Turning 26? Make These 16 Money Moves and Level Up to a Full-Blown Adult
So, you’re turning 26. Congratulations, not only are you officially kicked off your parents’ insurance, you’re now closer to 50 than you are to your birth!
What, is that not the best way to ring in a birthday?
Before you start mourning your wasted youth and add “walker” to your birthday wish list, take a deep breath and remember: The best years are yet to come! Or that’s what people say at least.
But one thing is for sure, as a freshly turned 26 year old, it’s time to take the final steps towards becoming a full-blown, financially healthy adult.
16 Grown-up Money Moves to Make When You Hit 26
Here are some smart money management tips every 26-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 26 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?
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. Start Looking Into Life Insurance
You may think 26 is too young to start thinking about life insurance, but if you’re building a life, you should protect it.
That could mean you already own your dream business. Or it could mean little ones who look up at you with awe as you read them bedtime stories. It could mean that house on a few acres with the big porch you always wanted.
You’re building your dream life. If that includes a family, the last thing you want is to leave them without any financial support once you’re gone.
Maybe it’s time to think about life insurance. It doesn’t have to be the uncomfortable experience you might expect. Some newcomers in the industry are updating the old model.
Ethos, for example, can get you term life insurance in less than 10 minutes — with no medical exam — for coverage up to $1 million. Ethos offers a digital application, and customer service is available if you have questions.
It partners with a major life insurance carrier to quickly offer policies as low as $6 a month. It’s helped thousands of folks access term life insurance, including independent contractors who use Uber, Postmates, TaskRabbit and other gig apps.
3. Let This Company Help You Get Rid of Your Credit Card Debt
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.
4. 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!
5. Get Into the Investing Game
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.
6. Get Paid When You Swipe Your Credit Card
At your age, you’re probably finally realizing that credit cards aren’t necessarily evil. You just have to be smart about how you use them. Oh, and isn’t it time you got one that gives you something back?
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. Get signed up — and 0% intro APR for 15 months — here.
7. Negotiate Your Bills Down Using Trim
Being 26 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 33% of the savings tab, and you get the rest.
8. Get Your 401(k) in Formation
So you’re 26, 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).
9. Get Smart About Shopping
By 26, you’re probably a shopping pro — no denying that. But what if you could go from a shopping pro to a shopping expert?
By simply saving your receipts, you can start earning cash back when you shop. And if earning money every time you walk into Target doesn’t scream, “I just leveled up in adulthood,” I don’t know what does.
If you’re not earning cash back when you shop, you’re basically missing out on free money.
We know it sounds strange, but Ibotta will pay you cash for taking pictures of your grocery store receipts.
Here’s how it works: Before heading to the store, search for items on your shopping list within the Ibotta app. When you get home, snap a photo of your receipt and scan the items’ barcodes.
Plus, you’ll get a $5 sign-up bonus after uploading your first receipt.
Don’t feel like leaving home? No worries. You can earn cash back online when you shop through Ebates, a cash-back site that rewards you nearly every time you buy something online.
We love it around here, because it’s an instant way to save on everything you buy. For example, Ebates gives you 10% cash-back on online purchases at Walmart.
Plus you’ll get a free $10 gift card to Walmart for giving the site a try.
To earn your gift card:
- Sign up for Ebates with your email or Facebook account.
- Use the Ebates portal the next time you need to buy something. It’s connected to thousands of stores, including Walmart, Amazon and Target. You’ll need to make your first purchase through the site within 90 days and spend at least $25.
- Your account will be credited with rewards points you can cash in for your $10 Walmart gift card.
10. Find Your Free Money
You’re not living paycheck to paycheck anymore. And that’s no accident.
You take charge of your money and have started to build your personal wealth. You have investments, savings accounts and credit cards. You enjoy monitoring your accounts and making the right moves. Retiring early just may be on your bucket list if you can stick to your budget.
It just gets… complicated.
You’re on the right track. Make staying there easy with the Empower app.
Empower helps you organize and track your financial goals. Simply link your accounts, and every time you log in, you’ll see a simple snapshot of where you stand on your monthly budget. Are you above or below the line? In one second you’ll know whether you’re on track or need to dial things back a bit.
Empower even has a cool “find free money” feature. It’ll do things like negotiate your cell phone bill, review your insurance coverage and cancel unwanted subscriptions.
11. Get Rewarded Just 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.
12. Get to Know Your Credit Score
Being a real adult — at least as real an adult with 26 years 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 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.
13. 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.
14. 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.
15. Get Some Passive Income
At 26, 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.
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 26 — 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. Let’s face it, you don’t really want to work any harder than you need to anymore.
16. Start Building Healthy Habits — and Get Paid
By the time you hit 26, 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 of at least $200 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.
Skip the Quarter-Life Financial Crisis
Listen, you’re going to have enough to worry about at 26. 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…
*Current minimum bet is $200/month.
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