Experts: The Money Habits Everyone Under 35 Should Rethink Today
For many people under 35, a growing paycheck doesn't automatically lead to growing wealth. Despite earning more, younger adults often find themselves financially stuck — not because of one catastrophic mistake, but because of subtle, normalized habits that quietly erode their financial potential.
From lifestyle creep to social media pressure, the patterns that hold people back tend to feel completely reasonable in the moment. But financial planners warn that these small habits can wreak havoc on your finances if left unchecked.
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Treating Every Raise Like Permission To Spend More
One of the most common financial traps younger adults fall into is lifestyle inflation.
Christopher Stroup, a certified financial planner (CFP) and owner of Silicon Beach Financial, said he sees people under 35 “treating higher income as permission for higher spending instead of higher investing.” He explained that many younger professionals earn strong salaries early, “but without a plan, lifestyle creep, travel, dining and expensive housing absorb every raise.”
Stroup doesn’t suggest that they should avoid lifestyle improvements entirely, but “[make] sure savings and investments grow alongside income increases.”
Overspending On Vehicle and Transportation Costs
Vehicle and transportations costs are other areas where overspending has become normalized, according to Brian Rellihan, a CFP and senior financial advisor at Wise Wealth Partners.
“With the average new vehicle now costing more than $48,000, many households are experiencing total monthly transportation costs approaching $1,000 once loan payments, insurance, registration, and maintenance are included,” he said. “For many consumers, the cost of a vehicle is beginning to rival a mortgage payment.”
Delaying Investing and Retirement Savings
Retirement can feel abstract to people in their 20s and early 30s, but delaying investing can have major long-term consequences, Stroup warned, in the form of delayed compounding.
“Younger adults underestimate how valuable time is when it comes to compounding wealth,” he said.
According to Stroup, missing even five to 10 years of consistent retirement contributions can significantly reduce future financial flexibility and long-term wealth accumulation.
He said the younger clients who make the most progress financially are the ones who automate retirement contributions early and increase savings percentages every time their income rises instead of waiting for a future milestone.
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Carrying Debt That Limits Financial Freedom
Younger adults also often underestimate how much debt affects their ability to build wealth and maintain flexibility.
Stroup pointed to high-interest credit card balances, large car payments and unmanaged student loans as key culprits. These curtail younger adults’ ability “to build emergency savings, invest consistently or take calculated career risks,” he said.
Rellihan also suggested younger adults rethink assumptions about major purchases and “carefully evaluate whether renting or buying a home makes the most financial sense in today’s market,” he said. “Traditionally, I’ve leaned toward homeownership, but with mortgage rates remaining elevated and home prices still historically high, renting may currently offer better overall value for some households.”
Letting Social Media Shape Financial Decisions
Social media has intensified pressure to appear successful financially, even when the reality behind those lifestyles is unclear.
“Social media has normalized performative spending.”
He explained that younger adults “constantly see curated versions of luxury lifestyles, entrepreneurship success stories and expensive experiences without seeing the financial reality underneath.”
That creates pressure to spend for appearances rather than long-term stability. He added that “one of the healthiest habits is learning to separate financial decisions from social validation and comparison.”
Avoiding Financial Planning Until There’s a Problem
Another major issue is financial avoidance, such as ignoring bank statements or postponing tax planning.
Stroup said this can look like “avoiding financial organization until a crisis forces attention.” He added that warning signs of financial trouble include “consistently carrying credit card balances, having no emergency reserve and living paycheck-to-paycheck despite a high income.”
According to Stroup, "Wealth building is usually less about making perfect financial decisions and more about creating systems that encourage steady, repeatable habits over decades.”
His advice for younger adults is to automate retirement contributions, investment deposits and emergency savings so financial progress happens consistently rather than relying on motivation alone.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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