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The Young Adult’s Guide To Budgeting Smartly

Budgeting doesn’t have to be a chore.

Let’s be real; there is nothing fun about budgeting your money.  It can be frustrating, time-consuming, and not any fun.  But, today we are here to assure you that budgeting doesn’t have to be as awful as you think. We are going to give you the tools and tips you need to get started creating a monthly budget.

Figure Out The Income You Bring In Monthly

I know that this might sound like a no-brainer, but if you don’t have a budget written down, you may not realize how much money you actually make. So, take time to figure out, after taxes, how much money you have available to spend each month.

Make A List Of The Bills You Have To Pay

These are things like rent money, car insurance, cell phones, wifi, etc. These are non-negotiable. You can’t change how much money you pay for these items, but you do need to make sure that you have enough money each month for them. After you eliminate these things from your budget, you have the money you can freely spend each month.

But, What About Savings?

Hopefully, if you are gainfully employed, your company offers a 401(K) or an equivalent that you can buy into. If you are unsure what that means, you may want to check out our article here. But, if you don’t have a 401(K), then you need to be saving money for your retirement. And, it is never too early to start.

I would suggest opening up a separate savings account where you can put this money each month. Look at your budget after you’ve saved money for those necessary bills, and figure out what you can keep from that. Now, you don’t want to save too much, so you’re left with hardly any to spend, but you also want to find a balance of still saving enough. It may take a couple of months of budgeting to figure out the right amount for you.

Think Groceries, Think Gas

Before you figure out the exact amount you want to save each month, you need to make sure you can eat and get to places first. Paying for groceries and gas is not a fixed price per month. It can easily change based on gas prices rising or if you need more food for guests.  I would suggest that you set aside more money than you think you will spend each month in this area. You don’t want to dip into your savings if the unexpected happens.

Try tracking how much you spend on your gas and groceries for a couple of weeks or months.  It might help to record and keep track of these numbers so that you can go back to the data before you make a decision.  If you want to cut back in some areas, see if you can get food at a cheaper grocery store like an Aldis, or buy products that aren’t name brand.

The Fun Part

After you have budgeted for all that unfun stuff, you should be left with the money you can use for the activities you like. I would suggest setting a spending limit for each weekend. That way you aren’t tempted to spend more money than you have on shopping, eating out, and movie tickets.  If you don’t have the money to go out to eat with a friend, why not take a nice walk instead? Or, have them come eat dinner at your house. Don’t sacrifice your time with friends and family because you don’t have a ton of money. Real friends can have fun doing anything together.

Get In The Habit Of Budgeting

This might seem pointless at first, but once you create a habit out of budgeting, you are going to see the benefits in your life. You never again will have to wonder if you’ll have enough money for something in the future, or have a declined card.

Expect Rainy Days

Expect that there are going to be times where your car needs to be fixed, your fridge broke, and you have to buy a gift for your mom’s birthday, that all happen in the same month. There are going to be months you’ll have to spend more than you budgeted for.  That is why it’s a good idea to keep extra money, or emergency money tucked away.  This could be as simple as putting ten dollars away each month or saving the money that you get for holidays or birthdays instead of spending it all. Make sure that you are covered for when hard times come.

As you can see, planning a budget doesn’t have to be so painful. But, by taking these steps, you will be one step closer to being the responsible adult you’ve always wanted to be.

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