Teaching Financial Literacy to Young Adults in the Digital Age

Establishing financial literacy in young adults is key to helping them save, receive credit and stay out of debt. Young people today can master their finances using traditional money management methods and modern digital tools.

A generational divide can come into play when adults teach personal finance to those in their early to mid-twenties, with some adults preferring traditional methods while many young people prefer digital apps. But with the right mindset and knowledge of resources, parents and teachers can help young people learn to manage their money in the way that works best for them.

Budgeting in the past

Today, members of the younger generations are coming of age at a time when online banking and other digital money management tools are well established. Old-fashioned money management methods that were established before the digital age involved using cash, writing checks, and paying bills through the mail.

cash was king

Using cash for everyday expenses was commonplace before debit and credit cards came along – and while it might not have been as convenient as paying with plastic, it was a way sure to avoid overspending.

A decades-old method of budgeting called the envelope method involves allocating money into labeled envelopes for each of your monthly expenses. Once an envelope is empty, you should stop spending money on that category until the next month. (Digital versions of this concept are now available with tools like Mvelopes and Goodbudget.)

Bank branches were essential

Consumers visited bank branches more frequently before the inception of online banking, as going to the bank was often the primary means of making deposits and withdrawals. Passbook savings accounts were commonplace, for which account holders presented a small ledger to the bank teller, who recorded transaction details inside.

Account holders present this booklet when making deposits and withdrawals, and the cashier records transaction details inside, including your current balance, Kilmer says.

Consumers wrote more checks

Before the introduction of online bill payment and digital payment methods like Zelle and Venmo, bills were paid in cash or by check. Bill statements arrived in the mail, and consumers wrote a check and returned it in the envelope provided after postage stamping it. Invoices that were typically paid this way include:

  • Credit card
  • Mortgage
  • Utilities
  • Doctor’s bills
  • Newspaper or magazine subscriptions
  • Gym memberships

Manually balancing a checkbook was necessary before the advent of online banking and budgeting apps, in order to track the account balance and ensure that checks don’t bounce.

Balancing a checkbook involves keeping a log in the book’s check register of what is going out and what is coming in. Each time you record a transaction, you add or subtract that amount from the total balance and record the new balance total. Regular transaction monitoring helps ensure that you know how much you can spend and that you have enough money in the account to cover the purchases you intend to make.

Importance of Manual Finance Tracking

Failing to manually track your pre-digital finances could result in negative account balances and overdraft fees, all without real-time notification via email, text, or app alert.

Today, managing personal finances may require less manual labor for anyone using digital resources. Staying in good financial shape, however, can still involve things like monitoring your account balance and paying attention to your spending.

Budgeting in the digital age

Today, digital tools eliminate much of the money management effort, as consumers can log into an app or bank account to check a real-time balance, automate bill payments and more. .

Money tracking takes less work

Being able to log into your bank account to see statements and a detailed purchase history can help you track a budget without having to maintain a spreadsheet or keep a written record of how you spent your money.

Features available today on many banks’ websites and mobile apps include:

  • Automated bill payment
  • Automatic check-to-savings transfers
  • Real-time alerts of low balances, large purchases or overdrafts
  • An analysis of your income, expenses and spending habits
  • Categorization of purchases, which can help with budgeting

Other features provided by some banks include an automatically generated score of your financial health — separate from a credit score — and advance direct deposit of your paycheck.

However, living in an automated and cashless society comes with some of its own challenges.

The Challenges of Managing Digital Money

Digital tools have made it easier to manage personal finances, but they could also allow spending to spiral out of control. Some consumers may be more likely to overspend with a debit card than using cash, for example. And a tool like automated bill payment can end up hurting your finances if you keep paying for subscriptions or services you no longer use.

The advent of multiple payment methods could also increase the risks of overspending. For example, if you owe money to multiple credit cards and buy-it-now-pay-later services, it can be difficult to track the total you owe and whether you can pay it all back on time.

Although it’s no longer necessary to balance a checkbook, the time spent managing your money is still essential for financial health.

Why budgeting is still important for young adults

It may be easier to manage your money today than it has been in decades past, but some budgeting work is still needed to achieve financial goals such as buying a home, building an emergency fund and saving for retirement.

The key elements of traditional budgeting still apply today. The process involves categorizing your monthly expenses, such as:

  • Lodging
  • Food
  • Transportation
  • Utilities
  • Entertainment
  • Savings

Looking at how much you spend in each category can help you find ways to reduce your expenses so you can save more money and reach your financial goals faster. Paying close attention to expenses can also help you spot bank or credit card errors or overcharges.

Young adults can have the best of both worlds by combining traditional money management techniques – such as budgeting – with modern digital tools that can simplify your finances.

Budgeting and Financial Accountability Tools for Young Adults

There are a variety of tools that can be useful for young adults looking to get their budget and finances under control by tracking expenses, generating reports, and more.

Online banking tools

Visiting a bank branch can be a thing of the past when you can perform transactions on the bank’s website or mobile app instead, including transferring money between accounts, depositing checks, paying bills and speak with a customer service representative.

Your mobile banking app can also help you avoid overdrafts by sending real-time alerts when your balance drops below a set threshold.

Expense tracking tools

Budgeting apps like Mint, YNAB, and Wally can sync with your bank and credit card accounts to provide insight into your spending habits, and some can also provide credit monitoring and provide charts for your finances.

These apps can be simpler and less time-consuming than using a spreadsheet to track expenses. Some charge a monthly fee, while others are available for free.

Credit card provider tools

In addition to third-party apps, you can often track your spending using tools provided directly by your credit card company. Smartphone apps Discover and Chase, for example, provide reports that break down cardholder spending by category, as well as charts that show how spending fluctuates from month to month.


Using a budget spreadsheet may be the right option if you prefer to enter your expense information manually. Although creating and entering information into a spreadsheet can be more time-consuming than using a budgeting app, it gives you the freedom to add whatever columns you want to help you track your expenses.

A budgeting spreadsheet can be created using rows for each expense, as well as columns for things like dollar amounts, dates, categories, and payment methods.

One way to create a budget spreadsheet is to use the Google Drive cloud storage service. Once you’ve created your file there, you can then access it on any smartphone, tablet, or computer you use to access Google Drive.

Subscription management applications

These days, it’s easy to sign up for monthly or yearly subscriptions to streaming services, online fitness classes, and dating apps. It can be just as easy to lose sight of the services you are regularly billed for and no longer use.

Subscription management apps can easily show you a list of subscriptions you pay for, and some of them can even cancel unwanted subscriptions on your behalf. These apps include Trim, PocketGuard, Truebill, and Subby.

At the end of the line

The financial management landscape has changed over the years, with the advent of countless digital tools, but habits such as expense tracking, budgeting, and smart saving remain impactful. The combination of proven strategies and modern technology can help young people achieve their financial goals.

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