“Adulthood” is amorphous at best.
As Pamela Druckerman once wrote in the New York Times, “There are no grown-ups … Everyone is winging it, some just do it more confidently.”
Being an adult, then, might be more about what you can handle than the date on your birth certificate.
“Financial adulthood can come at any age,” says c ertified financial planner Sophia Bera, founder of Gen Y Planning . “It’s being comfortable talking about and taking ownership of your money. Instead of just letting your financial situation happen to you, you’re using your money to match your values and live your dream.”
Need something more concrete?
Bera consulted on the 16 points below. If you can check them off your list, go ahead and consider yourself a financial adult.
1. Have at least one to two credit cards and a debit card, and be able to pay your credit cards on time and in full every month, without overdrafting your checking account.
2. Know your credit score and check your credit report at least annually. Here’s where to find them.
3. Have at least one retirement fund, and contribute to it regularly. Ideally, increase your contributions every year (even if it’s only by 1%) until you max them out.
4. Have an emergency fund. As a general rule, that means about six months of living expenses in a separate savings account to use in case of a financial or medical emergency.
5. Have health insurance — as well as car insurance, renter’s insurance, and homeowner’s insurance if applicable. You’ll also need life insurance if you have a child, and disability insurance if you are working and rely on your income.
6. Have some form of a budget, or at least have a system for tracking your spending and an awareness of how much you spend each month. If you could use a hand, here are the most popular budgeting apps.
7. Know your take-home pay every month. After taxes. This is the number that represents your monthly income, and the cornerstone for your budget.
8. Know your net worth. Your net worth is your assets minus your liabilities (any debts), and serves as a convenient gauge of whether things are getting better or worse. Check in with it at least annually.
9. Spend less than you earn. Don’t spend what you don’t have — that’s how you get into debt.
10. Have a system for remembering and paying your bills. Whether that’s setting up automatic payments for fixed costs, setting Google calendar reminders on the first day of the month, or calling your credit card company to streamline your due dates, you shouldn’t be forgetting about bills, or leaving them unpaid.
11. Work on paying off any student loans or consumer debt, and know when you’re going to be debt-free. Here are some tips from former debtors.
12. Know your financial goals and how you’ll achieve them. “Buying a house someday” is just the start. “Buying a house in five years with a $50,000 down payment after diverting my bonus and a percentage of my paycheck into my ‘home’ savings account starting today,” on the other hand, will help you map out where you want to be and how you’ll get there.
13. Optimize your taxes, whether that means working with software or with an accountant. Be able to ask for help if you need it. Low-income and elderly tax filers can get free assistance through VITA, an IRS program manned by volunteers.
14. Have a secure, accessible filing system for your important financial documents. Here’show long to keep any financial record.
15. Be able to get on the phone and question/dispute charges or costs that seem inaccurate or unreasonable. And be polite while doing it. If you don’t speak up for your money, no one will.
16. Be secure enough to say no to expenses you can’t afford or don’t want. On the other hand, know when it’s most important for you to be able to say yes, and figure out how to afford the things that mean the most to you.