The Moment I Became a Money Grown-Up

llustration of stacked coins and calculator in human brain
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Have you hit financial adulthood yet? Unlike becoming a legal adult, this version of “adulting” doesn’t necessarily come at a certain age. In fact, both the question’s meaning and answer can be — and probably will be — different for just about everyone.

“Your financial grown-up moment is when you realize money is going to define your life, whether you want it to or not,” says Bobbi Rebell, author of the new book “How to be a Financial Grown Up.” “[Money] overshadows everything from family relationships to career choices — and pretty much every major life decision can be defined by how you approach money and your finances.”

Rebell’s book takes you through the moments and advice from 30 business leaders, including Tony Robbins, Ivanka Trump, Kevin O’Leary of “Shark Tank” and designer Cynthia Rowley. Her own defining moment came at 23, when she purchased real estate in New York. “I figured out the math, I figured I could afford it and that it was better than renting,” says Rebell. 

Inspired by her book, we asked some millennial personal finance bloggers and authors what their defining moments were. From paying taxes to figuring out health insurance, here are their first moments of “financial adulthood.”

When Uncle Sam Pulls Your Head Out of the Sand

Garrett Philbin, 30 (Be Awesome, Not Broke

Philbin’s moment came when he realized what self-employment taxes were and how he needed to prepare in advance. “I was aware that I had to put something away,” he says. “I was making $30,000, couldn’t afford it and figured it would be OK — call it willful ignorance — so I didn’t look into it.” Come tax time — after his first year on the job — Uncle Sam sent him a bill for $3,500.

 “It was my holy-crap moment with the adult realizations: taxes don’t magically go away, and only by facing the fear could I kick the ass of ignorance.” 

He learned to live on less and started saving the requisite one-third of his income for the following year. “You'll almost always get money back at the end of the year and will have actually learned to live within your means rather than fooling yourself into thinking you have more money than you do," he says.

When a Tooth Can Cost You Two Months’ Rent

Stefanie O’Connell, 30

“All those childhood years of lying to my parents about having brushed my teeth before bed came back to haunt me in my early 20s,” says O’Connell. Eventually, she found herself in the dentist chair with an old cavity — which turned into a root canal, an extraction, and an implant. Except, this time, she wasn’t on her parent’s health insurance plan and she didn’t have dental coverage. The bill: $2,000.

That was the moment she realized the importance of emergency savings. “You know you’re officially adulting when a healthy savings account and the avoidance of high-interest debt becomes sexier than life’s luxuries,” she says. She suggests treating your emergency fund contributions like your rent or utility bills: a non-negotiable you pay at the start of each month.

When You Think About Tomorrow 

Erin Lowry, 27 (Broke Millennial)

Lowry’s moment came when she rolled over a 401(k) from an old employer into an IRA. “[It was the first time I was] proactive about taking control over my money and ensuring I knew exactly where everything was housed, instead of just hoping I remembered how to get my hands on that old 401(k) in a few decades,” says Lowry.

When you leave a job, Lowry says, it’s time to explore your options. Some employers will allow you to keep the account with them (sometimes there’s a $5,000 minimum). Otherwise, you're required to move it. 

And before you give notice, check into whether you actually get to walk with your employer contributions. “Some employers may have used a graded or cliff vesting schedule — which means you only get to take some, or maybe none, of the employer contributions depending on how long you've been with the company.”

When You Get Some Advice

Tonya Rapley, 32 (My Fab Finance)

Many people grow up by moving away from the advice of others.

Rapley moved toward it. In 2013, she hired a financial advisor (with whom she still works to this day). “My financial grownup moment came when I received my first statement from my financial advisor for my investment accounts,” she says. “Meeting with an advisor is awesome, but the oh-my-gosh moment of ‘I invested in these companies, and I get to see how they’re performing’ really did it.”

She says investing is different from the budgeting and credit conversations. “I’d define financial adulthood by doing the things that are good for you — choosing to do them versus being forced to do them.” 

When You Take Control of Your Spending

Chelsea Fagan (The Financial Diet)

“Until the age of about 23, I lived my entire financial life as if I was going to either die tomorrow or become impossibly rich — I never planned ahead, saved, or paid off my bills unless I absolutely had to,” she says. Fagan’s moment came when she finally paid off her defaulted credit card that tanked her credit score.

She got her payments underway after receiving a paycheck from a big work project, but instead of treating herself, she took a portion of the check and put it toward the debt. “It was the single act that put me on the road to doing so many other healthy, productive things with my money, and actually made me enjoy the feeling of saving, bill-paying, and generally doing the right thing.”

When Your Cash-Cow Condo Almost Backfires

Tess Wicks, 25

Wicks bought a rental property when she was 23, which, she says, should’ve been her big grown up moment, but it wasn’t. That came the next week, when the people downstairs broke the news that one of Wicks’ bathrooms was flooding their apartment.” Her homeowner’s insurance didn’t cover damages to other people’s places and the tenants didn’t want to report the damages to their insurance either, so Wicks had to pay for the plumber, the contractor and the part. In that moment it hit her: “I was a landlord.”

For those looking to become young real estate owners themselves, Wicks says, “It may be tempting to put as much into your down payment as possible, but make sure you leave enough in your emergency savings account for these truly expensive emergency situations.”

How much? “Shoot for $5,000. That may seem like a lot, but home repairs are some of the most expensive and most common ‘emergencies’ you'll pay for.”

When You Transfer Out of the Bank of Mom and Dad

Zina Kumok, 28

“[It was when] I got my first job out of college and I suddenly had to pay for everything myself,” says Kumok. “I had to put down a security deposit, pay my rent and when my car needed an oil change, that’s when it really hit me.” Plus, her grace period ended a month later, so she had to start making her student loan payments. It was then she revisited the idea of a budget.

“I knew the basics: save for retirement, invest, avoid debt — but I never needed to put that knowledge into practice,” she says. Kumok had tried budgeting a little bit in college, but it didn’t stick. But she realized that in order to pay off her student loans early, she had to change her spending habits. She did, and now she’s known for paying off her $28,000 worth of student loans in three years. In addition to budgeting, “I'd also recommend paying at least a little extra toward your student loans, even an extra $10 or $25. Every pay raise, take that money and put it toward your loans. Those incremental changes will help you pay off your loans faster.”

With Kelly Hultgren