Money Talks, Sometimes Even Screams
There used to be a TikTok sound floating around where it said something along the lines of…
“I now have access to adult money which means I can buy it whatever I want…which means I end up buying shit like this.”
@ironsantuary
And there’s a lot of really cool posts; full blown 10,000 piece Lego sets, 3’x4′ portraits of their dog posed as Napoleon, or like the coolest home theatre you could imagine
Now this idea of adult money is very true to some extent and is one of the beauties of that first job’s paycheck. There’s a good chance you’ve never seen that much money pop into your checking account at one point, and it’s recurring.
But, and there’s a big but…
Importance of Financial Habits in Your 20s
With the increased income you aren’t used to experiencing, also comes drastically increased expenses you’re probably not used to either.
If you haven’t already, you’ll realize that nearly everything has some sort of price tag to it—I know, it sucks—so being intentional with your money habits is crucial.
With that being said, I have been able to develop some solid financial principles that work for me; things that are practical while still allowing you to live life to the fullest. This isn’t your grandpa’s “a penny saved is a penny earned” advice.
Here are the first five financial habits in your 20s you actually need—from somebody actively in their 20s.
1. Know Exactly What’s Coming In and What’s Going Out
This is the first step if you want to be intentional with your finances.
More specifically you need to break down how much net pay per check comes in (that’s after employer taxes, social security, health insurance, etc.) and how much you are ACTUALLY spending, both on essentials and non-essentials.
Let’s break some of these items down a little further.
Net Pay
If you haven’t noticed already, the amount you get paid is NOT the amount you receive. If you have a job making $50,000 per year, for example, you might think, well $50,000 divided by 12 would be $4,166.67 per month and I get 2 paychecks per month so that means I should get $2,088.33 per paycheck, simple! Right…
You are correct that you’ll start off with the $2,088.33, but then comes federal taxes withheld, state and/or local taxes withheld, FICA taxes (which include social security and medicare), health insurance (if enrolled), 401k distributions (if enrolled), other pre-tax deductions.
All of sudden, that $2,088.33 paycheck might dwindle down to around $1,400-$1,500 depending on those other potential deductions/distributions. This will be the amount that is deposited into your bank account when that pay cycle comes to a close. And this is the number that actually matters for your real life.
A couple of things to mention.
- This example is assuming a bimonthly pay schedule, where two paychecks are given per month, usually on the 1st and the 14th or the 15th and last day of the month. Other popular pay schedules are biweekly (paychecks paid every 2 weeks), weekly (pretty self-explanatory), or less frequently with monthly or quarterly (might be seen with some sales type jobs). It’s important to know how your pay schedule is structured.
- While net pay is what you’ll be left with to pay for real-life expenses, the gross pay (amount before deductions) is still important to know. Gross pay is looked at when applying for financing (if you purchase a car or house), and also with applying for apartments (a complex might require the monthly rent is covered at least 3x by your monthly gross income).
- Mistakes do occur on paychecks so if something feels off or you’re not quite understanding an amount deducted from your paycheck, it’s never a bad idea to ask whoever is administering the payments. Often times, this is handled by HR or the finance department.
Essential Spending
Essential spending includes your must pay expenses, either financed purchases at threat of default if payments are not made, or expenses that are necessary each month in order to survive.
Here is a basic list of what these types of expenses might look like:
- Rent/mortgage payments
- Utilities
- Auto payments and maintenance (as my sister may attest to, make sure you at least get your oil change as prescribed)
- Gas
- Insurance (health insurance outside of your employer, car insurance, home insurance, renters insurance, etc.)
- Phone and service (does not mean you need the latest iPhone with unlimited 7g service)
- Groceries
- Medications
- Debt repayment (including student loans)
- Family care (if applicable, child care, school fees, or child support)
I might be missing some, but outside of these things, you really don’t need. Everything else is just fluff. Good fluff, perhaps, but fluff nonetheless.
Nonessential Spending
Alright, here is all the fun stuff. The accoutrements of life if you will. Entertainment, experiences, life enhancers—here’s a list:
- Dining out and takeout
- Concerts or sporting events
- Subscription services
- Gym memberships
- Travel
- Shopping (extra clothes, home decor, electronics, etc.)
- Gifts and charity
- Alcohol and other recreational substances
If you are realizing you are in a tight financial crunch, or total dollars in and becoming marginally greater than total dollars out (or even less than), then these are the things you will attack first.
Actually Tracking Income and Expenses
The simplest way to track is using some sort of Excel or Google Sheets spreadsheet. It really doesn’t have to be too complicated—column header for date, item name, amount, and ideally category. See example below:
Any amount that is in parentheses is an expense and will be treated as a negative number. Any amount that’s not in parentheses is income and will be treated as a positive number.
This is as basic as it gets but you can use that and go from there. I like to breakout categories into more specific things such as groceries, restaurants, entertainment, clothing, auto expenses, etc.
| Item Detail | Date | Amount | Category |
| Rent | 12/1 | ($1,600) | Essential |
| Internet | 12/2 | ($40) | Essential |
| Utilities | 12/4 | ($100) | Essential |
| Dinner w/ Friends | 12/5 | ($40) | Non-essential |
| Groceries | 12/7 | ($120) | Essential |
| Concert Ticket | 12/11 | ($100) | Non-essential |
| Net Paycheck | 12/15 | $1,800 | Income |
And then you can just total up the amounts at the end of the month and see where you are. It may be scary to find out (believe me), but seeing where you are actually spending your money gets you on the path of knowing where you can reduce in spending and what is more important to spend on in your life. Seeing it laid out like this makes patterns obvious very quickly.
Just tracking alone will put you ahead of 90% of young adults and also make you start to think twice about where your money is actually going. Try it out.
2. Focus on Building a Buffer First—Not Generational Wealth
I learned first hand this year that unaccounted for expenses pop up, and you need to be able to have some sort of cushion to cover these things.
Just in 2025, I had to replace my tires after running over a pothole—$600 right there. I also had to spend multiple visits with a doctor going over some ankle issues I have—over $500 in out-of-pocket costs, even with insurance.
The lesson here is that these aren’t expenses that are recurring so they’re easy to not concern yourself with. And if you’re not thinking about them, you might think your income/spending is all in check. However, it showed me the importance of setting up savings, cutting back on pointless expenses when I can, and being smarter with my money.
Since you’re tracking every dollar in and every dollar out, you want to focus on widening the gap between the money you make and the money you spend.
You’ve probably heard about building up an emergency fund (3-6 months of regular monthly expenses), but this starts with just trying to increase your monthly income margins. It’s one baby step at a time, and it should be your priority before investing, adding on non-essential purchases, and any lifestyle creep.
Mentioning lifestyle creep, you need to be cautious of increasing your spending directly with increased income. If you get a pay raise at work, the first thought shouldn’t be I make more money now, I can spend more money. You should treat this as an opportunity to increase that monthly income margin, so you can build up that buffer fund sooner.
Once you have enough to survive now, you can start to put some money into stocks, additional retirement accounts, etc.
3. Reframe Your Spending to Align With What You Value
I learned this point directly from observing my father’s actions. A notorious non-spender and Frugal McDougal, I’d come home from school with my dad had buying a brand new television, or piece of furniture, or a new piano, or car. I would often think, for someone who is so concerned about saving $5 at the department store, he sure has no problem with spending money.
And then it made so much sense. If you are so intentional and tight with the purchases that don’t really matter or bring a whole lot of value with your life, then over time you will have the money to buy stuff you really does matter and does bring immense value.
Sometimes you don’t even need to fully cut something out of your life completely but rather just make the smart replacement.
If you are tracking your expenses and see you buy a coffee everyday, you’ll notice a) enjoying a nice cup of coffee is obviously important to you, but also b) buying coffee everyday adds up. Let’s just say you spend $5 on a coffee 5 days a week. That’s $100 a month.
I recently bought a Nespresso machine (which I cannot recommend enough, here’s the exact one I got). But for about $120 I have a machine at home I love and use. And then individual pods bought at Costco come out to about $1.20 per cup of coffee.
Here’s the cost comparison breakdown. That barista-made-coffee at $5 per cup, 5 days a week, runs you at least $1,000 per year, and that’s being conservative (exact calculation would yield $1,300). In contrast, the coffee machine I bought with pods comes out to $432 per year, at the same 5 cups of coffee per week.
What can you do with that extra $868 per year?
I personally like to spend my money on travel, concerts, and experiences with friends/family. I know that certain lifestyle changes allow me to be a little less carefree when it comes to spending money on things that I know I really want to spend money on.
4. Be Realistic With YOUR Situation and Learn to Say ‘No’
As I mentioned above, I know I like to spend money on traveling, concerts, and experiences. However, this does not mean I go book pit tickets for the next Sabrina Carpenter show (Lord knows I would). I just know this is nowhere near realistic with my current income and essential spending I have. Even the $300 nosebleeds seats are not realistic for my situation.
Now that may be an extreme example, but even getting caught in the trap of having friends that go out to dinner 3-4 times per week can derail your personal financial track. Or feeling the need to buy the latest iPhone to keep up. Or wanting to totally pimp out your first apartment. Or trying to plan elaborate travel experiences when you simply don’t have the time or funds.
Social Media Pressure and Outside Influence
I get it. If you scroll Instagram, everybody seems like they’re living the high life. Even the “average” person has a sick job, doing cool things, with the bestest of friends. We all want that and that lifestyle requires money, most of the time—a lot of money.
In a world of crypto millionaires and affiliate marketing gurus, it’s easy to get caught up in the weeds of where you stand and what “normal” life should look like.
Here’s what you have to come to terms with: everybody has different situations (financial or otherwise) and whether your situation falls above or below average, you have to recognize where you actually stand and try to detach the emotions involved.
As corny as it sounds, the grass always does appear greener on the other side. The young adults who appear to have everything together might be more secure financially, but they also probably have other problems you wouldn’t want to trade for. Maybe the high paying job they have brings them absolutely no fulfillment or direction. Maybe they have family issues that are deep rooted. Whatever it is, you have your life and situations to deal with and put first.
Saying ‘No’ is an Important Skill
If you know what you can and cannot spend, you have to try to stick to that. As hard as it may be, you need to be able to hold your ground and say ‘no’ to spending additional money.
Not to say you shouldn’t ever say ‘yes’ and please do budget in dinners/events with friends because I believe they are very beneficial to your wellbeing. But know where your personal line is. Again, this will be different for different people.
And if you start to feel like the friend that can never join in plans, don’t just say “I can’t see my friends because I don’t have any money”. Instead, be the one to initiate more budget-friendly hang outs. A hike, a walk, drinks at your apartment rather than buying them at the bar. A quick Google search for your city can show a bunch of free events that are taking place.
And if nobody wants to do anything that’s low cost, you might need to consider making some new friends. With my friends, I know we can just hang around and do nothing aside from enjoy each other’s company. If you need some guidance on making friends after college, check out this other blog post.
Remember, community doesn’t have to be expensive to be meaningful.
5. You Got Enough to Worry About; Automate That Bitch
Crude title aside, this is one of the most important habits on this list.
The best way I have been able to practice regular savings and good financial principles is by automating whatever processes I can so I don’t even have to think about doing it. Most employers allow you to direct specific amounts of your paycheck to different bank accounts, so take advantage of this.
How I Set Things Up
There are probably better/more efficient ways to do have these systems in place, but here’s what works for me. These are just tools I personally use—not financial advice.
- Main Checking Account – I have my main account where all of my credit cards are paid from along with student loan payments and rent/utilities. Majority of my paycheck goes into this account (the other amounts are discussed below). I like to keep a couple of months expenses in this account just to cover any one-time expenses pop up and need to cover the payment with a credit card. I then supplement these kinds of costs with my funds from my savings account. I use Chase bank due to its ease of use with their credit cards. If you use this link, you can receive up to $300 in a sign-up bonus.
- Second Checking Account – I pretty much opened up this account because a local bank was offering a decent sign-up bonus, but now I use it as a middle-man for payments to my Roth IRA. A couple hundred bucks automatically come out of my paycheck and then they are deposited into the IRA account. I keep enough funds in this account to avoid any bank minimum requirements that would otherwise charge a monthly fee.
- High Yield Savings Account – This account is where my emergency fund started from and has since grown. Again, I have $100 of my paycheck automatically going into this account to keep the needle rising. If I have additional income that comes in, either from side work or any bonuses or my tax refund, I will direct that into this savings account. I use Marcus by Goldman Sachs due to its easy to use online system/app and competitive interest rates that are compounded monthly. If you use this link, you can receive a 0.25% bonus for 3 months, which certainly can add up.
- Investment Accounts – I have a couple different accounts including a Roth IRA with Fidelity, an Individual Brokerage account with Charles Schwab, and, easiest of all, Acorns. I mentioned my automatic payments into my Roth IRA, but Acorns is a really easy way to get started with putting small amounts of money into some investments. I started with putting $25 a week into this account during freshman year of college and then kinda forgot about it. It automatically invests the money for you and isn’t really a noticeable amount that’s leaving my account. If you use this link, you can get a $5 bonus and start investing the easiest way possible.
For me, setting up these types of automatic savings/investments allow me to focus on the income and spending portion, since I already know they are taking place in the background. There’s enough parts of life after college to worry about, so make it easier for yourself.
Conclusion: It’s Not About “Winning”, It’s About Not “Losing”
Adult money really is a thing. And yes, it can buy some damn cool stuff.
But if you’re not careful, it can also quietly disappear, stress you out, and leave you wondering how you make more money than ever while feeling more broke than before.
The habits in this post aren’t about turning you into a finance robot or making you feel bad for enjoying life. They’re about giving your money direction instead of letting it scream for attention every time it hits your checking account.
If you know what’s coming in and going out, build a buffer before chasing wealth, spend in ways that actually matter to you, stay honest about your situation, and automate progress wherever you can, you’re going to be in a good spot.
I feel like your 20s aren’t the decade to “win” with money or have all the answers, rather they’re the decade to stop losing to it.
Money should support the life you’re building—not run it. And when you start treating it that way, everything else gets a little easier to manage.
Money, money, money. All part of your story. So with that, keep writing your story.
—Will
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