You might have graduated from high school—and maybe even college. You probably don’t live with your parents anymore. You might be married or have your own children. But are you really an adult? Financially, that is?
Here’s how you’ll know if you’re a grown-up, when it comes to money. If you can’t answer “yes” to the following five questions, you might not have achieved financial adulthood.
1. Do you have a checking account? Having a checking account is a pretty basic need of adults. Without one, you can’t write checks to pay bills, cash checks, get money from an ATM, or have paychecks direct deposited to your account. The first thing many people do when they get a job or leave home is open a checking account. It’s pretty essential to have one. There is an alternative, however. These days, you can have a prepaid account instead of, or in addition to, your checking account. This can be a prepaid card or a digital account. These types of accounts are increasingly popular, and you can do pretty much anything you can do with a traditional checking account. That includes getting checks direct deposited, taking money out of an ATM, and paying bills.
2. Do you have a savings account? If not, why not? It’s essential to have some savings for a rainy day. It’s easy to open a savings account at the same bank where you have your checking account, and even link the two so it’s easy to transfer money to savings. Put aside 10% of your paycheck every time you get paid, and you’ll be on the road to financial maturity.
3. Do you have a credit card? Although some people used to say that credit cards were a temptation to get into debt and overspend, nowadays pretty much everyone realizes how essential they are. You need to have one in order to rent a car, reserve a hotel room, and lots of other things. Get one with great perks and rewards, and you’ll wonder how you ever lived without it. Just be sure to keep your spending in check and pay off the balance in full each month. It’s the grown-up thing to do.
4. Do you have a retirement plan? No one wants to keep working forever. And the younger you are when you begin to plan, the better. Putting money away for retirement sooner than later can only benefit you down the road. Don’t be afraid to think about retirement. It’s a fact of life, if you’re lucky enough to live that long. Show your future self some love and put a plan in place for the future.
5. Do you know your credit score? Adults ought to know whether their credit is good, great, or not so great. FICO scores are free from many card issuers now, so there’s really no excuse not to know your score. If it isn’t great, get to work. Pay down your balances, make payments on time, keep those balances to 30% or less than your available credit, don’t take out too much new credit, and have a healthy mix of credit types. Your score will thank you.
So, did you answer “yes” to all five? If so, congratulations. You’re a financial grown-up!