To ensure you receive the best service possible,
please enter your zip code below:
a good start
From savings products to insurance and more, AAA can help you simplify your finances and be more confident about your money when you’re on your own for the first time.
This article is the second in the Financial Planning for Every Stage of Life series.
Many young adults are navigating a challenging financial landscape. Rising living costs, student loan payments and uncertain job markets can make it hard to build stability. But financial planning for young adults doesn’t require a large income or perfect circumstances. It can start with small, intentional steps that may lead to long-term confidence and independence.
Whether you’re trying to build new savings, pay down debt or just figure out where your money goes each month, the steps you take today can help shape your financial future.
Graduation can feel like a huge win and a major reset all at once. You may finally be out of the classroom, but new responsibilities, like student loans, health insurance or rent, can show up fast. This is where college financial planning shifts to real-world money management.
Start by determining your monthly income and expenses to build a budget around them. If you’re between jobs, estimate based on part-time work or side gigs. Knowing your numbers, even if they’re small, can help you set short-term goals and avoid debt while you find your footing.
That first real paycheck might feel like more money than you’ve ever had (or still not quite enough). Either way, getting into a rhythm of monitoring it early can help you avoid the stressful cycle of “Earn, spend, repeat.”
Think about your short-term needs and goals and the actionable steps you can take to achieve them. For example, auto-deposit a set amount of money into your emergency fund every week, even if it’s just $20. Pick one or two habits to focus on, such as tracking spending or setting up automatic savings, and build from there.
Money management can be a big source of anxiety when you’re on your own for the first time. These four tips can help you create a monthly budget—and stick to it for the long term.
Read MoreLiving in a dorm or with family usually means room and board are bundled into one cost. But once you’re out on your own, they break down into a dozen separate expenses, from rent and utilities to streaming services, food, laundry and furniture. Financial planning for college students starts to matter in a different way when you’re suddenly covering most of that yourself.
If you want to move out, make a list of everything you could be responsible for, including monthly expenses, one-time fees and things you may not consider like renters insurance. Total it up and compare it to your take-home pay. If the math doesn’t work, you may need to adjust by choosing a more affordable place, finding a roommate or holding off on moving until you’ve saved more.
If you’ve never had to make monthly debt payments before, figuring out where to start can feel overwhelming. Between due dates, minimums and changing interest rates, it’s easy to lose track or miss something important, which could impact your credit score.
Advanced financial planning for college graduates means understanding how the choices you make to pay for school can impact your financial situation once you’re on your own. Make a list of what you owe, the interest rates and when payments are due. Then, create a plan for paying down what’s urgent or can be renegotiated through a payment plan.
If you’ve never had a credit card before, your credit history might be too limited to get approved for an apartment or a car loan. Your credit score can indicate how reliably you manage your finances, and when you have no credit history, companies assume you’re a higher risk. And that could mean you get charged a higher interest rate or are denied credit altogether.
One way to start building credit is to open a low-limit credit card and pay it off in full every month. Similarly, a secured credit card, where you pay a deposit and that amount is your credit limit, can help as well. You can also put your phone and utility bills in your name and make sure they’re always paid on time. These small steps can help establish your credit record and put you on the right track.
Retirement may seem a long way off, but starting early, even with small amounts, can make a significant difference later due to the power of compound interest. For example, if you consistently put away $50 a week starting when you’re 22 and the money grows at 7% a year, you could have nearly $600,000 saved by the time you’re 65. Wait just 10 years to start at 32, and the amount saved when you reach 65 is less than half—$285,000—even if you save the same amount at the same interest rate.
If your job offers a 401(k) with a match, start there; that can add free money to your retirement fund. If not, consider opening an IRA or a high-yield savings account. Personal financial planning is about consistency; starting to save and investing small amounts now can be an advantage for your future.
AAA’s exclusive webcast series, Well Worth It, is designed to help you master your finances with confidence. From personal finance and budgeting to understanding insurance and planning for the future, this series covers it all.
Watch NowWhether it’s a car loan, a laptop for work, or a deposit on your first apartment, bigger expenses can sneak up and throw off your budget if you don’t plan ahead. Rather than turning to credit or last-minute loans, try breaking the total into smaller monthly savings goals.
For example, say you want to cover your $1,200 share of an apartment deposit in six months. That will require saving $200 a month or $50 a week. This sort of planning can help you consider things in advance, so these costs don’t become debt or prevent you from meeting your basic needs.
You might be considering grad school, relocating to a new city, starting a business, or even getting married and starting a family. These are big decisions, and they often come with corresponding price tags. It’s hard to plan perfectly, especially during uncertain times, but knowing your financial baseline can help you make more informed choices.
If you’re considering going back to school, financial planning for college should include how you’ll cover tuition, housing and lost income while you’re attending classes. Run the numbers to determine the potential short-term costs of the decision and see how it could impact your day-to-day budget. Sometimes, that means delaying a move, starting part-time or building up savings first.
Financial planning in your 20s doesn’t have to be perfect. It’s just about starting. The habits you build now can help you stay flexible, avoid unnecessary stress and create a financial foundation for whatever comes next.
Financial planning helps young adults build a stable foundation despite challenges like rising living costs, student loans and uncertain job markets. It allows you to take small, intentional steps toward long-term confidence and independence.
Start by determining your monthly income and expenses. If you’re between jobs, estimate based on part-time work or side gigs. Knowing your numbers, even if they’re small, can help set short-term goals and prevent debt while you gain financial footing.
Focus on monitoring your finances early to avoid overspending. Set up small habits like:
Make a list of what you owe, including interest rates and due dates. Create a plan to pay down high-interest or urgent debt and explore payment plans if needed to better manage your finances.
If you lack a credit history:
Building good credit helps when applying for loans or renting properties in the future.
Starting early takes advantage of compound interest. For example, saving $50 per week starting at 22 could grow to nearly $600,000 by 65. Delay until 32, and the total drops to less than half. Use opportunities like 401(k) employer matches or open IRAs for long-term growth.
To avoid unexpected costs, break large expenses (like a $1,200 apartment deposit) into smaller monthly savings goals. For instance, saving $50 weekly for six months can help you build the required amount without turning to credit or loans.
It doesn’t have to be perfect. Start small, build helpful habits, and create a flexible financial foundation for future goals.
a good start
From savings products to insurance and more, AAA can help you simplify your finances and be more confident about your money when you’re on your own for the first time.
4 Steps to Creating a Monthly Budget You Can Actually Stick To
Guide to Saving for an Emergency Fund
Everything New College Grads Need to Know About Insurance
How to Save Money to Pay Off Debt
Will These Financial Decisions Improve Your Credit Score?
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
