For someone who’s waited excitedly to be autonomous and independent, there’s likely nothing quite like the feeling of finally becoming an adult. This period is filled with opportunities for personal growth, from earning one’s first paycheck to making important decisions about the future. But the freedom and excitement of adulthood come with demanding new responsibilities, too, including managing finances and paying bills. Tasks like paying for your utilities and applying for loans to be used for a future vehicle, home, or other purpose will now fall squarely on your shoulders.
This transition into adulthood is often colloquially referred to as “adulting,” which goes beyond reaching a certain age. Adulting also means learning to navigate the different complexities of everyday life, taking charge of your responsibilities, and making decisions that will affect your financial and personal well-being (as well as the lives of your loved ones down the line).
Adulting may seem scary to someone who’s just entered this phase, but if you play your cards right—especially with regard to your finances—you’ll be able to break a lot of ground in your journey toward self-discovery and empowerment. Here are some practical tips to help you thrive in this new chapter in your life:
1) Ensure On-Time Bills Payment
One of the first responsibilities you’ll face as you enter adulthood is paying your own bills. These can include rent, utilities, internet, and mobile plans, among others. To avoid service disruptions and penalties, which can eat into both your budget and your ability to do day-to-day activities like working from home, be sure to make your bill payments on time.
Find the easiest way to pay your bills, and track your monthly obligations based on a structured payment schedule. You can also use e-wallet or digital banking apps, like Maya, for seamless online bills payment to multiple billers in the Philippines. With Maya, you’ll be able to pay for utilities like electricity and water, your telco bills, and more with just a few taps on your smartphone. You can also use an app like Maya to set reminders, view your payment history, and manage multiple bills in one place, making it easier to stay organized and updated about your bills.
It would also be good to develop a payment strategy that works for your financial situation. For example, you might choose to pay your bills right after you receive your paycheck. This way, you can allocate a portion of your income to bills before spending on non-essentials. Another approach is to designate a specific day each month for bill payments, ensuring that you dedicate time solely to this task.
2) Learn to Budget
Budgeting is a fundamental skill that every adult should master. To get started, list your monthly income and categorize your expenses into fixed costs, like rent and utilities, and discretionary spending, such as eating out or shopping. Analyze how much money goes to these expenses and compare the amounts you arrive at with how much you’re earning. Be sure to balance them and make adjustments to ensure you’re not spending more than you’re earning.
A useful tip is to follow the 50/30/20 rule for budgeting. This involves allocating 50% of your income to needs or fixed expenses, 30% to wants (also known as variable expenses), and 20% to savings or debt repayment. This simple structure helps you maintain a healthy balance between enjoying your earnings and preparing for the future.
3) Build an Emergency Fund Early On
Life is unpredictable, and unexpected expenses like medical emergencies, car repairs, or sudden job loss can arise at any time. This is a truth you have to accept early on as an adult, and something you should respond to by building an emergency fund early on.
Set aside a portion of your income each month until you have enough to cover three to six months’ worth of living expenses. Having this safety net will give you peace of mind, knowing you can handle any financial surprises that come your way as a full-fledged adult.
4) Be Wise about Managing Your Credit Cards
While credit cards are useful financial tools if used responsibly, they can lead to debt if not managed properly. As an adult, commit to learning and practicing good money management habits when it comes to your credit card. Before all else, choose a credit card that actually aligns with your financial needs. Look for a beginner-friendly credit card that has low interest rates, no annual fees, and rewards programs that fit your lifestyle, with perks like cashback on groceries. Be sure to explore your options and assess which card offers the best benefits based on how you plan to use it.
To avoid high interest charges, always aim to pay off your balance in full each month, given that carrying a balance can lead to expensive interest fees and increase your debt over time. Avoid using your credit card for non-essential purchases, and stick to using it for planned expenses. In addition, keep your credit usage low to help maintain a good credit score, which is essential for future financial decisions like applying for loans or other credit cards.
5) Learn Exhaustively about Loan Apps and Personal Loans
You may have grown up anxious about the idea of borrowing money through a loan, but they can actually be quite helpful for covering significant expenses or emergencies. All the same, it’s important to approach borrowing with caution and responsibility.
In your pursuit of a good loan program, you can explore loan apps for their quick and easy access to credit. Before applying for a loan on any of these, however, you’ll want to read the fine print and fully understand the terms and conditions, including interest rates, fees, and penalties for late payments. Knowing these details will help you make a good call about where to borrow money and how much, thus ensuring that you won’t end up with a loan you cannot manage.
Moreover, borrow only what you can afford to repay within the loan’s terms. Make sure to also set up a clear repayment plan before you take out a loan so that you can remain on track with your finances. Missing any payments can incur interest and negatively impact your credit score, which can make it harder to access credit in the future. This is very important when you want to apply for bigger loans like a car or home financing later on.
Adulting doesn’t have to be as scary a prospect as you might initially think. Habits like these will do a lot to set you up for long-term financial success for the rest of your adult years. Learn to be proactive about managing your finances and responsibilities, and soon enough, “adulting” for these matters will become like second nature to you.
