Building a budget in your 20s


Listen, money doesn’t grow on trees, unfortunately. I had to learn the hard way that without a proper budget for myself, I would not be able to maintain or achieve any form of financial stability, least bit independence. We should all be striving for financial independence (without going too crazy over the whole getting rich thing). I just wanted to live in a world where I got a bill in the mail and didn’t freak out. I wanted to make sure that I could afford anything that came my way in terms of planned expenses. In order to live like this, I needed to create a proper budget for myself. How did I go about doing that?

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Building a budget in your 20s
  • List your income. Mine lists my monthly net salary, as well as my income from my freelance work.
  • Now list expenses. This list will be long but the amounts vary. You should list your rent/mortgage, car payments, insurance, cable, WiFi, groceries, entertainment – everything. The most shocking thing about listing all of this is that I am 90% sure you didn’t realize just how much you were spending on certain things. My weak spot was my entertainment budget, I was spending much more than I thought I was, and much more than I could afford!
  • Now do income less expenses. If there is a discrepancy, you will have to start moving around some numbers to make your expenses fit into your income – your income needs to be more than you expenses, obviously.
Building a budget in your 20s

I used an Excel spreadsheet to list everything in the most organized of ways. If you know Excel, you can also use the formulas to do the calculations for you. While it may seem overwhelming in the beginning, preparing your budget is only going to help you in the long run. You need to know how to manage your money if you are going to be a stable and responsible adult. I myself am not in a place where I can save money yet, but thanks to the budget, I know that I am not too far off. I can’t tell you what a relief it is to get a bill and know that you budgeted the expense in your budget, meaning you can afford to pay it and don’t need to wait. Paying your bills and credit card payments in full and on time will lower your interest payments as well as boost your credit rating, and we ALL want that!