How to Tell You've Become a Financial Grownup

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When I was 22 years old, I thought I had it all figured out. I had landed a job, leased an apartment, and even opened a savings account, all while living 400 miles away from my parents.

Of course, feeling like I had achieved financial adulthood did not stop me from some immature money moves — like asking my parents for money when I couldn't pay my bills, carrying credit card debt, and neglecting to save for retirement. Just because I felt like a financial grownup did not mean I had actually become one.

It can be hard to tell if you have reached financial maturity. But financial grownups all tend to do the following five things.

Understand that the time to save is now

We all fall into the trap of believing that it will be easier to save money tomorrow. By then, the credit card will be paid off, that raise will finally come, and it will be much easier to find money to funnel into savings or a retirement fund.

It takes a certain level of maturity to recognize that the "right time" to save money will never come, and that you need to be putting money away right now. Waiting for a perfect moment to start saving is a good way to never save at all.

You've reached financial adulthood if you make saving an important part of your monthly money management, without telling yourself you'll do it "later."

Know how much money is coming in and going out each month

Budgeting tends to be a four-letter word among most Americans, which helps explain why only one in three Americans actually prepares a detailed household budget, according to a 2013 Gallup poll.

But just because you don't have a formal budget doesn't mean you're not doing the necessary work. All any budget does is keep track of how much money you have coming in, and how much of (and where) your money is flowing out. Whether you maintain a color-coded spreadsheet tracking the progress of every penny, or you have found a productive way to manage your money without creating a formal budget, you are doing the necessary work of budgeting as a financial grownup.

Because no matter how you accomplish the tracking of your income and outflow, the important thing is knowing where you stand financially so you can live beneath your means — which is the entire point of crafting and adhering to a budget.

Know exactly how to pay for an emergency

Before you've reached financial adulthood, money emergencies feel overwhelming and nearly impossible to deal with. If you are lucky enough to have parents who can help out, you might make a withdrawal from the Bank of Mom and Dad to pay for your emergency. Otherwise, you might find yourself using credit to solve the problem, selling or pawning something to raise money, or even visiting a payday lender to get out of your financial pickle.

An important part of being a financial grownup is recognizing that emergencies are an inevitable part of your financial life, and so is planning ahead for them. In most cases, that means you've set aside money in an emergency fund. However, there are other ways to prepare for an emergency — such as knowing exactly what you can trim from your budget, what items you could sell quickly to raise money, or what side hustles you could take on to raise funds.

Even if you are not currently in a financial position to have a comfortable emergency fund, you can still prove your financial grownup bona fides by having an actionable and responsible plan in place for a financial emergency. (See also: A Step-by-Step Guide to Creating Your Emergency Fund)

Understand the difference between wants and needs

Distinguishing between something you truly need and something you merely want can be remarkably difficult. This is especially true when something you need (like transportation or clothing) could be nicer, more comfortable, newer than the most basic level. In that case, it's possible to convince yourself that you "need" the nicer version. For instance, the old beater car that will reliably get you to work may be all you actually need, but it's very easy to tell yourself that you "need" a nice car in order to do well in your career.

The first step toward financial maturity is simply recognizing the difference between wants and needs and curbing the impulse to buy things just because you want them. True financial grownups are also able to determine when they are imposing their wants onto their needs. They will recognize that meeting their needs is not an opportunity to indulge their wants. They know that needing new professional clothes does not mean they "need" those clothes to follow the latest fashion trends.

Know the buck stops with you for financial decisions

It takes a level of money maturity to recognize when you need to consult with a financial professional. Understanding when you need advice from a pro — whether that's a financial planner, a mortgage broker, an accountant, or an insurance professional — is a big step in reaching financial maturity.

But there is a further step that you must take to become a full financial grownup — keeping your own counsel.

Asking for advice from a financial professional is a good idea, but blindly following that advice is not. To begin with, the professional's agenda may not be good for your bottom line. For instance, your mortgage broker may tell you that you can "afford" much more house than you plan on buying, because a bank's definition of affordable is the highest possible loan payments you could possibly pay, based on your income, assets, and debt, rather than the amount you can responsibly afford.

In addition, no matter how good an expert may be, he or she does not have to live with your money decisions. You have the ultimate responsibility to understand and decide what is happening with your money, and embracing that responsibility is one of the hallmarks of financial maturity.

Welcome to adulthood!

Despite what we might have thought when we were kids, being a financial grownup is not about being able to order pizza for dinner every night and buying whatever you want. The true mark of financial adulthood is accepting that you will be the one dealing with the consequences of your money choices, and making the best choices for your own future financial stability.

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