Financial Adulthood: What It Is & How It’s Changed

Financial adulthood. It’s a term that’s been circulating the internet for a while now. But what does it mean? What does it mean to be an adult in the financial sense? And how has our definition of financial adulthood changed from one generation to the next?

“Financial adulthood can come at any age,” says financial planner Sophia Bera, founder of Gen Y Planning. “It’s being comfortable talking about and taking ownership of your money. Instead of just letting your financial situation happen to you, you’re using your money to match your values and live your dream.”

Still, our societal notion of financial adulthood has changed. Let’s explore the concept of financial adulthood and what has changed in terms of how we define what makes a financially mature human.

What is financial adulthood?

Of course, financial adulthood is a loose term that will have a different definition for each person. Yet, some accomplishments that signal a person is well-developed in terms of financial responsibility. Here are a few:

  • You have a debit and credit card and pay your credit card bills on time.
  • You have a good credit score and keep track of its changes.
  • You have insurance.
  • You have a budget and spend less than you earn.
  • You’ve paid off debt or are actively working towards paying it off.
  • You have a savings account and an emergency fund.
  • You are saving for retirement.
  • You have financial goals and are actively working towards them.

How our definition of financial adulthood has changed

The milestones that made one an adult used to be pretty clear-cut. The notion of adulthood looked like a full-time job, a house, a car, a spouse, and a baby or two. All of this was expected to be achieved by or around age thirty. Back in the 80s, when the show Thirtysomething was released, that was all pretty attainable.

But things have changed. These days, it’s less common for young adults to attain all of these milestones (financial, personal, and career) within the time frame of previous generations. Why that is is a complicated question, but there’s no doubt something has changed.

Younger generations are less financially independent than ever before 

Cornerstones of adulthood are increasingly being put on the back-burner, including marriage, kids, home ownership, and financial adulthood. But that’s probably not because the younger generations have “Peter Pan syndrome.” 

More likely, it is because of financial stress. NerdWallet reports that “The median net worth of millennial households was $12,500 in 2016 compared with $20,700 for baby boomers of the same age in 1983.” This disparity could be because of today’s higher cost of living and higher rates of student debt.

Twenty and thirty-somethings are less financially independent than ever before. This financial strain was present even before the pandemic set in. Millennials and Gen-Z are also less interested in achieving the traditional milestones of adulthood early on (or at all), instead forging their own paths and defining financial adulthood in their own terms.