The Median Net Worth Of People Under 35 Is $11K. Here Are 6 Tips For Building Wealth That Anyone Can Do

By Luna Salinas
·  11 min read
The Median Net Worth Of People Under 35 Is $11K. Here Are 5 Tips For Building Wealth

Money can’t buy you happiness or love.

But studies show that overall happiness increases with income level. What does this mean for Americans 35 and younger with a median net worth of $11,000? What can we teach and do differently to increase the median value? 

The American public school system certainly isn’t doing anyone any favors, as a study by the Champlain College reports that adults in more than half the states have a “C+” grade or worse in financial literacy. Until more states issue requirements to take courses in personal finance, we need to take it upon ourselves to learn — and teach others — about the best ways to build and keep wealth as early in life as possible. 

Whether you’re fresh out of high school, fresh out of college, or at any point in life, the five tips below will help you form habits to build — and keep — wealth. 

1. Avoid Unnecessary Debt 

The average credit card debt for an American in their 20s is $2,709. The reason for having so much debt at an early age can be due to a lot of factors, such as being given a credit card in your teenage years, and then seeing the credit card as an “endless” source of cash, rather than seeing it as money you will have to pay later. Consumerist culture can lead to individuals buying things they can’t afford, and thinking it’s okay because they can just pay it back later. 

Make it a habit to pay off your credit card debt, in full, at the end of every billing cycle. 

Having credit and building it is important. It’s what lets you take out a loan, such as for a home or car, and you may not even be able to even get an apartment without it. One way to do it is with a credit card, but you have to be wary about how much you’re charging to your card and how much debt you’re accumulating. 

Make it a habit to pay off your credit card debt, in full, at the end of every billing cycle. Additionally, keep credit cards to a minimum (ideally no more than two), and be aware of the terms and conditions that go with them!

2. Live within Your Means 

According to a Gallup report in 2013, “nearly one in three Americans” prepare and keep a monthly budget that tracks their income and expenses, and a 2018 Survey of Household Economics and Decisionmaking revealed that “one-third of middle-income adults said that they would borrow money, sell something, or not be able to pay an unexpected $400 expense.” 

One way to ensure that you can handle a surprise expense (such as a doctor’s fee, necessary car repair, home emergency, etc.) is to make a budget and stick to it. Take into account how much you get paid every pay period, whether that be bi-weekly, monthly, or every week. 

Next, calculate how much needs to go into rent, utilities, and any payments that need to be made every month on time, such as a car payment, phone bill, or credit card debt. With what’s left over, determine how much needs to go into groceries (on average, it’s almost five times more expensive to order delivery from a restaurant than it is to cook at home). 

It’s almost five times more expensive to order delivery from a restaurant than to cook at home.

If you’re new to cooking at home, start by looking up three lunch and dinner recipes that you can make every week for yourself and buy the ingredients necessary. Look up the prices at local grocery stores in your area, and determine where the best place to buy them would be. Keep in mind you can collect coupons or take advantage of sales to get more bang for your buck. Additionally, it may help to look up how much you should spend on groceries (it will vary depending on where you live) and try to stay under that amount. 

Once you’ve accounted for your required expenses, analyze your situation. Are you living such that you have nothing left over, after taking care of the basics? If so, it may be worthwhile to see how you can make changes in your life to allow for more money at the end of the month, so that you can save, pay for miscellaneous items, or be able to handle a surprise $400 expense. If you live alone in an expensive apartment, consider moving into a smaller or cheaper apartment, or get a roommate or two. If you’re near family you can live with, it may be worth it to move in with them. 

If you have a phone you pay for every month on a contract, consider switching to a cheaper smartphone that you pay for once. As an example, as of this writing, you can buy the latest Samsung Galaxy phone on a contract where you pay $58.33 per month, for 24 months, or you can buy a smartphone for under $100 that you only pay for once, getting rid of a monthly phone payment.

If you live alone in an expensive apartment, consider moving or get a roommate or two. 

Living by a budget and sticking to it is the first step to analyzing where you can make changes in your life to improve your financial situation. Having more money left over at the end of the month allows you to invest in your present self, and in your future self, which leads us to the next point. 

3. Save, Save, Save 

We saw before that one-third of middle-income adults couldn’t easily afford a surprise $400 bill. Assuming that someone forgoes paying it, it can cause them to spiral into having to pay even more at a later date, thus beginning a cycle of financial setback. 

The best way to avoid this is to save your money. Some people follow the 50-30-20 rule. It goes like this: you put 50% of your monthly income towards necessities (i.e. rent, food, utilities), 30% towards miscellaneous items, and 20% towards your savings. 20% of your monthly expenses is definitely a good starting goal to put toward your savings; saving more is better for meeting savings goals faster, but starting with any percentage that you’re able to is always better than putting nothing towards savings. 

Financial experts recommend saving at least three month’s worth of expenses.

Financial experts recommend saving at least three month’s worth of expenses (this is where the budget you made in tip #1 comes in), although ideally, you should have six month’s worth, and if the pandemic has given us any insight, it’s even better to have a year’s worth. If you’re new to saving, there’s nothing wrong with setting small goals first. 

Check in with your local bank, or even an online bank, and investigate what options you have for opening a savings account. You can even check online for which banks offer accounts with the highest Annual Percentage Yield (APY) which means more money paid to that account every month in interest, translating to an extra boost when meeting your savings goals. 

Once you’ve met your first savings goal, make another one. Go from one month’s worth of expenses to two, three, six, nine. Make a goal of saving for a down payment for a home. 

4. Look into Buying a House 

One way to build wealth is to buy a house. It may take some time to save for a down payment, but there are options other than the traditional “20%-on-a-down-payment” conventional loan. There are different kinds of loans that may benefit you if, say, you’re buying a home in a more rural or suburban area (USDA loan), or if you’re a veteran (VA loan). Another kind of loan, the FHA, is backed by the government, and it allows you to put less money towards a down payment, which may be helpful if you’re a first-time homebuyer.

Your home’s value can increase over time, thus increasing your net worth. 

The advantage of buying a house over renting is that every time you make a mortgage payment that money is going towards something that will eventually be yours, unlike with an apartment, where you’re paying your landlord for a service. Additionally, your home’s value can increase over time, as we’ve seen in the past year. If you buy a home today, assuming that the nearby area continues to grow and prosper, your home’s value in 10 years will increase, thus increasing your net worth. 

5. Get Creative about Saving 

It’s one thing to see where you can cut costs when analyzing where your money goes every month, but it’s another thing to get creative and see where you can indulge in fun activities without breaking the bank. For instance, you can check out local consignment shops or thrift stores for cheaper seasonal home decor or a new wardrobe. 

You also don’t have to sacrifice going on dates just because you’re trying to save money. Suggest cheaper activities such as cooking together instead of eating out, painting or drawing together, taking a walk or a hike outside, or checking out a local bookstore or library together and picking a book out for each other. These activities can even lead to more intimate conversations and getting to know each other better! 

6. Consider Alternative Ways of Investing in Your Future 

Traditionally, it’s been encouraged to get a college degree after graduating high school. However, student loan debt is one of the highest sources of debt in the U.S., at $1.4 trillion as of 2019. One way to maximize your personal wealth is to avoid debt where possible, and that extends into higher education and investing in your future as well. 

It’s okay to not go to college. It isn’t for everyone. You can find many anecdotal pieces online detailing why the author regrets having gone to college. Additionally, many successful people didn't go to college (notably Bill Gates and Steve Jobs). 

You can minimize the expense by going to community college to knock out basic required classes. 

Analyze what you want your career path to look like. Paths such as medicine, law, or academic research do require a college degree. While these paths will tend to be expensive in the short-term, you can minimize the expense by going to community college for a semester or two to knock out basic required classes. Then, see about attending a local college until you need to relocate for a better internship or shadowing opportunities later on. Attending a local college and living at home, or with roommates, will also help to minimize financial strife during this time. 

However, if you want to go into something else, such as coding or web development, you can teach yourself with the help of online courses, videos, or tutorials. Additionally, it shows a lot of initiative and gumption to a potential employer if you’re able to demonstrate applications or programs that you made on your own, by your own volition. 

Other paths, such as the creative arts, don’t require a college degree. If you want to be a writer, a journalist, or anything of that sort, write, anything and everything you want, and submit to every publisher you can. If you want to be an animator, illustrator, painter, do those things. You can, like coding, find a lot of resources online to improve and practice. Search for opportunities to showcase your work, and every successful submission is something that you’ll be able to put on your resume or portfolio, which can increase your chances of working in an animation studio or for a well-known publisher. 

If you want to be a journalist, write. If you want to be an animator or illustrator, do those things. 

If you don’t know what you want to do, that’s okay too! Trade schools are an option that not many American youths tend to consider, but there are benefits to them that make them a better option than college, especially if you’re not sure what your path looks like yet. If nothing else, you can get a trade school certification, work in that field for a little while to improve your financial situation, and in the meantime, search for what it is you do want to do. Ultimately, living your life and growing up helps the most in giving you insight into what you want your life to look like. 

Closing Thoughts 

The American public school system isn’t doing enough to help children develop into adults who are financially literate, with the tools and knowledge of how to build wealth for themselves. No one is saying that building wealth is an easy thing to do. In fact, it’s often a journey with very low points and considerable struggle. However, it’s very much worth it and will benefit your future self immensely.

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