Adulting 101: 5 tips for surviving adulthood

I have two teenagers. They don't listen to me. Maybe it's because I'm always trying to steal their food or tell a cringeworthy dad joke, but they don't have any desire or willingness to listen to Dad's advice when it comes to money topics. So maybe you'll find this guide helpful.

What is adulting?

Whether you're prepared for it or going through a quick crash course in being independent from your parents, adulting basically comes down to being responsible for yourself and your finances. It also means that you'll always be charged as an adult if you slip up with the law. Remember, I tell bad dad jokes.

When I was the young age of 18, a new adult to the world, these are the things I wish I knew:

1. Have a regular source of income.

"Get a job." Yes, I just aged myself by more than a few years. If you don't have one already, you need one. If you have bills to pay and a life to live, you need a source of money. One of the great collectives of philosophers once said, "Cash rules everything around me. C.R.E.A.M. Get the money. Dolla dolla bills y'all." Wu Tang's acronym for financial motivation should ring true for you, at least in the simplest of forms – you need money to do stuff.

2. Budgeting.

Spreadsheets, calculators and financial apps, oh my. No matter how you decide to do it, track your income and your expenses. The money you have coming in versus the money you have going out will determine what kind of savings and spending goals you can afford. If you see rent, car costs and food eating up most of your income, you may find it tough to save for bigger picture goals. You may also find it challenging to pay off things like credit cards or loans that you may have.

Many people find it helpful to categorize their expenses into two main types: fixed and discretionary. Fixed expenses are typically recurring and need to be paid for. For example, your rent, utilities, car payment and insurance expenses are fixed costs. Discretionary expenses are things like entertainment, travel and dining out. It's easier to cut from discretionary costs.

I am greatly oversimplifying things here, but when you're fighting through a tough budget, trying to make the numbers work in your favor, it really comes down to two actions you can take: earn more money or spend less of it.

Can you find less expensive housing or get a roommate to share some of the costs? Can you use public transportation and forego having a car? Can you find additional work or possibly hunt for a better paying job? These are some of the tough questions you'll have to ask, but if you can build the habit of being critical and honest with your finances now, your future financial decisions will be better for it.

For more budgeting tips and help creating your own budget, use USAA's budget guide.

3. Make managing your money easy.

Back in my day, we had these things called bank statements, paychecks and checkbooks. Yes, they still exist and are still helpful, but almost everything is done electronically today. Make your banking as easy as possible and set up reminders, so you can easily track your account balances. Use your mobile device and banking app to make your life easier. Here's a breakdown of basic banking accounts and tips to take:

Bank accounts.

For your everyday money-in and money-out transactions, you'll need a checking account. Checking accounts typically offer a debit card, online access and can be opened with a minimal amount. These accounts are meant for ongoing transactions and won't typically pay you much interest.

As you build up money and save, you'll want to open a savings account. Savings accounts will typically pay you more interest on the money you have deposited. But they typically don't have the same features as checking accounts, such as debit cards. Some savings accounts may have limited withdrawals that you can make without either seeing a fee or a reduction in the interest rate you earn.

Check out more info on the differences between checking and savings accounts.

Direct-deposits.

Save yourself a trip to the bank and have your paycheck directly deposited to your checking account. Direct deposit is typically preferred by employers now, and it can be helpful for you as you can customize how your deposits are made. Your deposit will be the remaining amount of your pay after things like taxes, health care costs or savings allocations have been taken out.

Automatic savings.

With your direct deposit you can typical elect for a portion of your paycheck to go into your savings account. This can be helpful to force yourself to save money. Typically, your bank will let you move money between your checking and savings accounts easily. You can set up automatic transfers from your checking to your savings account. Put your savings on auto-pilot or treat it as a bill that has to get paid every month.

Emergency funds.

Stuff happens, and it can get expensive. To prevent you from becoming reliant on credit cards or borrowing from other people in an emergency, you should have an emergency fund. This is typically a savings account, and you should ideally have three to six months of your fixed monthly expenses saved in this account. Learn more about quick ways to jump start your emergency fund.

Online bill-pay.

It's important to pay your bills appropriately and on time. Missing a rent payment can lead to eviction, and missing a car payment can lead to a repossession. These types of errors have a real impact on your credit worthiness, which is your ability to borrow money at a favorable rate. Online banking and mobile apps should help you conveniently schedule payments or set up automatic drafts for recurring expenses. But make sure you know when money is leaving your accounts.

Mark out on a calendar the different times of the month that big bills are due. You may be able to contact service providers and lenders to change the payment dates on your bills. This can help you arrange your bills to your account balances, so you don't risk an overdraft or having insufficient funds when a bill hits.

Don't depend on debt.

Credit cards should be used appropriately and paid off regularly. While they can be convenient and may be helpful in an emergency, you are borrowing money when you pay for something on a credit card. When you carry a balance, you have debt, and debts can be difficult to overcome without a plan.

Some credit cards have great rewards or cash back as account features. But those great features could come at a high cost. Review the terms of any card that you're considering and understand how they work. For example, does your card have a low introductory rate that climbs after a certain time?

Learn more about the basics of credit cards and how they work.

4. Protecting yourself and your stuff.

You're out with some friends getting dinner, and when you get back to your place, you see the door flung open. Your TV, laptop and other valuables are missing. Replacing your stuff can be costly if you don't have the right insurance in place. Health insurance is a must if you get sick or hospitalized. And what about other things like life insurance?

Insurance helps to replace your stuff, offset big expenses and potentially life-changing events that occur. Having adequate insurance can help keep you on track financially and not having to press the respawn button when something goes wrong.

Renters insurance.

If you rent a home or an apartment, you should consider renters insurance. Some landlords may require you to carry renters insurance as part of your lease agreement. Renters insurance basically covers your personal belongings in the event of a covered loss like theft or fire. You would pay a deductible, like $250, towards replacing your property and your insurance company would pick up the rest in the event you had a covered loss or claim. If you're in the military, renters insurance can also help cover your equipment and uniforms, even if you're deployed.

Renters insurance typically provides personal liability coverage. This is insurance that would be used if you were found responsible for damage done to someone or something else. We live in a lawsuit-happy country, and liability insurance can help prevent your income from being garnished or your savings being depleted.

Car Insurance.

If you have a car, you're legally required to carry at least car liability insurance. To protect your car and your emergency cash, you should consider if you need full coverage.

Let's say you're driving and accidentally hit a deer. Your front end is damaged along with a broken windshield. You're at risk of having to pay to repair your car out of pocket unless you have comprehensive coverage.

And if you get into an accident that's your fault, the liability insurance portion of your policy covers the other person's car and injuries. But repairs to your car would be on your shoulders without collision coverage.

Health Insurance.

If you get sick or injured and need medical attention, health insurance should help you offset treatment costs. Health insurance is a foundational part of your overall financial plan, and you should not go without coverage.

Most Americans enroll for health insurance through their employer. But if you don't have a health plan available to you through your work, you may have options available through providers like USAA or the health insurance marketplace/exchange at healthcare.gov (Opens in New Window).^{See note1} Additionally, you can typically remain on your parents' health insurance plan until you turn 26.

Life Insurance.

If you have people that are financial dependent on you, you may need life insurance. Life insurance helps those that you care about by offsetting the financial blow that an unexpected death can deal. Life insurance tends to increase in costs as you get older and less healthy, so acquiring coverage when you're younger can help out your future budget as your life changes.

5. Planning for your future with healthy habits.

I was a mess at 18. Had too much fun my first year of college, lost some scholarship money and got introduced to my first adult job by that summer. I didn't think about my health, ate whatever I wanted and didn't even think about my mental wellbeing. Now, I'm not suggesting figuring out every aspect of your life right this second, but you should build healthy habits now that will reap rewards for your future self.

Self-care.

Your emotional, financial and physical wellbeing are all interconnected. If one of these are off, the others are at risk of ruin as well. If you find yourself struggling or identifying that you need support, get it. Talk with friends, family or professionals that can help you navigate the tough spots and build skills that can help keep you more resilient.

One of the most common sources of stress stems from financial troubles. Being hooked on a credit card or buried in debt can be a huge obstacle in your way. It can set you back years before you're able to build towards bigger goals like buying a home or saving for retirement.

Make goals.

Vision boards, journaling, Pinterest boards or my favorite, spreadsheets; whatever tools you use to make and track goals, use them. Maybe your goal is to travel to a dream location. Visualize it, detail the costs and map out your budget from now until you can press buy on the plane ticket. Use SMART goals – Specific, Measurable, Actionable, Realistic and Time-bound.

Career Planning.

I've told my kids to lean into their passions. I hope that they're lucky enough to be able to do what they love and provide financially secure lives for themselves. But careers don't need to be solved all at once. Be willing to constantly grow and learn. Many employers offer financial support to continue your education. Follow what you enjoy and are interested in and leverage any opportunity to learn or network.

Investing and planning for your future.

Save early and save often. The benefit of being young is that you have time in front of you. The more that you can do now, even if it's a small amount, will help set you up on the right path. If you have your emergency fund established and are working off a good budget, you may be ready to invest. Investments can win but they also can lose. Time should help you weather those ups and downs as you stay focused on your long-term goals. And like all things that are new to you, get help from a trusted professional when needed.

TL;DR

Hopefully you're still with me. If you're like my kids, I got tuned out a while ago. And that's OK, because being an adult is something you grow into overtime. Yup, another bad dad joke. You don't have to do this stuff alone or without help. This whole internet thing is pretty cool, and USAA has additional tools and resources to help make your new adventure easier.