Are you a young adult? Maybe you’re in college or just starting your first job. If budgeting is something that you struggle with, then this article will help!
In this blog post, we’ll be focusing on budgeting tips for young adults. These budgeting tips are geared towards people who don’t have much money coming in and need to make some tough decisions about spending their income.
By the end of the article, you should know more about budgeting and feel more confident in managing your expenses!
Be aware of your income.
Be sure to track how much money you are bringing in every month. Knowing your income is crucial for understanding where exactly your money is going. Also, when trying to save more, it’s extremely helpful to know the areas of spending that are less important than others so they can be cut down on! This way, you will have enough leftover to put towards savings and paying down debt.
Using a budgeting app
There are many great budgeting apps out there that make the process of tracking your income and expenses quick and easy! Apps like Mint or You Need A Budget can help you stay on track with where all of your money is going, including setting reminders for when bills are due.
Creating a budget
If you’re not sure where to start, then creating a budget is the way to go! A simple Google search will allow you to find hundreds of templates that can help walk you through how much money should be going towards savings and bills each month. Even if your income isn’t stable yet, a budget will still be extremely helpful for you to stay on track with your spending, no matter how much money is coming in!
Budget for ALL your expenses
Budgeting is one of the initial steps to attract wealth. Unfortunately, it’s very easy to forget small things that you spend money on every day in budgeting. However, those “small” things add up over time and can hurt if they’re not budgeted correctly! A good way to avoid this is by making a comprehensive budget plan that includes everything from rent or mortgage payments to everyday expenses like eating out at restaurants or grabbing a coffee with friends.
Save, save, save!
One of the main reasons that young adults struggle with saving money is due to poor budgeting and not making a priority out of it. However, to achieve financial security in your future (no matter what that may look like), you must be able to set aside some amount of your salary for savings.
For example, if you earn $30,000 a year and save 10% of it each month (or $300), by the time you’re 65, you will have saved $376,000! Even if this isn’t enough to retire and live comfortably until death, it’s still a lot of money!
Be smart about your savings.
If saving for retirement, emergency funds, house down payments, college tuition fees, etc., it’s great to start putting money away for these goals. However, it’s important to be realistic about how much money you should put towards each savings goal! Every dollar saved is one less dollar spent, so make sure that the amount of your income being saved doesn’t get in the way of your financial safety nets and daily expenses.
Track your spending
To be successful, you must keep track of your spending. You can use a spreadsheet to help you do this. Take control of your finances and cut back on expenditures by tracking your purchases and reducing your costs.
By tracking your spending, you’ll be able to see exactly where your money is going and make necessary changes to save more. You can also use your credit or debit card statements as a reference tool when doing this!
Using a bank account and debit cards can make it very easy to spend money. While you’re young, this may seem like the easiest option; however, using cash is one of the best strategies for saving money! By limiting yourself to specific amounts of cash each week or month, you’ll be forced to choose what you spend money on carefully.
Eliminating the temptation to buy things you don’t need is one of the best ways to save more. Try putting your budgeted amount of cash in an envelope each week, and only use it for what’s intended!
Take advantage of coupons.
Most companies offer discounts and coupons to make their products more appealing to consumers. Even if money isn’t tight, you can still save a lot by paying attention when shopping! For example, many grocery stores offer loyalty programs with discounted prices for frequent shoppers.
Keep an eye out when doing your weekly groceries; you may be able to pick up some extra items for free!
Shop from the list, Strictly!
Make a list before you go shopping to avoid impulse purchases. Stores are designed to create an environment that influences your spending. While you’re young and still learning about saving money, it’s important to keep yourself accountable for everything you’re buying!
Before walking into the store, make a list of what you need, and avoid walking down the isles until you know what you want and don’t want to buy!
If you get to the store and realize that you forgot something important, make another list and stick to it! This will give you more control over your spending and help you achieve your saving goals.
Set aside money for emergencies
Emergencies always seem to happen when you least expect them. By setting a specific amount of money aside each month, you can avoid going into debt and getting yourself further in the hole due to unexpected expenses.
If an emergency does come up, you’ll have savings to put towards your unforeseen costs so that it doesn’t get expensive!
Set a realistic budget
Set a realistic budget with your income in mind and stick to it. To create a realistic budget, you’ll need to map out how much money comes in each month and set aside what you can reasonably spare. If you have a lot of debt, you may want to pay down your debts before saving for other goals. You can use a budgeting app or software like Mint.com to help track the small details of expenses and income. This way, it’ll be easier for you to set up a plan that fits your financial needs.
Organize into categories
Organize your finances into different categories, such as groceries, entertainment, and savings. It’s important to have a budget for every category so that you can give yourself some wiggle room when it comes to spending. For example, if your grocery budget is $100 per month, but you happen to spend $110 one month, you need to cut back in that category or adjust your budget.
Clear your Debts first
Pay off student loans or credit card debt before you start saving for retirement. While it may seem like the smart choice to invest in retirement when you’re young, this strategy can leave your future income stream in jeopardy if you happen to experience financial hardship.
It’s important to pay off existing debts, so they don’t plague you financially for years to come. You can put aside money each month to pay down your loans or use a credit counseling agency to guide you through the process!
You can use these loan calculators to help you assist in understanding your debts.
Consider taking on an extra job.
Sometimes, a little extra money to help you get closer to your goals is what it takes. While taking on an extra job might seem like a lot of work, it’s worth the effort to avoid going into debt for things you don’t need!
If your budget isn’t perfect and you’re still finding yourself short on cash, consider working a part-time job or doing some freelance work. This extra income could make a difference in your financial goals!
Do not spend it all in 1 or 2 days.
If you receive a large sum of money unexpectedly, do not spend it all at once. Instead, it is recommended to take the money and divide it into different accounts for small amounts that you can use for daily expenses. This will help you to manage everything that you need and still leave some money left over.
Review at the end of each month
Review your budget at the end of each month and see where you can save a little more money or cut back a little. This will help you to be closer to your financial goals at the end of each month.
Never spend more than what you have.
Make it a rule not to spend more than what is in your bank account at any given time. This will help you to avoid the possibility of overspending and putting yourself into debt.
Compare the cost of living.
Look into the cost of living in different cities before making big decisions about where you want to live and work.
When looking for a new place to call home, you must consider each city’s cost-of-living index. If you do your research up front, you’ll be better able to make the right decision (or at least one that is informed). For instance, if you’re moving from a city like Dallas to New York City, you should consider the significant difference between those two numbers.
We can’t always control what happens in our life (sometimes we experience setbacks and other uncontrollable events), but we can control our money. So while it may seem like a challenge, your future depends on your ability to control your financial situation and ensure that you’re making the best use of your time, energy, and money!
With these steps in mind, you’ll be able to create a solid budget that accounts for every expense and offers some wiggle room for other unexpected things. Then, by leveraging your money in smart ways, you can ensure that it’s working for you without taking too much out of your day-to-day life!