Navigating personal finance can be tough for young adults, especially with limited education on the topic in school. Sound financial advice is crucial for making smart decisions about budgeting, credit, and investments. Learning these skills early helps avoid debt, poor money management, and financial mistakes. Here are the top 10 best financial advice tips for young adults to set you on the right path.
1. Create a Budget
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Creating a budget is key for managing your money. It helps you track your spending and ensure you’re not living beyond your means. A simple step to managing your money properly.
To learn more: How to Budget Money
2. Manage Your Debt
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Managing debt is crucial. Keeping debt low and paying it off quickly helps maintain a healthy credit score and financial stability. As a young adult, it best to stay away from the temptation to spend on credit.
To learn more: How to Get Out of Debt in 5 Easy Steps
3. Invest Your Money
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Investing is vital for a secure future. Start early and let your money grow over time. It’s all about patience and consistency. Start by investing a minimum of 10% of each paycheck.
To learn more: The Simplicity of Investing
4. Start Saving Now
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Start saving early. Even small amounts can grow over time. An emergency fund can provide a safety net for unexpected expenses. Use a money saving challenge to make saving more fun!
To learn more: Top 20 Epic Money Saving Challenges Unveiled to Save Money
5. Limit Your Expenses
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Limiting expenses helps save more money. Track all your spending, even small purchases, to understand where your money goes. This will help you to invest the rest!
To learn more: How to Budget Money on Low Income: 20+ Tips to Cut Spending
6. Build Passive Income Streams
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Building passive income streams can boost your financial stability. Find ways to earn extra money through hobbies or skills.
To learn more: Find a Side Hustle that Works for You
7. Create a Cash Reserve
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Having a cash reserve prepares you for unexpected expenses. Save three to six months’ worth of income for emergencies.
To learn more: Breaking Down the Purpose of a Rainy Day Fund
8. Learn About Taxes
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Understanding taxes is important. Know the difference between your gross and net pay to manage your finances better.
Learn More: Difference Between Earned Income, Passive Income and Investment Income
9. Consider a Term Life Insurance Policy
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A term life insurance policy is affordable for young adults and provides financial protection for your future family.
10. Take Action
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Taking action is essential. Set clear financial goals, break them into steps, and stay persistent to manage your finances effectively. Don’t delay starting your financial stability!
Learn More: 10 Smart Financial Goals That You Need
Find More Ideas for Young Adults
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These tips for young adults will help you manage money well and not make the mistakes many others were guilty of. You can build a strong foundation with money. Make your finances a priority and you can quickly reach financial independence.
To learn more: Financial Advice for Young Adults: 10 Easy to Follow Money Management Tips
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Have you ever thought about life lessons about money?
Honestly, most of us haven’t because we go through our day-to-day lives without taking the time to reflect or even journal about our experiences.
This past week, I had the chance to visit my kid’s elementary school during lunchtime. It has been a LONG time since I have stuck foot in a lunchroom. Wow – that room is loud! Really quickly I realized some lunchtime lessons we tend to forget in life.
These are the best money lessons you need to know.
The teachers were present to keep the lunchroom in order. My hats are off to them! They are amazing ladies with gifted talent (and personally, I am thankful for each of them). They kept control of the chaos to make sure the students did what they needed to do – eat lunch while still enjoying their friends.
After observing the students and the teachers, I realized habits start at a young age. If those habits, don’t change. Then, the cycle repeats. As kids, we learn behaviors whether good or bad (and most of them stick with you through your adult life).
It is a matter of choosing which path we want to live.
So, you are probably wondering what does an elementary lunchroom and money have in common??? I’m going to unpack four lessons learned in grade school that people struggle with in their money life.
These are the financial lessons you must embrace to enjoy a life of financial independence.
How Can I Learn About Money?
Just like reading, writing, and arithmetic, financial literacy is important. It is a building block to becoming financially secure. More specifically, being smart with money opens up doors of opportunities.
You are in the exact place you can learn about money.
Here at Money Bliss, we believe people want to learn to alter money management, so they can enjoy life and money.
Unfortunately, financial lessons are not taught in school or at the home.
So, that means as a college student or young adult, you must become self-taught. There are lots of various opinions and advice that you can get. Some of the best money books are highly rated because they have solid money management tips that are life-changing.
Stick around our Money Bliss tribe! I guarantee you will find insightful tips as many others have that will change your personal finances.
Money Lessons You Need in Life
The important lessons in life are simple.
They are basic practices in life. These are not specific tactics to help you get out of debt, budget better, or save more money.
Your mindset will determine success or failure – just by how you are thinking.
Research has proven that your mindset will determine your outcome.
These are the daily money lessons you need to remember that will help you reach financial freedom.
These life lessons about money are you already know, but you may need to practice them more often.
1. Stay Disciplined
The first lesson is about discipline. Going back to the lunchroom, the kids know the expected behavior. It takes discipline to sit down and actually eat lunch vs. throwing food and chatting with friends then no food is eaten. As adults, we know how much income we make and how much we can spend. With money, it takes discipline to stay within a budget or as I prefer to call it – Cents Plan.
In today’s society, there are many ways to fast cash whether by using credit cards, payday loans, or even a home equity loan. It is super easy to rack up thousands and thousands of dollars in debt in a short amount of time. While it may be fun spending all of that fast cash, it comes at a steep price called interest.
Discipline is living within your means.
It takes discipline to say, “No, you can’t afford this.”
Even better is learning how to live below your means and save more money each month.
2. Avoid Pushing the Boundaries
Oh, children are the best at the second lesson! How far can I push the boundary? At what point, do I actually cross the line? During my time in the lunchroom, I observed students after students trying to push the boundaries. Remember, they have wonderful teachers who have taught them the expected behavior.
However, it is natural behavior as humans to test the boundaries.
With money, pushing the boundaries typically starts out small. $20 over on groceries this month. $100 on eating out because we had to celebrate a birthday. Picking up that one item just because it is on sale even when there isn’t enough money to cover the basic expenses. Then, after time, it starts a snowball effect.
It just keeps rolling and rolling, getting bigger and bigger until overspending is out of control and the person is now smothered in debt.
With money, is pushing the boundaries truly worth it? Why should you test your own boundaries when money is at stake? The answer is no. Stop pushing the boundaries.
In the end, you are only hurting yourself financially by testing the limits and causing undue stress.
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3. Keep the Focus
Um, hello? Are you listening? Still, reading? Good! Yes, focus is the third lesson.
The lunchroom serves one primary purpose – fill up the belly with food before the next class comes in. However, my observations proved that was the last priority on any of those kids’ agendas. Thankfully, the wonderful teachers were present to provide guidance and focus them back on the task on hand. Did it take one reminder? Um, no. Many reminders to stay focused on their primary purpose.
In our society, there are MORE distractions than ever before. Plus the distractions will keep growing exponentially as technology advances and history has proven. So, what does that mean for you and your money?
Develop a plan and stay focused. Don’t stray. Don’t let others change your plan. Focus.
When we paid off our student loans, we were focused on ONE thing. Pay off our loans as soon as possible. Thus, freeing up cash flow in our Cents Plan. We didn’t stray. No changing our minds when things got tough. We stay focused on our vision – PAY OFF OUR STUDENT LOANS.
Staying focused means creating an overall money vision and making money goals.
Every single day, you are focused on making decisions that will make sure reaching your money goals is attainable.
4. Accountability
Teachers through school help keep kids accountable. They were present in the lunchroom making sure chaos didn’t break out. These teachers provide a firm guiding hand with a huge dose of caring love.
Wouldn’t it be great to have an accountability standard for money? Unfortunately, we don’t have many great examples around us. The U.S. Government is trillions of dollars in debt. Most Americans carry debt on their shoulders while living paycheck to paycheck.
We have never been taught to be accountable with money.
The first step to being accountable with money is an accountability partner – either your spouse, friend, or coach. Someone who will keep your best interests in mind.
The second step is to have benchmarks to hold yourself accountable to. Understand how our tagline “Where Cents Parallel Vision” means to you and how to apply it to your life. Make sure to set long-term visions with attainable short-term financial goals. Also, journaling your journey is a great way to stay focused and track progress!
If you are struggling to find accountability, make sure to join the Money Bliss Tribe!
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What’s the best lesson you’ve learned about money?
Personally, for me, it is living with millionaire habits and possessing their mindset. This all happened well before becoming a millionaire and deeply in debt.
It started by believing that I could be successful with money.
These powerful money lessons helped shaped my perspective, and ultimately, the desire to change money statistics with this blog and online business.
If you are stick in the negative mindset of always being poor or broke, that is where you will stay (unless you decide to take control of your mind). Living paycheck to paycheck is an unfortunate place to be.
If you believe that you can become a millionaire, then that is the best lesson you will learn about money, too.
Every money decision is a building block towards financial freedom. There isn’t one thing that will take you from negative net worth to over $1,000,000.
It is a cumulative effort of many daily resolutions that will change your personal finances.
You Need these Important Lessons about money
All of these money lessons we learned early in life, but still need reminders on a constant basis.
In all honesty, they will help every facet of your life. Build the life of your dreams and find money success.
Don’t forget these personal finance lessons:
Stay disciplined
Stop pushing the boundaries
Focus on money goals
Keep accountable
Think like a millionaire
In order to succeed with money and become financially free is to put into practice the lessons taught in school. We don’t have teachers watching over our every move to guide us.
We need to remember why it is so important to stay disciplined, stop pushing the boundaries, stay focused on our plan, and find accountability.
One of the benefits of the Money Bliss Steps to Financial Freedom is it provides a guide with all of these money lessons on how to succeed the fastest.
The steps are to be done in order, therefore, stay focused on the current step and not be distracted. Ten steps to walk through your life’s journey. They won’t happen overnight.
Just like in school… you took one grade at a time, learn what in needed to advance to the next grade.
Take these important lessons about money and willingly use them in every aspect of your life. You will be overcome with how much you are capable of accomplishing!
The Money Bliss Steps are developed to build upon one another and lay the foundation for financial freedom.
Learn how to manage your money, your way. Not have your money manage you.
Side note on teachers and mentors… I am thankful to all of the teachers who dedicate their lives to enriching students’ lives. Each and every one of you makes this world a better place! Thank you.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Americans with a financial advisor expect to retire two years earlier according to Northwestern Mutual’s Planning & Progress Study Ready to Retire: 75% of those who work with an advisor say they will be financially prepared for retirement versus 45% of people without an advisor Free from Anxiety: 64% of Americans with an advisor say … [Read more…]
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Many people experience regret when they receive gifts they don’t like.
It is important to avoid this by giving and receiving the right type of gift for someone. Some items that make for great gifts are subscriptions to magazines, concert or theater tickets, video games, movies, and books.
Other ideas include checking off bucket list adventures!
Experience gifts are the best gifts.
Many times after gifts are opened, you might be feeling a little disappointed in what you bought for others. You spent time and money, but now they are just left with a mountain of gifts that won’t be put to use. Don’t worry—we’ve got your back and plenty of ideas!
How can you avoid gift regret? Well, there are many different options to explore to find the perfect present.
In this post, we will cover unique experience gift ideas for her, families, kids, and everyone in between.
What are Experience Gift Ideas?
Experience gifts are a type of gift that gives the recipient an experience as opposed to tangible goods.
For example, you could buy someone tickets for their favorite band or sports team and they will get to go to an event and have a great time.
This type of gift will not expire, so if the person does not want it or use it right away they can still enjoy it later on!
Honestly, these are gift ideas that would love to do yourself!
Give the gift of experience by giving a membership to an activity, a day pass for activities like yoga or rock climbing. You can also give someone a voucher to take a class like cooking or painting.
There are so many options! We will go further in detail below.
Why Buying Experiences is Better than Physical Gifts?
If you still have gift cards on the table, it might be time to think about what your loved one really wants. “What is important for people are experiences that create memories,” says Harvard business professor Michael Norton.
A study by the Journal of Consumer Research found that for experiences, people felt more satisfied and happy with what they had received than material gifts like clothes or jewelry.
One way to make a gift even more special is to take the recipient with you when you go shopping.
Some people might feel bad when they get a gift they don’t like, but it is ok. For your next gift to someone you love, try getting them something different – like an experience gift!
Many people looking for a no gift Christmas look for experiences instead.
Ultimate List of Life Experience Gift Ideas
A lot of people experience gift regret when they receive a gift that is not their style or something that has no use. This can be frustrating because the person who gave you the present did their best to find what they thought you would enjoy.
That is why we have the best experience gift ideas all in one place!
There are many experience gift ideas on this list of the best experience gift ideas.
-A trip to your favorite theme park.
-An evening of bowling and dinner with friends.
-A night at a sleepover party for girls only.
– The list goes on and on with so many fabulous ideas!
Many of these on the list are outdoor experience gift ideas!
The best gift ideas are the ones that they will love and cherish for years. With these many great experience gift ideas, you will be sure to find the perfect gift for any occasion.
Who says a birthday is just another day? It’s a special time, and it deserves something extra-special as a present.
These types of gifts are perfect for the frugal green person who cares about saving money and being eco-friendly.
Experience Gifts for Everyone
If you are looking for a gift that will be remembered, look no further.
We have rounded up the best gifts to give someone who is hard to buy for or just wants something different than a gift card.
This may seem like it’s too good of a present, but if you know the person well, it’s a gift that will not go to waste.
Weekend Getaway: If you are looking to gift someone with a gift that is guaranteed to not go unused, give them an unforgettable experience. Find the perfect hotel today.
Language Courses: Learning a new language is always a great idea! This is something that can be done in your own time and space. Start your journey to bi-lingual.
Bowling: Has it been a while since you went bowling? Time to lace up those bowling shoes for a night out at the lanes. Can you roll a strike?
Dinner Out (or Dinner In): Everyone loves a break from cooking. Find the local trendy restaurant or pick of their favorites. Either or, it is the company that makes the difference!
Night Out with Friends: This is always a great gift idea! There are so many different things you can do for a night out.
Monthly Subscriptions: Monthly subscriptions are a fun gift that can either be an ongoing thing like Netflix or HBO, or something for the month that includes their hobbies.
Fitness Classes: At home or on the go! There are plenty of options for a healthier lifestyle. You can find new, exciting fitness workouts anywhere!
Groupon Deal of the Day: Let the popular app find all of the ideas that are hot in their area. Plus save a buck or two for the saver in you! Find Groupon Deals.
White Water Rafting Expedition: If you are looking for an adventure, white water rafting is the perfect gift. With the best company and scenery, it will be a day that they’ll never forget!
Ziplining Tour: SOme of my best memories are from a ziplining tour. Make sure to zipline in a breath-taking place to soak in the scenery around you. For a bigger adrenaline rush, zipline through a cliff.
Hotel Gift Card: Don’t have the perfect gift idea? Give them a night out on you! Buy them a hotel gift card to spend when they are ready.
Book Club: Books make great gifts because there’s never anything like it in someone else’s collection, and you can find one that’s appropriate for their reading level. Double bonus: when you meet for drinks to re-hash the books.
Baked Goods: Give a friend or family member something to bake, like cookies or bread. It’ll make them feel happy and proud of themselves, and you’ll get to enjoy the results. Even better… pass along the recipe and ingredients for them to recreate themselves.
Gift Cards: For the person who has everything, give them an experience they can buy with their gift card. Give someone $30 to spend at a local art store and they’ll be grateful for the experience.
Cash: Cash is king. Let the people who love buy their own presents. This is especially a great gift for a frugal person.
A Donation: Don’t want to spend any money? Consider donating in someone’s name; they’ll appreciate it more than anything else.
It’s the time of year to celebrate with family, friends, and loved ones.
Hopefully one of these life experience gift ideas is appealing to yoU!
Experience Gift Ideas for Kids
Kids and families will appreciate a wide array of gifts!
It is hard to shop for gifts for kids who have everything, so hopefully, this list gave you some ideas.
This gift list includes out-of-the-box ideas to help minimize the clutter most families deal with as well as much-loved gifts.
Art Class: Art supplies and a session with an instructor, designed to create your own masterpieces. Plus the best part is you do not have to clean up the mess!
Archery: This sport is always on the list of “coolest things to do.” Learn archery, improve your technique and have a chance to participate in competitions.
Sports Lessons: Get some new skills and have a ton of fun while improving their athletic ability.
Backpacks & Sports Bags: Kids need to keep their stuff organized! This could be a camelpak for their next hike or just a travel bag for their next trip. Find ideas!
Subscription Boxes: Looking for something to come in the mail? Get a monthly box of goodies that you will be excited to open. Find the perfect subscription box.
Music Lessons: Become the next pop star with lessons in piano, guitar, or violin.
Tool Kit: This includes everything you need to fix things around your house and will teach skills that last a lifetime. This is great for the teenager or young adult.
Sleepover Party – Time for giggles and fun! Find sleepover party supplies here!
Art Supplies: Every craft station needs to be refilled for hours more of fun!
Ice Cream: You scream, we scream, we all scream for ice cream! Always a sweet treat and there are so many places that make your experience a delicious time!
Any of these kids experience gift ideas are winners for them! Check out this post for the best kids gifts under $10. Made by kids for kids.
Experience Gift Ideas for Family
A family’s experience with a gift is more important than the amount of money spent on it. If you’re looking for some new ideas, try any of these ideas.
Plus you buy one gift for the whole family!
Try any of these experience gift ideas for families!
Family Dinner Night Out: For many families, it is too costly to take the whole family out to dinner. Find a restaurant that is known for creating an experience the family will never forget.
Family Game Night: Stock the game closet! These are great gifts when the kids grow up because their interest changes and ability level improves. Drop ship a gift basket for family game night.
Family Green Space Improvement Projects: Such as a backyard garden or a small vegetable plot or even flower pots. Provide the seed money and let the family flourish together.
Paintball Package: For those who love to participate in outdoor activities, a paintball package is a lot of fun and a big adrenaline rush.
Helicopter Tour: This is a great gift for kids who love to learn about the world! This is an experience they will never forget.
Trip to Local Theme Park: What better way to have fun than to visit your favorite theme park with friends or family?
Family Movie Night: Purchase a gift subscription to the popular streaming services. Disney+ is perfect for kids. Put together a snack bucket with popcorn and everyone’s favorite beverages.
Sporting Event: Buy a t-shirt or jersey of their favorite team and surprise the little sports fan with an evening at the live game!
Camping Trip: Glamping is allowed, too! It is about disconnecting from the devices and having in-person interactions. Plus the wild will always surprise you!
Age Specific Weekend Getaway: When your child (or grandchild) is a certain age, take them on a trip. During this one-on-one time, you can have plenty of experiences and memories to share. Popular ages to do this would be nine years old, twelve years old, and fifteen years old.
Experience Gift Ideas for Couples
This section provides ideas for gifts that are best suited for couples.
Cooking Class: Couples who enjoy cooking together will enjoy a cooking class. Even if they need to learn to cook, this will be an extremely useful gift!
Online Course: Pick a topic; any topic! There are thousands of online classes to explore together to learn a new skill, find a new hobby, or enhance your skills. This is a course I did with my husband.
Adventure Ticket: Think like a tourist! This gift idea can be local to your area. What is the one thing this couple hasn’t experienced in their area?
Hot Air Ballooning: Don’t worry if you are afraid of heights, being in a hot air balloon is like floating across the water. It is a romantic and unforgettable experience to share.
Rent a Boat: Yeah, a boat. If you have the time and money to rent a boat for what will be an extended period of time, this is going to make one heck of a memorable gift.
Tickets to a Comedy Show: Laughing is the best medicine, and what better way to get a laugh than at a comedy show.
Adventure Ticket: Think like a kid- get them a ticket to go do something adventurous.
Couples Therapy: You could be treading a very fine line here. However, learning how to be a better spouse is always a great idea. Just make sure you have solid referrals.
Date Night: Who doesn’t enjoy a date night? Cover the cost of a babysitter and give them money for the restaurant.
A Day at the Movies and Lunch: Sounds picture-perfect, right?
Encourage their Passion: If you know what the couple’s passions are, give them money to go and pursue it. For example, if they’re musicians or artists then buy a guitar for them or a sketchbook.
Golf Lessons: These are an experienced-based gift that will allow them to enjoy a hobby together.
Music Lessons: Music is a universal love and they can learn how to play the guitar, harmonica or drums. Time spent together is harmony.
Plan for the future: Get them a certificate to receive daycare in case they need it at some point in their lives. Or get them a gift card from Costco to help with all the baby items they will need.
Experience Gift Ideas for Her:
Some experience-based gifts you can give a woman on her birthday or Christmas. Ladies love to be pampered (hint, hint)!
Spa Treatments: These include manicures, pedicures, and facials. They are a relatively inexpensive gift that she is sure to love!
Massages: A massage will make her feel like a new woman and she will love the way it feels.
A Day at the Spa: This is the most luxurious of them all. Instead of just one or two spa treatments. Add in foot soaks and of course, the more intense ones like a mud treatment or body wrap can really clean you up. The lady of your life gets pampered for a half-day or full day.
Time for Herself: Quiet zen time away from the needs in her life. This could be an hour of quiet or a full day.
Luxury Hotel Stay: Sometimes, you need a luxurious night of sleep without children waking you up.
Tickets to an Event: This could be for the theater, concert, or art grand opening. If you know your lady well, you will know what her passion is and can find the perfect ticket to match.
Night Out on the Town: This date includes dinner and a show.
Surprise Dinner from Her Favorite Restaurant: Sometimes, it is the little things in life that make the best gifts.
Yoga or Pilates Classes: Some people find that these classes relieve their stress. Plus improve your flexibility at the same time.
These are some of my favorite gift ideas.
Experience Gift Ideas for Him:
I think most guys prefer experiences over being lavished with gifts.
Also, let’s be honest… Men are 95% more likely to go out and buy exactly what they need and not wait for a holiday to come around.
Give him an experience day and he will be talking about it for years to come.
These are gift ideas for men who have everything!
Skydiving: Can you imagine? The adrenaline rush of jumping out of a plane and free-falling at 120 miles per hour. It’s an experience that he won’t soon forget.
Rock Climbing: He’ll get to experience the adrenaline rush of climbing up a cliff, navigating over obstacles, and getting to the top.
Horseback Riding: It’s not just for girls! Horseback riding is a great outdoor activity that he can do with his friends.
Throwing 1st Pitch at Baseball Game: It doesn’t matter their age. This is a dream for all ages!! The trickier part is how to make this experience gift idea happen.
Snowboarding: He’ll get to experience the adrenaline rush of snowboarding and enjoy learning a new skill set. Just hope he make it down the mountain in one piece.
A Day at the Spa: A man may not think this is a gift, but if he needs to be reminded of how good it feels to take care of himself then I say go for it.
Renting a Sports Car: This is a rite of passage for every man to drive a sports car.
Day at the Race Track: Specifically to be able to drive the cars; not just watch the professionals drive. Many of the race tracks offer amateurs a chance to feel the exhilaration of 100 mph.
Charter Fishing Trip: The best way to spend a weekend. Ask any guy and the story will be bigger than the fish they caught!
More than anything that is considered living on the edge is the perfect experience for him!
Best Experiences Gift Guide
This guide will help you come up with gift ideas for loved ones.
It won’t help with cleaning baseboards, but it will help you find gift ideas that they will appreciate. It is always good to say I appreciate you!
When it comes to buying a gift for someone who is a bit harder to buy for, consider giving them an experience that they would not otherwise be able to do.
Art & Entertainment-themed:
If you are looking for an experience gift, look no further than the arts.
Tickets to a Play: If you are looking to give a gift that will last for an extended period of time, consider gifting someone with the experience of attending one event at their favorite venue.
Tickets to a Concert: These will not go to waste and can be used anytime within their validity period. Time to jam away to the tunes.
Museum Membership: Consider gifting someone with a membership to an art gallery or museum. Also, many museums have reciprocal benefits and can be used in other cities when traveling.
Food & Drink Themed:
A great gift idea for any occasion is to give food or drinks. Whether it’s a holiday, birthday, anniversary, or just because you want to show someone how much they mean to you, food themed gifts are a great way to show you care.
Cooking Classes: This is a great idea for the foodie or non-foodie! Everything tastes better and is more fun when you do not have to clean up afterward.
Wine Tour: This gift is perfect for the wine enthusiast. Wine tasting, learning about viticulture, and enjoying tastings of different wines are all part of this gift.
Brewery/distillery tours: For the craft beer or liquor enthusiast, this is a great gift. Learn how different beers and liquors are made while enjoying tastings of them.
Culinary school: This is for the foodie and non-foodie alike. Whether you love to cook or never touch the stove, culinary school is a great gift for anyone who wants to learn more about their craft.
Things to Do Themed:
Experiences are perfect for friends and family. They make the recipient feel like they got to do something fun or interesting (even if it’s just sitting in a room with snacks).
It’s also a great way to make someone feel like they’re worth more than the value of whatever you spent on them.
Time to get moving with these things to do gift idea list!
Zoo Membership: A membership to your local zoo is a great way to enjoy (and learn about) the animals that live in our world.
Movie Tickets: Movie tickets are always a good idea, and it’s a great way to enjoy something together.
Pool Membership: Pool memberships are a great way to enjoy the summer. It’s also good for people who don’t like hot weather since they can cool off in the water.
Waterpark Passes: Water parks are a great way to have fun in the sun.
Membership at a Museum: Memberships to museums are an opportunity for people who love art, history, or science.
National Park Pass: Passes to national parks are a great way to enjoy nature.
Botanical Gardens: Botanical gardens are a great way to enjoy the beauty of nature indoors and outdoors.
Professional Photography Shoot: Professional photography shoots are a great way to have professional pictures. Get dressed up and smile!
Art Class: Art classes are a fun way to learn about art and express your creativity. Even better, when you do them as a group!
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Learn Something New Themed:
If you are looking for a gift idea that will not go to waste, consider learning something new.
There is an abundance of courses and workshops available in all sorts of subjects!
Find a new hobby or hone your skills.
Crafting Classes: Have you been to your local craft store? There are hundreds of types of crafts to choose from. Some ideas include: knitting, sewing, painting, beadwork, jewelry making, woodworking, etc. Find crafting ideas here.
Language Classes: It is best to learn a new language through immersion. But, the recipient may be hesitant and want to know a few words in the new language before setting out on that experience. Start your journey to bi-lingual.
Subscription Boxes: THere are hundreds of subscription box ideas. Just pick one to match their personality. Plus a new box comes on a recurring basis.
Tennis Lessons: This gift idea was well received in our house. We bought new tennis rackets and a backpack along with a package of lessons. Plus it is a lifelong skill to be able to play.
Photography Workshops: Happy; excited; nervous! Time to learn photography from a new lens. You will proud of your new skills.
Instrument Lessons: Time to get in tune with your inner self. Every had a dream to play a musical instrument? I have; it is the drums. What would your gift recipient want?
Horseback Riding: Buckle up and get ready to ride. This could be a one-time adventure or a package for riding lessons.
Dance Lessons: You will not regret it. Well, you might later. This is a must for any engaged couple. That couple’s dance is waiting for your dance skills!
Equipment Needed for Passions:
Regardless of your hobby or passion, it comes with some type of cost. It is difficult if you do not have the equipment needed to enjoy time doing something you enjoy.
This is one of the greatest gifts you can give!
The equipment will fund the experiences that this person craves to have. Or replace worn out items.
More than likely, you won’t know what exactly to get. So, ask for a wish list or their favorite place to buy equipment. Cash or gift cards are extremely beneficial.
Camping Gear: Once you own the equipment, this is a cheap activity to participate in. However, there are upfront costs of collecting all of the gear.
Sewing Machine: If you know someone who sews or is interested in sewing, this gift will go a long way. Sewing machines range from $200-500 and it’s usually worth the purchase if they enjoy sewing. My mother-in-law purchased mine!
Climbing Gear: If they are an avid climber, this is a great gift. Like camping gear, it has upfront costs of investing in the equipment to get started.
Photography Equipment: Photography equipment is expensive upfront, but it can be used for years to come. This is a great idea for someone who enjoys taking pictures.
Telescope: Telescopes are expensive, but it’s a lifetime investment. This is perfect for a starry-eye person who enjoys looking at the stars.
Fly Fishing Equipment: Fly fishing equipment is expensive but lasts a long time. This can be used by an avid fly fisher for years to come.
Road Cycling or Mountain Biking: Road cycling or Mountain biking equipment is expensive but lasts a lifetime. This can be used by avid cyclists for years to come.
Sports Gear: This could be for golf, tennis, soccer, or any sport! What is the equipment needed, so they can enjoy time playing.
Scuba / Snorkeling Gear: Scuba or snorkeling gear is expensive, but it’s worth the investment. This could be used by an avid scuba diver for years to come.
It can be hard to find a good gift for someone that has everything. When you find yourself in this position, there are many things to think about when purchasing a present. One thing you’ll want to do is consider the hobbies of the person you are buying for.
At Home or Virtual Experience Gift Ideas:
A virtual experience can be an eye-opening experience. It is like you are there, but not really there. Instead of going to a museum or getting info about whales from a book; you can get the same information from a virtual experience.
Online Cooking Classes: Cooking is a great way to get out of the kitchen. You can learn techniques or just try new recipes. Find classes today.
Online Wine Tasting: Yes, all of the wine is delivered to your door. Lead by a wine sommelier on the varieties and what to expect during each skip.
Workout Experiences: Start your fitness journey in the comfort of your own home. There are many options available for workouts that can be done from just about anywhere with the equipment you already have at home!
Airbnb Online Experiences: If you miss traveling, then you are able to travel to some of your favorite locations. While it may not be the same, you can start planning your trip for another time!
Online Classes: This is an idea for anyone who has a passion they want to explore. There are thousands of courses on almost any topic you can think of. With this, there is no need to go to school to find your passion, you can do it right from home.
Board Games: Brush off the games or pick out a new board game. No one will get tired of playing their favorite.
Themed Experiences: If you are looking for a unique experience for someone, then think about planning it around their favorite thing.
How do I Give an Experience as a Gift?
Gifting an experience is a great way to give someone an unforgettable gift.
With experiences, you can choose the location, the type of experience, and what your budget can afford.
You can also choose whether you want the experience to be for someone specific or publicly available. The fun part is you can get creative on how to wrap it like money gift ideas!
How to Wrap up the Experience as a Gift:
Buy something that represents part of the gift.
Create a gift certificate.
Handwrite a lovely letter explaining the gift experience.
Wrap up a huge box with a tiny note.
There are plenty of ways to wrap up a gift experience. Just follow your personality to choose the best way to gift wrap it!
Which Experience Gift Ideas Will You Use?
Many people who are not satisfied with their gifts during the holidays end up feeling regretful. This holiday season, there are plenty of options to choose from that will be used for years to come
The idea of giving someone a gift can be overwhelming.
We are bombarded with deals and deals, but in the end, it is just another thing that will eventually clutter up our homes.
There is a better way.
Gifts that encourage experiences over material things do not go to waste and can create memories for a lifetime. They also require less thought, which these days are a good thing.
You can find plenty of life gift experiences for:
Father’s Day
Mother’s Day
Mother-Daughter
Grandparents
Parents
Girlfriend / Boyfriend
Wedding
Husband / Wife
Birthday
Graduation
Christmas
It’s time to think outside the box and give someone an experience they won’t soon forget!
If I do buy something, I focus on purchasing consumable gifts that will be used up.
Seriously, think about what do I want for Christmas or any other occasion…
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
For college students, sending money to friends has never been easier thanks to peer-to-peer payment apps like Venmo, PayPal and Cash App. But that convenience poses risks, including vulnerability to errors, fraud and the tendency to overspend.
As a result, payment apps can contribute to financial stress at a time when young people are learning how to manage their finances on their own. “Peer-to-peer payment apps are cash on steroids because they’re a straw stuck into your bank account,” says Anne Lester, author of “Your Best Financial Life.”
Not only does that make spending easier and more “frictionless,” Lester explains, but it also means “if you trust the wrong person, then you’re in big trouble,” because it can be difficult or impossible to get the money back.
To keep young people safe while using payment apps, money experts suggest taking these extra steps to guard against scams and overspending.
Triple-check the recipient
One risk with peer-to-peer payment apps is sending the money to the wrong person by accident. “If you send money, make sure you are 100% certain you are sending it to the right person, because it’s very hard to get the money back,” says Nilton Porto, associate professor of consumer finance at the University of Rhode Island.
For college students living on tight budgets, Porto says, an incorrect payment could really impact their ability to pay for essentials like rent and food, even if they eventually get the funds returned.
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Protect against fraud
Porto suggests being wary of unexpected requests, even those purportedly from a roommate, that claim to be urgent. “We don’t need to send money to almost anybody right away,” he says, explaining that scam artists often use urgency as a way to trick people into sending cash to them. Similarly, disregard any requests received through one of the apps containing a link that requests personal information, as it could also be a scam.
Erin Lowry, author of the “Broke Millennial Workbook,” warns against downloading any unfamiliar payment apps. “I would not be an early adopter to a payment app,” she cautions, given that it has access to your bank account.
As an additional precaution, Lowry suggests connecting payment apps to a bank account that you don’t keep the bulk of your money in. “My payment apps are connected to a bank account that’s not my primary account, so if something were to happen, it’s a low risk,” she says.
Update your privacy settings
“Default privacy settings are usually public,” notes Amanda Christensen, an accredited financial counselor and extension professor at Utah State University. That means a young adult’s payments to friends or funds received for a job could be visible to the public.
“The social part of the payment apps is where we get some of the best scammers out there because they can see what’s being regularly paid for,” Christensen says. To adjust who can see your activity in Venmo, for example, go into “settings” on the app and scroll to find the various “privacy” options, such as public, friends or private.
Earn a return elsewhere
Christensen suggests establishing a habit of transferring any balance out of payment apps once a week. “Set a note in your phone,” she says, cautioning against treating the app like a checking account, where you let money sit.
Not only is cash sitting in an app vulnerable to fraud, but it also doesn’t earn a return like it could in a savings account. Jake Cousineau, author of “How to Adult” and a high school teacher, says he sees many young people receiving payments for side jobs like tutoring through payment apps. Instead of quickly transferring the money into a savings account, they let it linger, which means losing out on interest that would otherwise be accumulating. Payment apps also generally lack the protections from the Federal Deposit Insurance Corp. that come with bank accounts, he adds.
Don’t forget to budget
The convenience of payment apps makes it easy to overspend, Christensen notes. That’s why she suggests turning to cash at times for a week or so. “Reconnect yourself to the pain of spending,” she says.
Cousineau recommends not letting “these apps get in the way of having a detailed budget.” Just because you can easily send a friend $20 with a few taps doesn’t mean you should.
The apps might even be able to help. Porto says you can use the timeline of a payment app to help track your spending. Just as with a credit or debit card, you can scroll through your history to determine what changes you might want to make in the future. “You can see where all the money went, which can be very powerful for college students,” he says.
In other words, leverage the power of these payment apps to help you manage your money, instead of just spending it.
This article was written by NerdWallet and was originally published by The Associated Press.
As parents, we want the best for our children: health, happiness — and hardy credit. Having a strong credit profile can determine whether your kid gets approved for a loan or how much they’ll pay for car insurance when they’re grown. But establishing credit for someone with no credit history is challenging.
A common workaround is for parents to add their children as authorized users on their credit card accounts. Credit checks aren’t required, and the user can quickly piggyback on the primary cardholder’s credit history. But this arrangement isn’t always the right move. Here’s what to know about the potential limitations of adding your kid as an authorized user and alternative ways they can build credit.
They might be too young to reap the benefits
If you’re hoping to boost your child’s credit before they even learn to tell time, you could face roadblocks. For one, your kid may not qualify for authorized user status. While some card issuers don’t have age restrictions, others require a minimum age of 13 or older.
Even if you can add your child, the issuer may not report their account details to the credit bureaus. Some issuers allow kids as young as 13 to become authorized users but only report credit information for those age 18 and older. It’s wise to ask your credit card company how authorized user arrangements work.
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Misuse can lead to damaged credit
Being an authorized user doesn’t guarantee improved credit. “Same as the primary account holder, it can affect your credit positively or negatively, depending on how the card is used,” says Bruce McClary, senior vice president of membership and communications at the National Foundation for Credit Counseling.
If you have a record of on-time payments and don’t use too much available credit, that can generate or help your kid’s credit score. But your credit and your child’s can suffer if either person uses the account unfavorably.
Ultimately, it’s up to the parent to keep the account in good standing.
“When you add someone as an authorized user, that’s what they are. They’re authorized to use the card but they are not legally bound to pay the bill. You are legally bound to pay the bill,” says Julie Beckham, an accredited financial counselor and financial educator in the Boston area.
You don’t need to give your kid the credit card. As long as the primary cardholder keeps their account open and active, the authorized user’s credit will share the effects. If you give your child the card, set some ground rules. Talk about when it’s OK to use the card, how much they’re allowed to spend and who will make the payments. Some credit card companies let you place spending limits for authorized users.
Authorized user status might not be enough for future lenders
Some lenders don’t take authorized user accounts into consideration when reviewing credit applications or give them much weight. “If you’re a lender and you’re looking at someone and you see the designation that they’re an authorized user rather than the primary account holder, it’s just telling you that this person did not have to go through a credit approval process to have access to that account,” McClary says.
Having an account in their own name puts your kid in a stronger position because it shows they’re equipped to manage payments. You can guide them toward opportunities in adulthood.
“There are credit-builder loans that are available. There are starter credit cards for young adult consumers, where the threshold for approval is a little bit lower. You can also look at options for secured credit cards that require no credit check, but they require a good faith deposit in order to open the account,” McClary says.
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The best way to set your child up for success is to talk to them about money, Beckham says.
You could look over your credit reports together or explain how many hours you need to work to pay for things like dinners or fun outings.
Encouraging good routines, like doing chores and turning in homework on time, is also important. “They’re transferable habits that can help them in their life financially as they build credit,” Beckham says.
Give your child opportunities to practice managing money before they graduate to credit. Beckham suggests letting kids test the waters with a checking or savings account. “Starting with their own money is always better because there is a sense of ownership and accountability to that,” she says.
This article was written by NerdWallet and was originally published by The Associated Press.
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know. There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere…
Do you want to learn how to move out at 18 with no credit, little money, or even no money? Here’s what you need to know.
There are many reasons for why you may want to move out at a young age – perhaps you have a difficult home life, you want to move somewhere new, or you just want your own space.
I moved out shortly after turning 18 (about a week or so after my 18th birthday) into a rental home, and while I was not prepared at all, I do think being prepared to move out at a young age is extremely helpful. I made many mistakes that led to many, many tears, money wasted, stress, and more.
Today, I want to help you avoid as many problems as you can.
After all, moving out at 18 years old (or any other young age) is already really hard, and there is such a huge learning curve.
Moving out when you turn 18 is a big step into becoming an adult. Even though it can be exciting, moving out for the first time needs to be planned carefully. Before you leave, it’s important to make a plan to make sure you can afford it and stay on your own.
This means finding a job, making a budget you can stick to, and saving money for unexpected costs.
How To Move Out at 18
Below are ways to move out at 18.
Recommended reading: Buying a House at 20 (How I did it)
Make a plan to move out at 18
I highly recommend having a plan if you want to move out at 18 years old.
Moving out at 18 is a big step, and making a plan will help everything go a little more smoothly.
You will want to think about things such as:
Where you will work
How you will pay your bills
If you will live with a roommate or on your own
What your budget will be like
What you’ll do if things get tough, such as if you can’t afford your rent
What you will do for health insurance and medical bills
And so much more.
I will be going further in-depth on many of these below.
Find ways to make money
If you are 18 and want to move out, then you will need to have a stable source of income, of course. There are many options for earning money, from traditional jobs to more flexible side hustles.
A full-time job typically gives you more hours and benefits like health insurance, which are helpful when you’re living on your own. If you have other things going on, a part-time job might be better because it offers more flexibility while still giving you money (but, you may not earn as much money). You can find job openings online, at job fairs, or on community bulletin boards. Jobs like delivering food can be either full-time or part-time, and companies tend to need people.
If you want to make more money, you can side hustle to make extra income – a way to make extra cash that you do alongside your main job. You could freelance by doing things like writing, teaching tutoring lessons, or designing graphics. Or, you could babysit for families nearby, walk dogs, or help people with tasks or errands. These little jobs can add up to a lot of money and give you the flexibility to work when you want.
When I was young and first moved out, I worked full-time at a retail store. I also eventually started a few side hustles (like blogging, freelance writing, and selling stuff online) so that I could pay off my student loans quickly. Living on your own is not easy, especially when you are young and your income is not that high – so side hustles may be needed so that you can make enough money to pay your bills.
Some helpful articles to read include:
Create a budget
When you’re ready to step out into the world at 18, you need a budget. I can’t think of any young adult who would not need a budget.
Budgets are great because they help you keep track of your money coming in and going out. With a monthly budget, you’ll know exactly how much you can spend on different things each month as it helps you see how much money you have and where you might need to cut back on spending.
A budget will help you to figure out if you can afford to live on your own, if you need to have roommates, or if you need to find a cheaper living arrangement.
Making a budget is easy. First, write down how much money you make each month from your job or other places. Then, write down what you need to spend money on each month, like:
monthly rent
food
phone bill
internet
car
fuel
utilities like electrical, water, trash, sewer, gas/propane
car insurance
medical/health
pet care
restaurants
cable, satellite, or any TV monthly subscriptions
household essential items, like toilet paper, trash bags, etc.
and some money for fun stuff too
Knowing your monthly expenses will help you to better manage your money so that you won’t go into credit card debt.
Recommended reading: The Complete Budgeting Guide: How To Create A Budget That Works
Save for the move (and open a bank account)
When you’re getting ready to move out at 18, saving money is obviously very important. If you can help it, I do not recommend moving out with no money saved.
Think about all the costs you’ll face – like rent, your first security deposit, food, and any unexpected things that pop up. You’ll want to tuck away money for this.
How much should you save to move out? A good rule is to save at least three to six months of living expenses. For example, if you spend $1,500 a month, aim to save between $4,500 and $9,000 before you head out on your own.
This will be your emergency fund. An emergency fund is money you save up for unexpected things that might happen. This could be paying bills if you lose your job or if your hours or pay get reduced. It could also cover unexpected expenses like a car repair, medical bill, or fixing a broken window.
An emergency isn’t something like buying a birthday present, a new TV, or going on vacation.
Having an emergency fund is smart because it can stop you from getting into debt you don’t need. Some people rely on their credit cards for emergencies, but that’s not a good plan.
I also recommend getting your own bank account for all of the money you save. It’s a safe place for your money, and it helps you track what you earn and spend. Plus, you’ll need it for things like direct deposit from jobs or paying bills online.
I personally use Marcus by Goldman Sachs for my savings account as they have a very high rate. You can get up to 5.50% at the time of this writing through a referral link bonus. According to this high-yield savings account calculator, if you have $10,000 saved, you could earn $550 with a high-yield savings account in a year. Whereas with normal banks, your earnings would only be $46.
Improve your credit score and history
When you’re moving out of your parents’ home, having a good credit score is super helpful. This is because your credit score and credit history may be used for things like getting approved for an apartment and getting signed up for utility bills.
If your credit score is low, then you may be denied an apartment and even have to pay large deposits to get signed up for utilities (like water and electric).
Here are some important things to know:
Understand credit utilization – This is all about how much credit you’re using compared to how much you have. Try to use less than 30% of your credit limit. Say your card has a $1,000 limit. Aim to spend no more than $300.
Always pay on time – You should pay every bill on time, every time. Even being a little late can hurt your credit score a LOT!
There are other ways to improve your credit, such as by getting a secured credit card or becoming an authorized user on a family member’s credit card.
Here are two really helpful articles I recommend reading:
I also recommend keeping an eye on your credit by checking your score and report. Sites offer free checks, and it’s good to know where you stand. That way, you can fix any mistakes fast.
Think about where you’ll live
When planning to move out at 18, picking where you’ll live is a huge step.
Here are some things to think about:
Think about who you’ll live with. Living by yourself can be expensive so sharing rent and other bills with roommates can save you money, but make sure you choose your roommates wisely. You’ll be sharing your space with them, so it’s important to pick people who are responsible and trustworthy (and will actually pay the bills!).
Try using online tools to compare different areas. You can check things like crime rates, public transportation options, and how close they are to places you need, like grocery stores.
Think about the cost. Can you pay the rent and utility bills every month? Make sure to include these costs in your budget. Sometimes, living a bit farther from popular areas can be cheaper.
For my first home, I rented a very small 400-square-foot home with no real bedroom. But, it was within my budget and next to my college (I lived a few miles away), and surprisingly affordable.
Talk to your parents
When you’re getting ready to move out at 18, it’s important to have a conversation with your parents. This might feel hard or even impossible, but remember that clear communication is important.
I recommend choosing a time to tell them when your parents aren’t too busy or stressed as having this conversation when everyone is relaxed can make it easier for everyone to talk openly.
I think it is also helpful to think about how your parents might feel. If you’re the first to leave the home, they might find it tough. Try to understand their perspective and mention that you’ll stay in touch and visit.
And, be ready to show them your plan. Your parents will want to know you’ve thought things through. If you’ve been saving money, let them know. Talk about your job and how you’re managing to support yourself. It’s good to tell them about the place you’re planning to move into and how you chose it.
How to move out of your parents if it isn’t safe
So, after reading the above, I know that some of you may not have a good home life. You may not feel safe telling your parents that you are moving out.
If that’s the case, then I recommend reading this section.
Sometimes, home isn’t the safe place that it’s supposed to be. If you’re in a tough situation and need to leave at 18 but can’t talk to your parents about it, you’re not alone.
Here’s what you can do:
Find an adult you trust – Look for someone you trust, like a teacher, counselor, or family friend. They can maybe give you support and help you figure out your options.
Plan ahead – Start thinking about where you’ll go and how you’ll support yourself. Look into shelters, transitional housing programs, or staying with a trusted friend or relative.
Know your rights – As you turn 18, you have rights. Learn about your options for housing, education, and employment because there may be resources available to help you.
Stay safe – If you’re in danger at home, prioritize your safety. Contact local authorities or organizations that can help you leave safely.
Take care of yourself – Moving out can be tough, but remember to take care of yourself emotionally and physically, such as by talking to friends, finding support groups, or talking to a counselor if you need to.
Leaving home at 18 without being able to talk to your parents is hard, but it’s not impossible. Reach out for help, make a plan, and remember that you deserve to live in a safe and supportive environment.
Get free stuff for your new home
One of the big challenges of moving out on your own is affording all of the different things that you need.
Luckily, there are ways to get things for free or really cheap.
Some of the top ways include:
Facebook Buy Nothing groups – This is my favorite place to start if you want to get things for free. These groups promote recycling and reusing items instead of throwing them away when you’re done with them. To begin, look for and join a local Buy Nothing group on Facebook. You can search for groups for your city. People list their free stuff all the time, such as furniture, electronics, clothes, and more. You can even make a post asking if anyone has something that you need.
Ask family and friends – Your family and friends might have extra stuff they’re willing to part with. They might even be happy to see it go to a good home – your new home!
Check online platforms – Websites like Craigslist, Freecycle, and Facebook Marketplace can be goldmines for free furniture. People often list items they want to get rid of quickly.
Visit thrift stores and yard sales – Thrift stores and yard sales sometimes offer “free bins” or low-cost items they want to get rid of fast.
Attend college move-out days – If you live near a university, go there on move-out day. Students tend to leave behind perfectly good furniture that’s yours for the taking.
Community centers and churches – These places often have bulletin boards with listings for free items.
Always be safe when arranging pickups, especially with strangers. Always bring a friend or let someone know where you’re going.
Helpful articles:
Handling utilities and bills
Dealing with utilities and bills is a big step in moving out. Utilities are services you need like water, electricity, gas, and the internet.
Before you move, call or visit the websites of local utility companies. You’ll need to set up accounts in your name. This might include a deposit fee, so be ready for that.
I recommend making a list of all your expected bills. Rent, electricity, water, internet, and maybe gas are usually the basics. Add them up to see how much you’ll spend each month.
After you move in, you will want to find out when each bill is due. It’s your job to pay them on time as paying late can lead to extra fees or even getting your services turned off. Some companies let you set up automatic payments, and this means the money comes out of your bank account on its own each month. This can make sure you’re always on time.
You will want to hold onto your bills and receipts. This way, if there’s ever a mistake with a bill, your records will help fix it.
You can save money by being smart about using your services. Turn off lights when you leave a room and unplug electronics that you’re not using. You might also shop around for better deals on services like the internet.
After you get your first set of bills, you will understand why your parents wanted to keep the air conditioning off or why they always asked you to turn the lights off – things can be expensive!
Also, remember that different times of the year will impact your bills. For example, your electric bill will most likely be a lot more expensive in the summer than it will be in the spring or fall.
Maintain your home (housekeeping)
Moving out at 18 means taking on the responsibility of housekeeping. You might be surprised how quickly your new home can become cluttered and get dirty.
Keeping your home nice starts with regular cleaning, and I recommend setting aside some time each day for tasks like washing dishes, making your bed, and tidying up the living area. This way, messes won’t pile up and become overwhelming.
Then, once a week, dedicate your time to deeper cleaning such as vacuuming, mopping floors, cleaning the bathroom, dusting, and doing laundry.
Housekeeping also requires tools and supplies, so you will want to plan your budget to include items like sponges, cleaners, and trash bags.
Make friends in your new community
Moving out at 18 is a big step, and making friends in your new community is important. It can make your new place feel like home. When you move, you might not know many people, but there are fun and simple ways to meet people.
Here are some tips:
Get to know your neighbors – Start with a smile and say hi to your neighbors.
Join local groups or classes – Look for groups that interest you. Love to paint? Find an art class. Enjoy cooking? Maybe there’s a cooking group nearby. Like rock climbing? Go to the local climbing gym. This way, you meet people who like what you like.
Visit community centers – Many towns have a community center. They have activities like sports, games, and events.
Making friends might take time, but it’s totally possible! Just be yourself and be open to talking to new people.
Balancing work and personal life
I’m guessing you will have a lot going on, between trying to work full-time and enjoying your life, and even possibly furthering your education.
I recommend trying to schedule your time so you don’t get too busy. Use a calendar or app to make sure you’ve got time for work, taking care of your place, and doing fun things too.
It’s okay to say no if you’re too busy. If you’re working a full-time job, you might not be able to hang out with your friends all the time. It’s all about finding a healthy balance between earning money and enjoying life. I had to say no to my friends many times because I was simply too busy. If your friends still live at home, it may be hard for them to understand this unless you explain your situation.
Plus, remember to take breaks. When you’re planning your week, set aside some time just for relaxing. Watching a movie, reading, or hanging out in the park are all great ways to unwind and give your mind a break.
Frequently Asked Questions
Below are common questions about how to move out at 18 years old with little money.
How can I move out fast at 18?
To move out quickly, focus on making a steady income and finding affordable housing. Create a budget to manage your expenses and look for immediate job openings or housing options. Saving as much money as you can right now is also super helpful.
How much money should I have saved by 18 to move out?
Aim to save at least 3 to 6 months of living expenses before moving out. This safety net can cover rent, groceries, and unexpected costs, giving you financial stability as you start on your own.
Can you move out at 18 while still in high school?
Yes, you can move out at 18 while in high school, but make sure you have a support system in place. Balancing school responsibilities with living independently can be very hard.
How to move out at 18 with strict parents?
When moving out at 18 with strict parents, communicate your plans clearly and respectfully. Prepare a well-thought-out plan to show them you’re serious and capable of managing your own life.
Can your parents not let you move out at 18?
When you turn 18, you’re legally an adult in most places, and you can decide to move out even if your parents don’t agree. However, it’s important to respect their opinion and explain your reasons. There are some places where you have to be older, so make sure you do your research.
Do I have to tell my parents I’m moving out?
While you’re not legally required to inform your parents in most places, it’s nice to talk about your decision with them, as transparent communication helps maintain a positive relationship after you leave.
Can I move out at 18 without parental consent?
Yes, in most places, at 18 you’re legally permitted to move out without parental consent. You will want to make sure this applies to your local area.
What things do you need when moving out of your parents’ house?
There are many things that you will need to move out of your parents’ house such as a bed, blanket, pillow, kitchen supplies, towels, a place to eat, a dresser, cleaning supplies, groceries, and more.
Is it realistic to move out at 18?
It is realistic to move out at 18 if you have a reliable income, a budget, and a plan for handling responsibilities. You will want to be as prepared as possible to move out at a young age because there will be many hurdles thrown your way, most likely.
How To Move Out At 18 – Summary
I hope you enjoyed this article on how to move out at 18 years old.
It’s really important to have a plan for a successful move when you are just 18 years old.
You’ll need to find ways to earn money regularly, like getting a job and even doing extra work on the side.
Having savings in the bank and an emergency fund will help you handle unexpected expenses without ruining your plans.
There are also many other things to think about, such as the cost of living, utility bills, your credit score, and more.
I moved out when I was just 18 years old, so I completely understand where you are coming from. I had no financial help from my parents and found and did everything on my own – from making money to finding a place to live, making all of my own meals, and more. It was hard, but it was what needed to be done.
Do you plan on moving out soon? Do you have any questions for me on how to move out at 18?
The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.
Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions. In this episode:
Learn how to utilize a tax advantaged 529 plan to help your or a friend’s children save for future education expenses.
This Week in Your Money: What are the risks of purchasing a home without an inspection? How can you plan for major expenses when healthcare providers can’t tell you how much their services will cost? Hosts Sean Pyles and Sara Rathner share their hot takes on unexpected financial challenges, with tips and tricks on handling surprise expenses, understanding the importance of home inspections, and dealing with healthcare industry inefficiencies.
Today’s Money Question: What are the benefits of a 529 college savings plan? Can you contribute to a friend’s 529 plan to support their child’s future? NerdWallet writer Elizabeth Ayoola joins Sean and Sara to discuss the essentials of 529 college savings plans. They discuss the types of educational expenses covered, the tax benefits associated with 529 plans, and the flexibility of choosing different state plans. They also answer a listener’s question about how to approach the sensitive topic of financial gifts for education with parents, sharing methods for contributing to a loved one’s 529 plan without overstepping boundaries. Then, they discuss the implications of the Secure Act 2.0 on 529 plans, methods for estimating necessary savings for a child’s education, and tactful ways to discuss educational contributions with parents.
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NerdWallet stories related to this episode:
Episode transcript
This transcript was generated from podcast audio by an AI tool.
Sara Rathner:
Hey Sean, has money ever made you mad?
Sean Pyles:
Yeah, it has, especially when I get a bill that I don’t expect to pay but have to anyway. So yeah, why?
Sara Rathner:
Yeah. Yeah, those surprise major expenses are a huge pain. I just had to replace my washing machine because the fun never stops in my house.
In this episode, we are going to let off a little steam about what makes us mad in the world of money.
Sean Pyles:
Welcome to NerdWallet’s Smart Money Podcast. Our job today is to help you be smarter with your money, one money question at a time. I’m Sean Pyles.
Sara Rathner:
And I’m Sara Rathner.
So listener, this show is all about you and your money questions. So, whatever financial decision you’re pondering, whatever’s making you mad about your money, let us know.
Sean Pyles:
Leave a voicemail or text the Nerd hotline at 901-730-6373. That’s 901-730-NERD. Or you can email your questions to podcast@nerdwallet com.
Sara Rathner:
In this episode, Sean and I answer a listener’s question about contributing to 529 accounts for your loved ones. But first, we’re going to yell into the void in our semi-regular Money Hot Takes segment.
Sean Pyles:
So here’s how this works. Sara and I just rail against whatever we feel like in the world of money. And let’s put, say, 100 seconds on the clock. That’s what? A second for every penny in a dollar. I don’t know, it’s just an arbitrary number really.
Sara Rathner:
That works for me. It’s a nice round number.
Sean Pyles:
All right, Sara, are you ready?
Sara Rathner:
Sean Pyles:
I’m starting my timer. Go.
Sara Rathner:
All right. I hate the trend where home buyers feel pressure to completely waive getting a home inspection before buying a property. That’s different from the type of waiver where you’ll still do the inspection, but then you’re assuming the cost of anything you find. It’s when you just do without the inspection entirely.
I live in a block of houses that are like 107 years old, and two houses on my block sold with waived inspections where the buyers had to put tens of thousands of dollars unexpectedly into problems in their house that they didn’t know about. I just had a neighbor text me asking for a roofer because the first time it rained since she moved in her house, it started raining on the inside of her house, which means that the seller just lived with that for however long before selling the house and passing the problem onto somebody else.
So especially if you’re a first-time home buyer, if you are going to drain your savings to buy your house, and then you’re not going to have much money left for repairs, be really careful about this. And as a society, can we just make inspections mandatory? That’s more consumer-friendly, honestly. People need to know what they’re getting into, and frankly, people should feel pressure to keep their houses well maintained before sale. There I said it.
Sean Pyles:
You’ve got 40 more seconds if you want to keep on railing.
Sara Rathner:
Oh man, I do? Well, if you haven’t bought a home yet, what’s nice about getting an inspector involved is they’ll look at all the major systems of the house, the appliances, the roof, all sorts of stuff, the electrical, the plumbing, and they will tell you the lifespan of some of those major things like a furnace or a boiler, your roof, your HVAC system. And even if something is going to go in the next year or two, at least you have this laundry list of things and when they’ll probably need to be replaced, and you can begin to budget for those replacements.
Sean Pyles:
Okay, that’s 100 seconds.
Sara Rathner:
Boom. All right, Sean, you got any reaction?
Sean Pyles:
Well, I totally feel that, because buying a house without knowing what’s wrong with it is very risky financially. Buying a house can be financially risky in and of itself, depending on how expensive the home is. But imagine getting into the house, it’s your first day, you’re super happy to be a homeowner, and then you realize, oh, it’s raining inside the house, or the crawl space is infested with termites. You don’t know what you’re getting into if you don’t have an inspection. And even if it may make you a more competitive buyer, it isn’t worth it, in my opinion, to get yourself into something like that because you just don’t understand the risks you could be taking on. And I’m all about mitigating risks as much as possible.
Sara Rathner:
All right, Sean, I have had my turn, and now it is your turn. I have set my timer for 100 seconds. And go.
Sean Pyles:
Okay. Today I am mad about industries that are designed to extract money from us while making our lives miserable or at least really frustrating. And I have one, maybe two, examples depending on how far 100 seconds takes me.
First step is healthcare. Americans spend far more on healthcare than other wealthy nations. Nearly 18% of our GDP in 2021 went to healthcare. And what are we getting for it? An incompetent extractive industry that exploits nearly everyone that engages with it. Among wealthy nations, the US has the highest rates of infant and maternal mortality and excess deaths, not to mention the daily indignities that come with trying to access healthcare.
I have a recent example that is a microcosm of these larger issues. I recently got a bill in the mail for some regular lab work, and the thing is, I have these labs done every few months, and they’re always covered by my insurance. But this time I got a surprise bill for nearly $200, and I’d already had an expensive month with some car repairs, and I was not excited about the prospect of an additional $200 to cover. So I called my doctor, and they said, “Oh yeah, the company that does the lab work just messed up. Oops, just disregard the bill.”
So if I hadn’t called my doctor, I would have been on the hook for this bill. This was a relatively small bill as far as medical bills go, and it was fairly easy for me to clear up. I’m obviously very fortunate in this case, but for so many people, especially those with chronic illnesses or complex medical conditions, the onslaught of navigating insurance, verifying that you’re being billed correctly and then somehow coming up with the money to cover bill after bill is just totally exhausting and can make achieving financial goals nearly impossible.
So why am I going on and on about things that we already know too much about?
Sara Rathner:
Just so you know, you’re over time.
Sean Pyles:
Oh, God. I’m going to keep going. I’m almost done.
Sara Rathner:
Keep going, Sean. Let’s do this.
Sean Pyles:
All right. I am going on and on about this because I think it’s important to remind people that it does not have to be this way. We are in an election year, people, so I don’t know, let’s try to do something about it.
Okay, Sara, how many seconds was that?
Sara Rathner:
Oh, well I stopped timing it the second it hit the clock, so that might’ve been just an extra 10 seconds, honestly.
Sean Pyles:
Okay. It’s hard to fit so much into such a small amount of time.
Sara Rathner:
You know what? Your rage is such that it cannot be fit into a tiny container and that is valid. It’s okay to let the rage out and give it some more space.
I agree with you. What’s annoying is, for example, this past year I had a baby, and that is expensive to the tune for me of $7,000 out of pocket after insurance. Hi. $7,000 is a lot of money, people.
And what was annoying about that, and this is something for anybody who maybe is facing a planned medical procedure like a surgery or childbirth or anything like that, or who takes medication for chronic illnesses, I tried to call the billing department at the hospital to talk to my insurance company to say, “Can you at least give me an idea of how much money I will be out?” I knew going into it that I would be having a C-section. So I could say, “I’m having a C-section, that means I have to work with an anesthesiologist, which is an extra expense. Can you tell me ballpark, even if you’re off by a grand, how much should I budget for this?” And everyone’s like, “We don’t know.” Shrug emoji.
Then the bills just fly in for months and you think you’re done. So you’re like, “Okay, we’re done paying for the hospital bill. Now we can put our money into other stuff.” And then you get another bill for like, $1,100.
Sean Pyles:
And you have to question, was this billed correctly? Was it coded correctly? You don’t know. And it just flies in the face of all the things that we try to talk about in the personal finance space, which is around anticipating big expenses, budgeting for it, saving up for it if you can. It’s impossible when you don’t know what you’re going to be paying.
Sara Rathner:
Right, and if you’re facing surgery, what, are you just going to not have anesthesia to save money? Do not recommend.
Sean Pyles:
That is not a money-saving tip that we would recommend. No.
Sara Rathner:
No, that’s a place where you should spend good money, get good and numb.
But really it is an extra expense. And that’s so, so frustrating because you are not only out a lot of money, but you’re feeling kind of vulnerable because you’ve just gone through some medical stuff, even if it’s just blood work or something, and you want to take good care of your health, and it’s sometimes financially impossible to do that.
Sean Pyles:
Yeah. Not to mention completely demoralizing.
Sara Rathner:
Yeah, and some people just don’t go to the doctor because of the cost, or the dentist. And then years later, they’re faced with really serious health issues because they’ve been neglecting their health because of the cost.
Sean Pyles:
Yeah. I don’t know, it’s really tough in this space to talk about medical expenses because at NerdWallet and in the personal finance realm, we try to give actionable advice, and a lot of the time the advice is reactive. If you get a medical bill, you do have to ensure that it’s coded correctly. Maybe try to work out a payment plan with your medical office if you can’t cover the bill in one go. But it’s so hard to be proactive like you were just describing and understand what you’re going to have to pay if you want a routine procedure like blood work or something more significant like having a baby, makes me want to yell into the void all day every day.
Sara Rathner:
Yeah. Well, we took more than 100 seconds about this. If you have a body, then this is something that affects you, and it is really hard to deal with those extra unexpected costs.
Sean Pyles:
All right, so that is what we are mad about this week, listener. I know there’s a lot to be mad about in the world of money, so do not keep it in. Let us hear what you’re mad about, and we might just share it on a future episode.
You can text your Money Hot Take to us or leave a voicemail on the Nerd hotline at 901-730-6373. That’s 901-730-NERD. Or you can email it to podcast@nerdwallet com.
Sara Rathner:
All right, I don’t know about you, but my heart rate is starting to come down from all of that. Ooh, deep breaths, everyone. This episode’s money question is up next. So calm down too and stay with us.
Sean Pyles:
This episode’s money question comes from Lauren, who wrote us an email. Here it is.
“Hi nerdy Nerds. I’m not a parent. I’m never going to be a parent. Because of that, I have made it part of my financial plan to contribute to the 529 plans of kids around me. Because I don’t have nieces and nephews, I’m contributing toward the savings of my friend’s three-year-old. How much needs to go into a 529 starting at age two or three to cover a four-year private college?”
“I got the details on this kid’s 529 plan from his dad and started contributing about $100 a month. We didn’t talk about it. I intend to keep chipping in until the kid is done getting formal education 20 to 25 years from now. How do I talk to the parents? I want to understand if I’m helping enough without becoming privy to their private financial details. I also don’t want to make it seem like I have any vote whatsoever in how the kid charts an educational path. How do I broach this with the parents?”
Sara Rathner:
To help us answer this listener’s question, on this episode of the podcast, we are joined by NerdWallet writer Elizabeth Ayoola. Welcome.
Elizabeth Ayoola:
Hello, and hi.
Sean Pyles:
Elizabeth, so good to have you on.
So let’s start by setting some groundwork. Can you please describe what a 529 college savings plan is, how they work, and why they’re such a big deal?
Elizabeth Ayoola:
A 529 plan is a huge deal indeed to me anyway. I wish I had one when I went to college because I was left with a huge bill. But anyways.
529s are tax advantaged college savings plans, and they allow people to save and invest money for education expenses. So, with that said, the money gets to grow, and it gets to compound, which can mean beneficiaries have a nice education pot to pull from when they need the money. And for those who don’t know what compounding is, it’s essentially when your interest earns interest.
Sara Rathner:
It’s the eighth wonder of the world.
Elizabeth Ayoola:
Sara Rathner:
So you mentioned education expenses and that’s what the purpose of this account is, but what kinds of education expenses can you use a 529 to fund?
Elizabeth Ayoola:
Funds in a 529 account can be used to cover a vast range of qualified expenses, and that can range from tuition to computers and education related equipment. The expenses can also be used to pay for education needs of your beneficiaries. And the good thing that I like is that the beneficiaries can be in anywhere from kindergarten through grade 12. So that said, it’s not only for college students.
Sean Pyles:
Right, that is a really good point because people hear about 529 accounts, and they think they may be specifically for people going through a traditional four-year education, but people can also use the funds in the 529 college savings plan to cover things like trade schools too. So it really isn’t only for that traditional four-year higher education route.
Sara Rathner:
So earlier you mentioned that 529s are tax advantaged accounts. Can you talk a little bit about the tax treatment of them, and what should people know when they’re considering opening a 529?
Elizabeth Ayoola:
Well, one thing that I personally like about these accounts that some people don’t know also is that some states offer a tax deduction if you contribute to their plan. And when I say their plan, I mean the state that you live in. But there is no federal tax deduction for a 529 contribution. So it’s only at a state level. The tax deduction is usually capped. So no, you can’t just deduct your entire contribution. The deduction amount varies from state to state. So it’s best that you check in your state what the amount may be, if they offer it.
And a little bit off-topic, but I also like that the IRS doesn’t set a cap on your contributions to a 529 account, although some states do set a limit.
Sean Pyles:
And I’ll call out two other tax benefits of 529 college savings plans. The first is that investment growth in this account is tax-free, and second, distribution for qualified expenses like tuition or books are also tax-free.
Elizabeth, another important thing to know about 529 college savings plans is that each state has their own, and you don’t have to choose the 529 plan from the state that you live in. And this can all get a little bit confusing because there are so many states to choose from. So, at a high level, can you outline the main differences between a 529 from one state to the next, and how would someone go about choosing which state’s 529 plan to use?
Elizabeth Ayoola:
One of the major differences that people should know and a reason that people may cheat on their state’s 529 plan is lower fees. I personally have a 529 from a different state than my current home state for that very reason. So people should consider shopping around and comparing fees before opening an account. Ultimately, the goal should be to do some math and see whether the deductions and the credits that you’re going to get in the state that you live in are worth more than the lower fees that you could get in another state in the long term.
Also, note that you can open multiple 529 accounts. I have multiple 529 accounts. I recently opened a second one in my home state, Florida, because my son was awarded a grant and it could be transferred to a 529 account, but the catch was it had to be a Florida 529 plan.
Sara Rathner:
So 529s have some flexibility, which we talked about before, not just for four-year educations, but also for trade schools and for K to 12 expenses as well. And interestingly enough, 529s were just made even more flexible. Can you talk about recent changes around the ability to roll 529 funds into a Roth IRA, and what that means for folks who maybe aren’t considering going to college?
Elizabeth Ayoola:
The Secure Act 2.0 was recently passed, and if I can be honest, that’s what motivated me to open up my first 529 account, and I just opened it last year. I was always on the fence and only saved money in a brokerage account because I was afraid of what would happen if my son decided not to go to college in 15 years. He’s six, by the way.
I decided to get off the fence when the Secure Act 2.0 made it possible for people to roll at least a portion of the unused funds into a Roth account. However, you do have to wait until 15 years after you’ve opened the 529 account before you can roll those funds over. And you can also only roll up to a certain limit starting in 2024. It may be ideal to read the IRS’s rules, they have a lot of fine print around the conversion or speak to a finance professional about it.
I think Roths are also awesome because they aren’t subject to required minimum distributions and withdrawals. They’re also tax-free when you meet certain requirements like waiting until 59-1/2, amongst other rules.
Sara Rathner:
All right, well thank you for that great summary of the tax rules surrounding this new change. We just want to let you all know that we are not investing or tax professionals, and if you have any specific questions to your own situation, definitely consult a professional who can give you guidance.
Now let’s turn to the fun stuff. The math, Sean. I know that you are in the midst of your certified financial planner coursework. I have slogged through that myself. It is a lot. It is a lot of math.
Sean Pyles:
Sara Rathner:
And now that you know how to do it, I’m sure you’re eager to show off your chops. So are there any insights you can share that will help our listener figure out how much they need to save every month or every year to help their friends reach their savings goals?
Sean Pyles:
As a matter of fact, yes. And you’re right, I have been waiting for an opportunity to show off what I’ve been learning about because often I’m just doing calculations in silence and this is a time for me to be loud and proud about hitting buttons on a calculator. So let’s do it.
I’ll spare you and our listeners the specifics of the calculation, but I plugged the listener’s situation into a time value of money calculation and got a rough estimate for how much they will need to save.
Sara Rathner:
All right, drum roll. What’s the number?
Sean Pyles:
For our listener to meet the savings goal that they outlined in their question, remember, they want to save for four years of education at a private college starting now-ish and saving until the kid finishes school. They would need to save around $8,000 per year. Obviously, that’s a lot of money to contribute to a 529 account, no less for a kid who isn’t your own. And this is why 529s are often just part of the picture when it comes to paying for college, which usually includes some combination of scholarships, grants and loans and generous gifts from family friends.
Sara Rathner:
That is definitely more than a hundy a month.
Sean Pyles:
Yeah, that’s for sure.
All right, so all of that math out of the way, I want to talk about the other part of our listener’s question. They seem to be concerned about how much they should contribute and also how to talk about this with their friends. I am not a parent, so I would love to hear from both of you who are parents, how you would approach the situation if you had such a generous friend. Would you welcome the money, or say get out of my business? Or if you are going to accept this money, if you want to have this conversation with your friend, how would you want them to communicate that with you?
Elizabeth Ayoola:
Honestly, I would welcome the money, especially because I’m a single mama. So as a matter of fact, my friends always contribute to my son’s savings account in London for his birthdays or holidays and I really, really appreciate it. It can be a better gift to me than toys that stab me in the foot within a few days.
Sean Pyles:
Elizabeth Ayoola:
I would also appreciate a friend asking me what my savings goals are, so they know how to support that goal. However, I do think, for the sake of boundaries, I would like my friend to ask me my comfort level with the topic before they dive in and start trying to give advice.
I think it’s also important to note that not everyone is comfortable discussing money or financial goals. But with that said, here’s an example of maybe how somebody could say it. So you may say, “Hey, I want to help you reach John’s college savings goal. Are you comfortable discussing that target number you have in mind, and can you tell me how I can support that?” Or another option could be you saying, “Hey, would you like to do the math yourself and then let me know how I can support that goal?” So those are just a couple of options.
Sara Rathner:
Yeah, I mean, I’m not going to look a gift horse in the mouth. College is expensive now, and it’s only going to become even more expensive in the future. Even in-state tuition, where I live in Virginia, is often over $20,000 a year. That used to be the economical way to get a four-year degree, and now it’s also very, very expensive. So what’s it going to be like by the time my kid’s in college? I don’t know. A lot.
Sean Pyles:
I think we can confidently say more money.
Sara Rathner:
Confidently, we can say a whole lot more money.
I would want my friends to decide for themselves what they feel comfortable giving, because I don’t feel comfortable telling another person how they should allot their money because they have other competing financial goals and obligations. And I never want to tell another person what they can do with their money unless they specifically ask me to tell them what to do with their money, which nobody ever asks me.
Sean Pyles:
And you also don’t want to give the impression that your friends can’t look after their own family’s finances, right? That’s a bit of the awkwardness underlying the question, is you want to help someone that you care about and this child that you’re seeing grow up in the world, but you don’t want to impose your will upon them. It seems like our listener is being very thoughtful about that. And you don’t want to make it seem like you think they aren’t doing enough.
Sara Rathner:
Right, or you think their kids should go to a four-year private university because that’s what you value, but maybe the parents have other values that they want to impart upon their child as the kid grows up, and then the kid will go off and do their own thing as a young adult.
In my case, we have a 529 for our son. We have family members who’ve contributed money. They’ve just written checks to us, and then we deposit it into our account that is tied to our 529 and then deposit the money into the 529.
Ultimately, when you contribute, you do go through the account owners, and that’s oftentimes parent or guardians. You are going to have to communicate with them because they’re ultimately the gatekeeper of that account. They are the owners, and then the child is the beneficiary.
Sean Pyles:
That actually brings up something that I wanted to talk about, which is who would own this account? The listener could in theory open up a 529 account on their own for this kid. But long-term, it’s probably going to be easier if the parents are the owners of the account, because that way when the kid is eventually ready to go to college or trade school or what have you, the parent can be the one managing those distributions.
Personally, I know as a friend, as much as I love my friends and my friends’ kids, I don’t want to have to manage that down the road. So that’s something else that they should think about when they’re talking about this with their friends.
Sara Rathner:
I definitely agree with talking to the parents and ultimately contributing to an account that the parents or guardians are in charge of.
Sean Pyles:
Well, Elizabeth, do you have any final thoughts around 529s and helping your friend’s kids afford college?
Elizabeth Ayoola:
I think we have given some very juicy tips here and only two more things come to mind, which is one, while it’s noble to contribute to your friend’s kids or loved one’s kids’ 529 account, please take advantage of any state income tax deductions that you might be eligible for. The rules around this can be muddy. And I know the original listener who asked this question lives in a different state than where he’s contributing, but sometimes you’re able to get a deduction depending on the state that you live in. So if you can get money back, I mean, why not?
My second thing that I’ll say is that if your loved one doesn’t have a number in mind, guide them to a college savings calculator or run the numbers together over coffee if they’re open to doing that.
Sean Pyles:
Great. Well, thank you so much for coming on and talking with us.
Elizabeth Ayoola:
I loved it. Thank you for having me.
Sean Pyles:
And that is all we have for this episode. If you have a money question of your own, turn to the Nerds and call or text us your question at 901-730-6373. That’s 901-730-NERD. You can also email us at [email protected].
Visit nerdwallet.com/podcast for more info on this episode. And remember to follow, rate, and review us wherever you’re getting this podcast.
Sara Rathner:
This episode was produced by Sean Pyles and myself. Kevin Berry and Tess Vigeland helped with editing. Sara Brink mixed our audio. And a big thank you to NerdWallet’s editors for all of their help.
And here’s our brief disclaimer:
We are not financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances.
Sean Pyles:
And with that said, until next time, turn to the Nerds.
The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
Becoming an authorized user on an open credit account, paying down student loans and securing credit builder loans can help young adults build credit.
Learning how to build credit at 18 can pay dividends throughout your life and help you explain financial concepts to others. Length of credit history is one of many factors that impact your overall credit score, so building credit early on can make it easier to secure credit cards and loans in the future.
Here, you can learn how to build credit at 18 and better understand which factors influence your credit health. You can also discover how Lexington Law Firm can help you improve your financial literacy.
Key takeaways:
You don’t have a credit score until you take actions that are reported to credit bureaus.
Length of credit history makes up 15 percent of your FICO® credit score.
Paying down student loans will positively affect your credit over time.
Table of contents:
1. Learn what credit score you start with
Starting credit scores vary from person to person and are largely based on each individual’s financial habits. When you first secure a loan, a credit card or a line of credit, your credit habits during the following six months will determine your starting score. Afterward, your credit score can increase or decrease based on several factors.
Who provides credit scores?
Credit reporting bureaus keep track of your credit history and provide reports based on your financial habits. Equifax®, Experian® and TransUnion® are the three main credit bureaus you can request a credit report from. Your credit score will be based on the information found in your credit report.
The law requires each bureau to provide at least one free report each year. Checking one of your credit reports every few months throughout the year can help you track your credit habits and progress.
2. Become an authorized user on a credit card
Just like other adults, young adults can become authorized users on another person’s credit card with the cardholder’s permission. With this method, an individual without any credit history can make purchases with a credit card and gradually build credit.
The caveat to this method is that all activity with a credit card will affect everyone connected to it. If a young adult gains access to one of their parents’ credit cards, the child’s activity will increase or decrease their parent’s credit score as well as their own.
3. Apply for a student loan
As previously mentioned, length of credit history can positively impact your credit score. For many young adults, a student loan will be their first credit account until they can acquire a credit card.
Paying off your loan might temporarily cause your score to dip, as your oldest account will be closed. However, regularly making timely payments will benefit your overall credit score far more than this dip will hurt it.
4. Secure a credit builder loan
Credit builder loans are helpful options for individuals with no credit history and people looking to repair their credit. These loans often have flexible requirements for applicants, though they typically have higher-than-average interest rates and brief repayment terms.
Community banks, credit unions and online lenders offer various credit builder loans. Large commercial banks don’t usually offer these loans, as their small payout amounts (normally $300 – $1,000) aren’t helpful to their everyday operations.
5. Frequently review your credit report
Challenging an error on your credit report and getting it removed can be an effective way to improve your credit. To discover these issues, it helps to routinely check your credit reports throughout the year.
Equifax, Experian and TransUnion all accept challenges by phone or online, and Lexington Law Firm can also help you challenge any errors on your report. Explore our services and see what features our tiered plans provide.
6. Space out your credit card applications
Every time you apply for credit, a hard inquiry occurs. This means that a third party (i.e., the bank offering the credit card you applied for) asked to review your credit report. Hard inquiries can appear on your report for years, but they’ll generally only hurt your credit for 12 months.
Issues can arise if you apply for too many credit cards or other lines of credit in a short period. Those dings against your credit can mount and damage your credit. On the other hand, spacing out your applications can help keep your credit healthy and stable.
7. Manage your credit utilization ratio
Your credit utilization measures your current account balances against your total credit limit. The higher your utilization is, the more negatively it will affect your credit. Ideally, it’s best to keep your utilization below 30 percent, or even 10 percent if possible.
Here’s an example to help visualize credit utilization. If you have a total credit limit of $5,000 and you’re currently using $500 of your available credit, your credit utilization will be 10 percent.
8. Use a credit monitoring service
Credit monitoring simply refers to reviewing credit reports and making decisions based on that information, whether you see inaccurate information that needs to be fixed, or accurate information that shows you where you can improve your credit usage. People can do this process themselves or seek out a credit monitoring service for help. Institutions like banks, credit unions and the three credit bureaus all provide distinct credit monitoring services.
Learn to manage credit with Lexington Law Firm
Young adults looking to build and manage their credit have many resources at their disposal. Still, professional advice from individuals with years of experience can make a big difference. Lexington Law Firm can provide a free credit assessment to help you get a sense of where your credit is starting and where you may want to go from here.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.
Reviewed By
Brittany Sifontes
Attorney
Prior to joining Lexington, Brittany practiced a mix of criminal law and family law.
Brittany began her legal career at the Maricopa County Public Defender’s Office, and then moved into private practice. Brittany represented clients with charges ranging from drug sales, to sexual related offenses, to homicides. Brittany appeared in several hundred criminal court hearings, including felony and misdemeanor trials, evidentiary hearings, and pretrial hearings. In addition to criminal cases, Brittany also represented persons and families in a variety of family court matters including dissolution of marriage, legal separation, child support, paternity, parenting time, legal decision-making (formerly “custody”), spousal maintenance, modifications and enforcement of existing orders, relocation, and orders of protection. As a result, Brittany has extensive courtroom experience. Brittany attended the University of Colorado at Boulder for her undergraduate degree and attended Arizona Summit Law School for her law degree. At Arizona Summit Law school, Brittany graduated Summa Cum Laude and ranked 11th in her graduating class.
When your child heads off to college, you are probably awash in all kinds of emotions. Pride, relief (yes, they got into school!), sadness, anxiety, and excitement can all swirl around you. Your baby is growing up and forging their own independent life. Will they make new friends? Like their classes and excel in them? Find their way around campus easily enough? Will they overspend, sleep through class, and stay out all Friday night?
Part of having a college student as a child means you must get used to some separation and lack of information. But that doesn’t mean you can’t continue to play a vital role in their life. Here, some wise advice about conversations to have, topics to cover, and when to help them have an amazing time at school.
Advice for Parents of College Students
Although each parent-child relationship is unique and each parent may face different challenges with their college student, there are moments that can be universal when your “baby” heads off to university life.
You’ll need to know how much to let go and encourage your child to become independent versus how much you should continue to provide support, whether that’s emotional support or financial.
Where that line should be drawn for each child and parent depends upon things like the seriousness of the problems being faced and how temporary or permanent they may be. In general, though, tips include:
• Listen, but try not to dive right into problem solving. This may not be the moment to lead with, “Here’s what you need to do…”
• Be mindful about how often you communicate and give your college student space while also staying available. Texting constantly and expecting quick replies will be unrealistic for many parents.
• You may be used to getting those report cards regularly and monitoring your child’s checkups at the doctor’s office. Recognize that now, times are changing, and you may not always be kept in the loop. FERPA (or the Federal Education Records Privacy Act) gives college students new privacy rights that can be defined pretty broadly. You may want to talk to your child about signing a FERPA waiver that will give you more access to information.
Accepting that college isn’t just about education but also about your child establishing themselves as an independent adult is an important transition for both of you. 💡 Quick Tip: Pay down your student loans faster with SoFi reward points you earn along the way.
Parenting College Students During Summer Break
Just when you figure out how to parent your child when he or she is away from school, summer break arrives with a different set of challenges. The young adult that you watched leave for college is probably not the same person who is returning. Maybe they don’t want to chat as much as before, or don’t seem as open to talk about daily life, friendships, and relationships.
The parent-child dynamic may be less about directing your kid’s actions and more about creating a collaborative partnership.
This can include things like withholding judgment about your child’s actions and making requests rather than demands — even when you’re sure you’re right. Your child is growing up and stretching their wings, both at school and when they return. They are becoming a full-fledged adult, after all.
Analyze which rules are the most important, and focus on those, letting other ones go. One example is you might ask that he or she call you if dinner will be missed, but not try to impose a curfew.
Recognize that during summer break you’ll probably need to readjust to being together, while also focusing on enjoying your time together.
Conversations about Paying for College
As part of your evolving parent-child relationship, you’ll likely find yourself in conversations about the best ways to pay for college. As the parent, you’ll likely initiate these talks. As part of your discussions, you may want to:
• Be clear about how much money you’re willing or able to contribute towards your child’s college expenses and how much your child will need to contribute.
• Discuss how much college will cost once you add tuition, housing, books, and other expenses together.
• Talk about student loans, including the differences between federal student loans and private student loans.
• Discuss how your child working during college may help pay for expenses.
• Talk about money management and how your child may feel some stress over student loan debt.
Here are some valuable topics to mention.
• There are scholarships and grants that usually don’t need to be repaid. What’s left is the amount that typically needs to be paid for by a combination of parental contributions, student contributions, and student loans.
• The two main types of student loans are federal and private. To qualify for federal student loans, you’ll need to fill out the FAFSA® (or Free Application for Federal Student Aid). This form needs to be filled out every year to determine eligibility for federal student aid dollars, including federal student loans.
• Federal loans can be subsidized or unsubsidized. Students may be eligible for a subsidized loan if they have a certain degree of financial need. Subsidized loans do not accrue interest during the six-month grace period after graduation/dropping below half-time enrollment and during any loan deferments.
• If the student drops below half-time enrollment, the grace period will begin even if he or she has not graduated yet, although there are some circumstances in which the student loan grace period can change.
Unsubsidized federal student loans do not require a demonstration of financial need, but do accrue interest during the entire loan period.
Private student loans are not funded by the government. Your child can apply with individual lenders, and each loan will come with its own terms and conditions, including repayment terms. Private loans can help fill the gap between what your child can pay with scholarships, grants, or federal loans. 💡 Quick Tip: Would-be borrowers will want to understand the different types of student loans that are available: private student loans, federal Direct Subsidized and Unsubsidized loans, Direct PLUS loans, and more.
Saving for Your Child’s College
If you’re still saving for your child’s education, your options may include:
• What are known as 529 college savings plans, also called qualified tuition plans, allow you to save for college while potentially offering tax benefits. Money saved in an education savings plan (sponsored by some states) can be used for tuition, fees, room and board, and other qualified higher education expenses at a college or university.
• Prepaid tuition plans (available at some universities) offer the option to prepay tuition and fees at current rates.
• Traditional or Roth IRAs, although more commonly used to save and invest for retirement, can be used to save for college expenses. .
• Coverdell Education Savings Accounts allow you to set up an account to pay for qualified education expenses, but contributions are not tax deductible and are only available for people whose income falls under certain limits.
• Uniform Gifts to Minors Act (UGMA) or Uniform Transfers to Minors Act (UTMA) accounts are intended as a savings vehicle for beneficiaries under the age of 18. Depending upon your state, the funds will transfer to your child at either age 18 or 21 and do not have to be used for education expenses.
Tax Credits and College
When it’s tax time, if you claim your college-age child as a dependent, you might qualify tax credits related to education.
• The American Opportunity Tax Credit could be helpful during the first four years of their undergraduate education. Qualifications include MAGI, or modified adjusted gross income, among other factors.
This is a credit for tuition and other qualified education expenses worth up to $2,500 per eligible student and could reduce the filer’s tax bill, not their taxable income.
• The Lifetime Learning Credit is also a tax credit, but may be harder to qualify for. Each year, you can claim either the AOTC or the LLC, but not both.
Parent Student Loans
You may be able to take out loans for your child’s education expenses, including a federal Parent PLUS Loans, available to parents of dependent undergraduate students for the amount of attendance costs minus other financial aid.
Private lenders may also be an option. Fees, rates, and repayment options vary by lender and they don’t typically offer forbearance or deferment options like federal loans do. As another option, you may be able to co-sign a private student loan with your child.
SoFi Parent Loans
Paying your child’s tuition with SoFi’s flexible, competitive-rate parent loan may be an option for consideration as well.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
Cover up to 100% of school-certified costs including tuition, books, supplies, room and board, and transportation with a private student loan from SoFi.
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SoFi Private Student Loans Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
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Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.