10 Grown-up Money Moves to Make Before You Turn 24
You’re turning 24, and honestly it’s starting out with a bit of a struggle. There aren’t any clever Instagram captions for 24th birthdays…
But seriously. Turning 24 is admittedly all right. It’s not 21, and it’s not quite a quarter of a life. It’s just 24, and that’s fine.
Why not take time this year to fine-tune your finances? We’ve got some ideas to get you started.
10 Smart Money Moves to Make Before You Turn 24
Here are some smart money management tips every 24-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. Knock Up To $715/Year Off Your Car Insurance in Minutes
When was the last time you compared car insurance rates? Chances are you’re seriously overpaying with your current policy.
If it’s been more than six months since your last car insurance quote, you should look again.
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. Give Your Credit Score a Boost — Add up to 300 Points
A really easy way to do this is to get a “credit report card” from Credit Sesame.
Credit Sesame is like your favorite teacher from high school — without the pop quizzes.
It gives you a free credit score, plus lays out your credit history so you can see exactly how much money you owe and to whom. It even tells you your monthly payments and interest rate, as well as which debts (if any) are in collections.
And you don’t have to stay home to do it. The Credit Sesame app lets you keep track of your credit score and ways to improve it — on the go!
To keep a closer eye on your credit, you can also get a “credit report card” for free from Credit Sesame. It breaks down exactly what’s on your credit report in layman’s terms, how it affects your score and how you might address it.
James Cooper, a motivational speaker, raised his credit score 277 points using Credit Sesame. Now he talks to high school students about the importance of having good credit and uses what he’s learned through Credit Sesame as a blueprint for his lessons.
“We want to touch the Z Generation,” Cooper says “We’re not in the business of fixing credit. We want to get to you before you have to fix your credit.”
3. Invest in Real Estate (Even If You’re Not Wealthy)
Want to try real-estate investing without playing landlord? A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
In addition to four rental properties, Christopher and Meghan Miller have invested in a diversified portfolio of real estate projects across the country — from Washington, D.C. to Los Angeles — through Fundrise’s automated investment experience.
“I don’t have to manage them; I don’t have to do the work to improve the properties; I don’t have to find tenants, evict tenants,” Christopher says.
They follow the progress of each project they’ve invested money into through Fundrise, and Christopher receives automatic payments directly into his checking account.
But remember: Investments come with risk. While Fundrise has paid distributions every quarter since at least Q2 2016, dividend and principal payments are never guaranteed.
You’ll pay a 0.85% annual asset management fee and a 0.15% annual investment advisory fee.
4. Freeze Your Credit Cards
You’ve heard the whole “freeze your credit” advice. We agree: It’s a smart practice. But in order to save money, freeze your credit cards.
Literally — in the freezer they’ll go.
Sure, it sounds extreme, but if you tend to make impulsive credit card purchases, stick your card in a Ziploc bag, submerge it in a canister of water and slide it into the freezer. When you’re tempted to spend, you’ll have to wait for the card to thaw, requiring you to think through your spending decision.
5. Open an Account Just For Your Savings
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’s Spend and Save account — you’ll pay no monthly fees, and you’ll earn up to 2.00% APY on your savings.
Set a goal to start socking away just $25 per month. You’ll be amazed how quickly you have a huge emergency fund built up.
6. Secure $1 Million in Life Insurance for Just $25/Month
“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 advisors.’”
You might still consider a basic life insurance policy, which can be useful if you have loved ones who rely on your income — a significant other, a child or even a relative you help out financially.
A company like Bestow offers you an easy way to compare and buy life insurance. Unlike traditional providers, this online-only platform provides an easy way to apply, and it offers instant quotes from top carriers online to help you make a quicker decision.
To get your quotes, you’ll just enter some info about yourself and your health online. Once you choose a life insurance company, you can apply right online, and a Bestow rep will give you a quick call to ask a few follow-up questions.
7. Let This Company Pay Off Your Credit Cards
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape…
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 3.99% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
It takes two minutes to see if you qualify for up to $50,000 online. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.
8. Invest in Envelopes
Buy a box of envelopes. Now stuff some cash inside each one.
OK, so it’s not that simple but the envelope budgeting method, popularized by Dave Ramsey, helps folks who tend to overspend. Each month or each pay period, take out a chunk of money. Now divide that money up: groceries, dining out, personal care, etc. Then, stuff each envelope with your spending limit.
This budgeting method helps you be more mindful of your spending and keeps you above the red. Money management made simple.
9. Ask Your HR Department These Questions
Got a new job? Here’s what to do next: Enroll in your company’s 401(k) plan ASAP so you can start saving for retirement. And yes, it fits in your budget!
As much as you want to be prepared for present-day responsibilities, the last thing you want is to leave old(er), future-you with bills, bills, bills and more bills.
If your employer sponsors a 401(k) plan, you should have access to people who can answer questions in your best interest — AKA HR.
And you’re going to have questions, because, well… 401(k)’s are tricky. To get the most out of your plan, here are some important questions to ask to ensure you’re putting your retirement savings in the best possible hands:
- Does your employer match?
- Where is your money invested?
- Can you rollover from your existing 401(k)?
- What fees are you paying?
- What can you do if your plan sucks?
10. Invest Your Spare Change — and Get a $5 Bonus
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 — with $5 — 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. And the sooner you start, the more you could potentially make. For example, Penny Hoarder Dana Sitar was able to save at a rate that would let her stash $420 away per year.
At that rate, you could set aside $1,000 in about two and a half years — without trying.
But the beauty is you can set your own pace with Acorns’ features, so if you want — and can afford — to invest $1,000 faster, go for it.
The app is $1 a month for balances under $5,000, and you’ll get a $5 bonus when you sign up.
Brace Yourself for That Quarter-Life Crisis
Listen, people joke about having a quarter-life crisis, but it’s real. Those existential quandaries are going to start hitting hard and fast next year, 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…