Young people who range from ages 18 to 35 make up the millennial generation—a generation of people who are facing challenges as far as entering the workforce or paying off student debt.
According to a report by The Huffington Post, most millennials are encountering budgeting issues too.As a millennial myself, I have realized that it’s smart to start budgeting my finances now rather than later.Creating a budget will ultimately lead you to a successful future and prepare you for homeownership, retirement, and other personal financial stability.
Try out these five tips to get you started on the right track.
1. Total and Track Your Expenses
Track how much money you spend on a monthly basis. Create a budget sheet to keep up with the cost of each expense. Subtract your income from your expenses to determine how much money you have left over for your own personal needs. When you keep up with your spending habits, it helps you to figure out what expenses you may need to cut down on. Usually, if your bills exceed your income, then you may need to readjust your lifestyle. Maybe downsizing your home or limiting the amount of household utilities you use will limit how much money you spend.
2. Allocate Your Expenses Wisely
Once you figure out the estimate costs of your expenses, you should strive to disperse it evenly. Make sure to get all of your bills and other important payments out the way first. Then, put some away for savings. Whatever you have left over you may use for yourself. As mentioned before, if you’re completely broke after taking care of rent, grocery shopping, and other expenses, then you will need to figure out how to increase your revenue.
3. Use Apps to Help you Budget
There are a few apps you can use on your smartphone that’ll help you budget your finances more wisely. Apps like Mint allow you to set up an alert system to manage bill payment due dates and account balances. Other apps including Level Money and LearnVest which record purchases and inform you how much money you have left over up until a month.
4. Open Accounts to Help You Budget
You have to save and invest if you want to budget the right way. In addition to opening a savings account, start building towards your retirement early. Take advantage of a 401(k) plan made available by your job. Also, look into saving up for crises. An emergency fund should have at least six months worth of savings to cover any expenses.
5. Modify Financial Habits that Don’t Work
If you want to start budgeting better, then you may want to modify some of your financial habits. For starters, stop spending money on unnecessary purchases including outings and expensive activities. Pay on all loans to keep interest down. Stay aware of your credit score as much as possible. Lastly, consolidate your bills to make it easier to pay off any debt.
If you’re experiencing underemployment, then consider looking for a better job. If your local area doesn’t have the opportunities you desire, then branch out to other locations that cater to your career goals. Take your search to employment networking websites like LinkedIn. Submit your resume to online job boards such as Indeed, Gorkana, or Monster. Also, attend local job fairs or conferences.
If you’re happy with the job you’re working at, even though it doesn’t help with your budgeting objectives, then work over-time. Fill-in for people’s shifts when possible and take on additional tasks.
For the most part, you want to be accumulating just enough money to help you afford all living expenses while you save.
If you properly budget and save now, then you should be financially well-off once you’re older.