Turning 21? 12 Smart Money Moves to Make This Year

21st birthday donut
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Turning 21 is a pretty big milestone.

Aside from the ability to legally drink alcohol and all the responsibility that comes with that, your 21st birthday serves as the final stepping stone into adulthood and all the responsibilities that come with that.

And while it’s all rosé-colored glasses for the first few months, you quickly realize just how much a good bottle of your favorite Cab Sav costs.

Financial Tips and Tricks Every 21-Year-Old Should Know

If you’re freshly 21 — or getting close to it — we’ve got some tips and tricks for making, saving and managing your money so you don’t end up blowing this whole adulthood thing on your first try.

1. Have a Cup of Coffee and Assess the Damage

credit score on chalkboard
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Your credit score is important. The better your score, the better deal you’ll get on a mortgage, car loan or credit card. We’re talking big money here.

Even if you’re not buying a house anytime soon, a lousy credit score means you’ll get hit with a high security deposit whenever you rent a car or move into a new apartment.

But did you know your credit score could be inaccurate? One out of five credit reports have an error, according to a study by the Federal Trade Commission.

To keep a closer eye on your credit, get your credit score and 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 to address it.

Because it simplifies everything, you should be able to spot any errors. For instance, if you find an “unpaid” credit card that you know you paid, or a bill in collections you know never existed, you can dispute the incorrect information and raise your credit score.

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.”

2. See Whether You’re Paying Too Much for Car Insurance

General View of the city of Chicago
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For most people, car insurance rates will begin to drop dramatically once you hit 25. But even at 21, you might be overpaying for car insurance and not even know it.

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.

If you’re a smart shopper, you already compare prices, right? So 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.

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. (Question everything, guys.)

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, because car insurance rates in Texas are generally higher than those in Massachusetts, where he’d been living before.

3. Wow Your Friends by Becoming a Real Estate Investor

house for sale in st. petersburg
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Listen, it’s not every day a 21-year-old can say they invest in real estate.

But this one isn’t just for the street cred — it’s also a smart way to dip your toes into the world of real estate investing without handing over thousands (or even hundreds of thousands) of dollars.

Twenty-one-year-old Katie Smith, who recently graduated from Georgetown University in Washington, D.C., had some money sitting in a regular, low-interest savings account.

She knew her money could be making more money and liked the idea of investing in real estate, she didn’t really have “buy a house” kind of money.

Then she heard about Fundrise.

You can start investing in real estate with a minimum investment of just $500, and 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.

“I can go into my Fundrise account and see what I actually own,” Smith says. “I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast.

4. Snag a Free $10 Walmart Gift Card

A close-up of the Walmart storefront logo.
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One of our favorite ways to save is with Ebates, a cash-back site that rewards you nearly every time you buy something online. 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:

  1. Sign up for Ebates with your email or Facebook account.
  2. 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.
  3. Your account will be credited with rewards points you can cash in for your $10 Walmart gift card.

5. Make a Little Wiggle Room in Your Bar Budget

hand holding glass of beer on table
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Look, I understand. You’re finally legal. You’re ready to hit the very bars that have been turning you away for years. (Just remember to drink like a responsible adult!)

But if you’re not careful, it’s easy to blow your entire beer budget in one weekend — after which you’ll be stuck drinking $3 wine at home by yourself while your coworkers hit up happy hour.

Luckily, there’s a way to earn cash back on alcohol.

Yeah, seriously.

Ibotta is an easy-to-use cash-back app that’s partnered with more than 50 retailers offering deals on many of your favorite brands.

The app features both liquor store deals and cash back on drinks from any restaurant or bar.

We’ve seen deals like $5 back on 750-milliliter or 1-liter bottles of Absolut vodka, $3 back on any pitcher or bucket of Budweiser or Bud Light and $3 back on any mixed drink or cocktail featuring 1800 Tequila.

Those are some pretty sweet deals.

Did you know you had so much money just lying around?

6. Cut Your Debt Interest Rates

Credit card being cut with scissors
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Like so many other young people these days, if you grew up in a home where debt wasn’t discussed, you probably weren’t aware of just how easily you could get sucked into the quicksand pit of credit card debt.

And you probably didn’t understand the impact it would have on your young life, either.

If you’re sitting on an account showing a few too many zeros (and not the positive kind), but find yourself unable to dig yourself out because of sky-high interest rates, it might be time to look into refinancing or consolidating your credit card debt.

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

Fiona 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.

All it takes is three easy steps to know what kind of loan you qualify for.

7. Start Investing Like an Adult

Derek Mateo handles cash in Orlando Florida
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As you venture further into adulthood, you’ll hear more and more people at more and more social functions talking about things like investing.

If you want to get ahead of the financial game (the small-talk-at-adult-dinner-parties potential is an added perk), try investing with Stash.

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

The app 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.

Plus, right now, The Penny Hoarder is teaming up with Stash to fund your first investment — so you’ll get a $5 bonus when you enter the code PENNYH!

If you want a more conservative (read: typically lower risk) investment, look into bonds.

Worthy is free app that invests your money in bonds and pays out a fixed 5% annual interest rate — around 100 times more than what you’d get from the bank. And a lot more stable than investing in stocks. You can start investing with as little as $10.

8. Keep Your Spending Top of Mind to Avoid Overdoing It

A small jar filled with cash.
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Out of sight, out of mind, right?

It’s easy to let a sandwich here and a song download there go unnoticed. If seeing your checking account statement each month is a horror story of forgotten debit card charges, we found the app that refuses to let you neglect your finances.

Chime is an online-only bank account that offers some unique features other banks haven’t caught on to yet. Its banking app sends you instant transaction alerts that tell you how much you just spent and your new balance.

No need to log in just to see where your account stands. App notifications let you know with every swipe of the card or automatic withdrawal.

Plus, Chime doesn’t charge overdraft fees, monthly maintenance fees, foreign transaction fees or minimum balance fees. Its mobile app boasts more than 2,000 five-star reviews, making managing money super accessible via iPhone or Android.

Opening an account is free and only takes about five minutes.

9. Let This Financial Assistant Negotiate Your Internet Bill Down

man sitting at a desk by a window at home, paying bills.
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The price of internet — and cable, if you’re still into that kind of thing — certainly isn’t decreasing. If anything, prices are steadily climbing.

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 negotiation 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. Save Without Trying

A man and woman wearing sunglasses hold hands as they walk through a city.
Photo courtesy of Grant Gunderson

Saving money is tough. So what if you could do it 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.

Additionally, savers will receive a 1% bonus every three months.

Using this set-it-and-forget-it strategy, one Penny Hoarder saved $4,300 without noticing — read his Digit review.

If you need that money sooner than expected, you’ll always have access to it within one business day.

Digit is free to use for the first 30 days, then it’s $2.99 per month afterward.

11. Let This Site Find You the Best Utility Rates

Margo Macys is the trusty mascot of a home office in Tampa Florida
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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.

Easy peasy lemon squeezy.

12. Get the Most Out of Your 401(k)

A woman happily jumps into the air.
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You have a 401(k) — kudos for that, but is it doing what you need it to?

If you’re like most people, you have no idea whether your 401(k) is on pace for your retirement or just sputtering along.

Chances are, your 401(k) could be doing a lot better. Take control with help from Blooom, an SEC-registered investment advisory firm that can optimize and monitor your 401(k) for you and keep it speeding toward retirement.

It just takes a few minutes to get a free 401(k) analysis  that will show you whether your investments are allocated properly and whether you’re losing money paying hidden investment fees. It’ll even tell you just how much more money your account could earn by the time you want to retire.

After that, if you sign up, it’s just $10 per month to have Blooom monitor and maximize your 401(k). Bonus: Penny Hoarders get the first month free with the code PNNYHRD.

Think of Blooom like a mechanic constantly fine-tuning your car’s engine so it gives you the best possible performance and gas mileage. Except it’s your 401(k) — and your future.

A Real Adult With Real Adult Finances

Yeah, that’s you — the real adult.

And whether your plans involve grad school, a life of travel and adventure, or getting a jumpstart on your career goals, you’ll need to keep a close eye on your finances to ensure they’re going to get you where you want to go.

In the meantime, though, feel free to pop a few bottles to celebrate the last birthday people will actually get excited about.  

Grace Schweizer is a junior writer at The Penny Hoarder.

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