Turning 23? Get Your Finances on Track This Year With These 19 Moves
Haven’t you heard? No one likes you when you’re 23.
Nah, we’re just kidding. Turning 23 might not be the most exciting life event, but it is a pivotal one.
You’ve probably finished up school, secured a job. Now you’re making a real income… and what the heck are you supposed to do with these paychecks?!
It’s definitely time to figure out your financials.
19 Grown-up Money Moves to Make When You Hit 23
Here are some smart money management tips every 23-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. Find out If You’re Paying Too Much for Car Insurance
If you’ve hit 23 and your car insurance rates are insanely high, 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?
And if you look through a digital marketplace called SmartFinancial, you could be getting rates as low as $22 a month — and saving yourself more than $700 a year.
It takes one minute to get quotes from multiple insurers, so you can see all the best rates side-by-side. Yep — in just one minute you could save yourself $715 this year. That’s some major cash back in your pocket.
So if you haven’t checked car insurance rates in a while, see how much you can save with a new policy.
2. Get a 100X the Normal Interest Rate
Operating everything out of one account can make your finances muddy and contribute undue stress to your money management.
To simplify, open an account dedicated to saving, and put your money to work. One of our favorites is Aspiration — you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
You’ll get access to two online-only accounts: one for spending and one for saving. The spending account comes with a debit card that earns 0.5% cash back on all your purchases, plus free ATMs, so you can easily access your money when you need it.
After you open your Aspiration account, use it to split your income:
- Automatically deposit a portion of your income into your spending account, and use that to cover basic expenses like rent and bills, plus fun stuff; like eating out, shopping or going on vacation.
- Deposit what’s left into your Aspiration savings to keep it out of sight and let it grow. You’ll earn 2.00% APY as long you deposit just $1 a month. We recommend squirreling more when you can, but we like that you won’t lose the perk when you can’t.
3. Look Into Life Insurance
No, this isn’t a subtle dig about getting older — it’s an important step for anyone who has people who rely on them financially.
Even though life insurance is something everyone in their late 20s should consider, you don’t have to run out and purchase the first life insurance policy someone pitches you.
“The biggest mistake I see millennials making is being duped by insurance salesmen,” says Andy Yadro, a financial planner with Googins Advisors in Madison, Wisconsin. “Everyone needs insurance, but a very small subset of young people need the insurance that is sold by most ‘financial advisers.’”
If you’re mostly healthy, consider purchasing term life insurance online from Ethos. It partners with a major A-rated life insurance carrier to provide policies for a low price. For example, $30 a month could get your family $1 million of coverage.
Anyone, including independent contractors, can secure term life insurance through Ethos without a medical exam or extensive paperwork; just fill out a digital application.
4. Consolidate Your Debt So You Can Start Paying It Down Faster
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 Fiona, which can help match you with the right personal loan to meet your needs.
Fiona searches the top online lenders to match you with a personalized loan offer in less than 60 seconds. If your credit score is at least 620, 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.
5. Get a Lower Interest Rate on Your Student Loans
For some, a lower interest rate could be one of the best steps to paying off student loans.
Try getting a lower interest rate on your federal and private loans by refinancing with a company like Credible. Other companies offer similar services, but we like that the average Credible user saves about two interest points on their current federal loans.
Refinancing will generally mean replacing your laundry list of loans with one (or a few) loans that bring all of your student debt under one umbrella.
This could simplify your life with one monthly payment, instead of several. It may also lower your monthly payment, improve your interest rate and/or give you more time to pay.
It might seem like a small difference, but a lower interest rate can mean a lot of savings over time. It’s helping grad Ashley Williams save more than $18,000 in interest over the life of her loan!
6. Don’t Think You Can Afford to Invest? Start With $5
If you’re going to be a real adult who makes small talk at parties hosted by other people your age, investing is a good place to start. And sure, becoming an investor sounds intimidating — but it really doesn’t have to be.
If you’re like most of us and wish your money would just take care of itself, consider starting an investment account through Acorns.
You can start small and stack up change over time with its “round-up” feature. That means if you spend $10.23 at the grocery store, 77 cents gets dropped into your Acorns account.
Then, the app does the whole investing thing for you.
The idea is you won’t miss the digital pocket change, and the automatic savings stack up faster than you’d think. For example, we reviewed how Penny Hoarder Dana Sitar was able to save at a rate of $420 a year!
At that rate, you could set aside $1,000 in about two and a half years — without trying.
The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
7. Get Paid When You Swipe Your Credit Card
If you’re not using a rewards credit card for everyday purchases, you’re missing out on free money.
You just have to be sure you don’t get too carried away with those purchases — and that the card is paid off at the end of each billing period.
Here’s an option we like: It’s the Chase Freedom Unlimited card. Its claim to fame? You’ll earn an unlimited 1.5% cash back on all your purchases. Plus, if you spend $500 in your first three months of opening the card (hi, groceries), you’ll pocket a $150 bonus.
There’s no annual fee, and the cash-back rewards don’t expire. We checked Credible’s annual rewards calculator, and it estimates $417 in annual rewards based on our spending habits.* (You can enter your unique spending habits and see what you’d earn, too.)
Get signed up — and 0% intro APR for 15 months — here.
*Annual Rewards amounts will change based on the amounts you enter. The monthly spending category names and definitions may vary among issuers, and categories may not align one-to-one.
The information for the Chase Freedom Unlimited card has been collected independently by The Penny Hoarder. Opinions expressed here are the author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. The Penny Hoarder is a partner of Credible.
8. Become a Real Estate Investor (Yeah, Before You’re Even 30)
What’s the most adulting thing you can think of?
Stumped? OK, here it is: Investing in real estate.
The cool news is you can start investing in real estate without having to play landlord, and we found a company that helps you do just that.
Oh, and you don’t have to have hundreds of thousands of dollars, either. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.
Katie Smith, who recently graduated from Georgetown University in Washington D.C., has always been a saver.
But after years of watching her carefully tucked away funds sit in a low-interest savings account, Smith decided it was time for her money to start making more money — so she decided to invest it in real estate through a company called Fundrise.
While she technically only needed $500 to get started, Smith decided to invest a little more than that. “It’s a pretty low barrier to entry in terms of the amount of money you need,” Smith said. “I invested a couple grand, and I’ve been really pleased with the results.”
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
“I can go into my Fundrise account and see what I actually own,” Smith said. “I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast. Bits and pieces of apartment complexes in Texas and Denver, a construction loan, a mixed-use property.”
9. Negotiate Your Bills Down Using Trim
Being 23 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.
10. Get Your 401(k) in Formation
So you’re turning 23, and if you’re already contributing to a 401(k), you’re probably 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).
11. Start Keeping Your Receipts
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.
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 $5 sign-up bonus after uploading your first receipt.
12. Protect Your Home and Belongings
You’ve worked hard and for a long time to create your home. The stuff you’ve accumulated, whether you rent or own a home, is worth protecting.
If you have homeowners or renters insurance, you might be paying too much for it. Try shopping around.
If you’ve never looked into it, start by getting a free quote.We recommend the online insurance company Lemonade, through which renters insurance starts at $5 a month and homeowners insurance starts at $25 a month.
Beyond affordable rates, Lemonade adds a layer of transparency you don’t often see in the insurance world. Instead of profiting extra when it doesn’t have to pay out claims, the company keeps a set 20% of your premium for itself, and 80% goes into a pool for paying claims. Money left over after paying claims each year goes to a cause of your choice.
That also means Lemonade isn’t going to be super stingy about granting customers the claims they deserve — ’cause the money isn’t going into its pockets.
Lemonade is available in Arizona, California, Connecticut Georgia, Illinois, Indiana, Iowa, Maryland, Michigan, New Mexico, New York, Nevada, Oregon, Pennsylvania, Texas, Ohio, Rhode Island and Washington, D.C.
OK, so now that you know Lemonade has your back, here’s how to get a free quote. It’s easy — and you can do it all online. (Nope, it won’t hurt your credit score!)
- Click “Check Our Prices.”
- Get to know Maya, Lemonade’s chatbot. She’s nice and will ask you a few questions.
- Once you complete the application, you’ll receive a quote within a minute or two.
It’s easy-peasy, lemon-squeezy. Plus, at the end of the day, you’ll feel better knowing your hard-earned belongings are insured. After all, when life hands you lemons… (OK, we’re done.)
13. Find Your Free Money
Clarity Money* is a free app that helps you see, organize, and take control of your finances.
The way it works is simple. You just download the app, connect your existing accounts, and get ready to learn more about where your money’s disappearing to… and how to keep more of it.
Clarity Money analyzes and uses your spending history to provide budgetary insights. It’ll show you exactly how much you spend in different categories, like bars and restaurants, as a percentage of your total expenses.
But it’s not just a recap of your weekend spending with pretty graphics.
It also gives you the tools and information you need to start making better financial choices. And they’re all super-easy to use, and accessible right inside the app.
14. Get Rewarded for Paying Your Bills on Time
Your mom probably gave you an allowance for washing the dishes and sweeping the floor when you were a kid. Now all you get for doing it is a kitchen that’s clean for, like, 15 minutes.
As an adult, you don’t typically get rewards for doing things that are expected of you… until now.
This app kind of rules them all: MoneyLion, a free all-in-one app for managing your personal finances.
MoneyLion offers rewards to help you develop healthy financial habits and will literally pay you for logging onto the app.
You can earn points in the rewards program by paying bills on time, connecting your bank account or downloading the mobile app.
You can redeem those points for gift cards to retailers like Amazon, Apple and Walmart.
If credit cards aren’t your thing, MoneyLion is like having a rewards credit card without the temptation to overspend.
The app also connects with all your bank, credit card, student loan and other financial accounts. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.
15. Know Your Credit Score
Your credit reports are basically the Holy Grail of your finances — and your life.
Financially, they can influence many of your big life decisions, like buying a house or a car. These decisions can become a whole lot more difficult if your credit reports have an error.
This is easy to prevent, though, especially if you just check in on your credit reports (you’ve got three major ones) every so often.
One option is to use a free app like CreditWise® from Capital One®. There, you’ll get a free TransUnion® credit report, which you can review for signs of error, theft or fraud. It’ll even give you personalized suggestions to help you improve your credit score.
16. Get Some Help Paying Your Credit Card Bills
Carrying more than one credit card balance can feel a bit like herding cats. Just when you think you have one under control, you realize you’ve let a different one slip away.
High interest rates and late fees can make it feel like you’ll never get those bills under control.
That’s where Tally comes in. It’s a simple app that lets you store and manage your credit card payments in one place, optimizing the amounts and times.
Simply download the iOS app, scan in your credit cards, and if you qualify (with a minimum credit score of around 675), Tally will give you a line of credit with an interest rate between 7.9% and 19.9%* and use the lower interest rate to make managing your payments easy.
No more missed payments. Lower interest rates. All in one place. And don’t worry, Tally uses bank-level security, so your information is safe.
Tally is currently available in Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Oregon, Texas, Utah, Washington and Wisconsin.
*Your APR (which is the same as your interest rate) will depend on your credit history and varies with the market based on Prime Rate. Accurate as of July 2018.
17. See if You Can’t Cut Back on Your Monthly Bills
It’s important to make sure you’re getting a good deal on any product or service you use, and this is a lot easier than you might think.
Hop on Squeeze, a website that allows you to compare rates for mortgages, auto loans, student loans, renters insurance, and mobile and internet plans (among others) for free.
Say you want to compare internet prices. Based on your location, the site aggregates all your options and shows you companies alongside price points and download speeds.
18. Set up a Passive Income Stream
Passive income is exactly what it sounds like: income that comes to you without you lifting a finger — at least, after the initial setup.
While you can’t expect free money to just appear in your bank account, you can take steps to set yourself up with a cash flow that comes in automatically with little to no upkeep.
Why is it important to have a source of passive income? Well, Brad Hines, who estimates 10% to 15% of his income is passive, puts it this way:
“When zero of your money is passive income, that inherently means every minute you’re not working, you’re not making money.”
To make the most of your down time — like that big trip you’ll take to celebrate turning 23 — set up a passive income stream of your own.
Passive income sources can range from really big (think: owning a business) to really tiny (think: owning a gumball machine).
If you don’t mind the initial work of setting up your passive income streams, the payoff and peace of mind can be sweet.
19. Start Building Healthy Habits — and Get Paid
By the time you hit 23, 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.
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:
- Read our full HealthyWage review, and sign up.
- Define a goal weight and the amount of time you’ll give yourself to achieve it.
- 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.
Seriously… People Still Like You When You’re 23
Listen, 23 might not be the most exciting birthday, but it’s a good year, especially if you can use these tips and tricks to set up your finances (and your life) for success.
And, hey, we still like you.
Disclosure: Clarity Money compensates us when you download the app using the links we provide.