like your habits (good or bad) are set for life — but they certainly don’t have to be.

It can be incredibly difficult to find the motivation to build better habits, though, whether those habits are money or health related. Luckily, there’s a way to combine both.

A company called HealthyWage will literally pay you for losing weight.

In 2016, Teresa Suarez was frustrated by her own lack of motivation — and by the thought of a possible future in which she continued to ignore her health.

“I knew I could be at 300 pounds within months,” she recalled.

So Suarez signed up for HealthyWage.

She bet $125 per month that she would lose 60 pounds in six months. When she achieved that goal, she won a whopping $2,415.28 — more than tripling her initial investment in herself.

Betting on herself and knowing she would lose the money if she didn’t follow through was the kickstart Suarez needed to actually make lasting lifestyle changes.

Plus, participating in the HealthyWage challenge “totally changed the way I think about eating and exercise,” she explained.

Not only are you getting more healthy, you’re also making some money. How’s that for motivation?

Here’s how it works:

 

  1. Read our full HealthyWage review, and sign up.
  2. Define a goal weight and the amount of time you’ll give yourself to achieve it.
  3. Place a bet on yourself ranging from $20 to $500 a month.

Depending on how much you have to lose, how long you give yourself to do it and how much money you put on the table, you could win up to $10,000.

9. Build a Savings Account You Can Be Proud of

Carla Garcia relaxes on her phone in between classes on the University of South Florida Campus
Carmen Mandato/ The Penny Hoarder

Saving money is tough. But it’s a rite of passage into adulthood to at least have an emergency fund on hand in case of sudden car repairs or vet bills.

So what if you could save in a way where you wouldn't even notice?

Digit makes that possible.

This innovative app automates saving for you. Simply link it to your checking account, and its algorithms will determine small (and safe!) amounts of money to withdraw into a separate, FDIC-insured savings account.

Using this set-it-and-forget-it strategy, Matt Wiley (a self-described “Bad Saver”) managed to save up $4,300 without noticing.

“I was intrigued by the idea of an algorithm pulling money out of my account in ways I wouldn’t notice,” Wiley says. “I was working my first job out of college and basically living paycheck to paycheck, so I definitely hadn’t been putting anything aside. It seemed worth a try.”

Digit has a no-overdraft guarantee, meaning it would never pull money out of Wiley’s account if he couldn’t afford it.

From May 2015 through the end of that year, Digit helped Wiley save $607. In 2016, it was another $1,884. In 2017, he managed to put away another $1,857.

If you end up needing your saved up money sooner than expected, you’ll always have access to it within one business day. Wiley ended up needing to use his savings for wedding expenses and a move from Florida to New York.

The fact that he had savings to fall back on was huge, and meant he wouldn’t have to rack up credit card debt to cover some basic life expenses.

Digit is free to use for the first 100 days, then it’s $2.99 per month afterward. As Wiley points out, that’s way less than Netflix — and it totally worth it.

“For people like me [he’s talking about all the Bad Savers out there], not having to think about it is the best way to save.”

10. Find a Side Gig for Some Extra Cash Flow

At 25, you’re probably toward the bottom of the career totem pole — and that probably means you could stand to have a little extra money coming in.

So why not find a side gig that will give you a little extra income each month?

TaskRabbit helps you connect with people in your area who need help getting things done — anything from picking up dry cleaning to calling customer service and tolerating the hold music.

Keep an eye out for virtual tasks, which are mostly centered around personal assistance, administrative work or research help. You can do those and earn money without even walking out your door.

Rest assured you won’t be getting paid pennies to solve someone’s Excel woes. Check out these tips from users who make more than $2,000 a week through the app.

11. Deal With Any Looming Medical Bills You Can’t Shake

Shocked man holding some documents on sofa livingroom
LSOphoto/Getty Images

Medical bills can blow a huge hole in your finances. In fact, they’re the leading cause of bankruptcy in the United States, reports USA Today.

However, navigating your way through the world of health care and health insurance is hugely complicated and complex. Why not enlist a little help?

For that, check out Joany, a technology company that’ll help you deal with your medical bills. It can help you understand bills; and detect billing errors, overcharges and other inaccuracies.

Joany’s free health care concierge service helps people compare health plans, seek out doctors, check health plan coverage and more.

Start using the services by submitting your basic information and any helpful documentation regarding your health insurance query, such as a picture of a doctor’s prescription or medical bill.

It’s faster if you have health insurance coverage, but Joany’s team will still try to find solutions for you even if you don’t.  

The service is free to you, because Joany gets paid through your health insurance provider.

12. Create a Budget

Listen, now that you’re in the second half of your twenties, it’s no longer cute to have a budget with just three line items — especially not when two of them are beer.

Nope, now that you’re 25, it’s time to whip your budget into shape. Or create one for the first time, if you’ve never tried before. We’ve got some tips that will help you create a budget that works for you — meaning you can still contribute some money to your beer fund.

The most basic budgeting rule is the 50/20/30 rule. It’s not a science, but it’s a great jumping off point that will help you understand how much of your paycheck you should allocate to different areas of your life.

Once you’ve got the basics down, follow these seven steps to creating a budget that fits into your life — not one you have to fit your life into.

13. Negotiate Your Bills Down Using Trim

Young Couple Relaxing On Sofa, Chatting Smiling, Changing Channels And Surfing Internet.
Kosamtu/Getty Images

Being 25 means a lot of really cool things, but it also means you’re totally on your own when it comes to bills — both the payments and the whole dealing with the utility company thing.

And if you’ve had to chat with a representative from your internet/cable company recently, you know how long you can sit on hold.

That’s why it’s time to call in a robot. The personal finance bot Trim will negotiate your cable or internet bills down for you.

It works with Comcast, Time Warner, Charter and other major providers.

You can sign up simply with Facebook or your email address. Then, upload a PDF of your most recent bill, and Trim’s AI-powered system gets to work. If at first it doesn’t succeed, it’ll keep negotiating until it can save you some money.

Also, if you have any outages, Trim believes you deserve a credit, and it’ll handle that for you.
Trim takes 25% of the savings tab, and you get the rest.

Skip the Quarter-Life Financial Crisis

Listen, you’re going to have enough to worry about at 25. Those existential quandaries are going to start hitting hard and fast, and the last thing you’re going to want to funnel valuable brain power to is money.

But if you can use these tips and tricks to set up your finances (and your life) for success, you’ll have one less thing to think about.

Well, at least until the big 3-0 comes a’ knocking…

Grace Schweizer is a junior writer at The Penny Hoarder.

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