How to Budget as a Twenty-Something Post Grad
As a twenty-six-year-old post-grad, I understand the struggle of trying to get your bank account to not look extremely pathetic. I’ve just recently climbed out of the hole that life had put me in and decided to start planning where my money goes a little better. Now, I’m a finance guy who has always been good with numbers and planning, but life comes at you unexpectedly sometimes and drains away what you’ve already saved. Over the last few months, I’ve noticed some things that are tremendously beneficial to saving though, and decided I would go ahead and share those budget tips with you now.
The Big Green E
Excel is a daunting piece of software to many people, but it really shouldn’t be. It is such a great tool to have and there are countless tutorials on how to effectively utilize the program. Currently, it is the only way I budget because it allows me to constantly change and tweak what I need based off of what is actually happening in my life. It also offers the flexibility of more than just a monthly check as many sites/apps do. I currently have my budget broken out by pay period, so I can factor in which paychecks will be hit with the most bills. This allows me to subsequently see where and when I have the most money to save or even pay off something I didn’t think I would be able to pay off until the next month or so. And as I mentioned previously, as things change (unexpected pet bills, car problems, etc.) and Excel allows me to truly see how that affects my budget almost immediately.
Saving & Budgeting Apps
Any app or site where you can track your money can be helpful if used properly. Of course, many of our bank accounts also utilize some of these functions, but they aren’t always as fluid or easy to work with as the app versions. The app I have been using as of late is Truebill, and what drew me towards it was its recurring charges functionality. I’ll admit, I have quite a few subscriptions that hit me every month. I also had some that were coming out of my account every three months or so that I wouldn’t ever really notice due to their infrequent withdrawals. Truebill puts all of these recurring charges on one page though which makes it very easy to see what you still use and what you don’t. They also have a really neat function where they will call and cancel the items you no longer use!
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The Golden Budgeting Rule
Depending on who you ask the golden rule of saving/budgeting may differ, but I would guarantee you that more than two-thirds of all professionals would tell you that the 50/20/30 rule is crucial to planning for your future. This rule ultimately is that 50% of your monthly income will be applied to fixed costs (such as rent, utilities, etc.), 20% will immediately go into your savings, and the last 30% is your “fun money” or money that you have for spending. This rule works most effectively when you keep the percent’s in this order as well because you automatically account for 70% of your monthly income being gone before you spend anything. Personally, I like to break these down by pay period as well because I feel it allows me to see where and when I will be cutting it close. But whether done monthly, bi-weekly, or even quarterly, this method is a great way to start looking at how you budget your money.
Other General Budget Advice
One of the other key things I always try to do is overestimate my outgoing expenses. Since I have started doing this, I virtually never cut myself short and always have more than enough planned out for bills. Plus, it is very nice when you approach the end of the month and see that your account is higher than you anticipated it would be! I also have weekly and bi-weekly reminders set to adjust my Excel budgets just to make sure I am keeping up with my planning even during the busiest of times. My final piece of advice is to not be afraid of doing things that can save you money in the long run. I know once we are out of our parents’ houses we never want to go back, but sometimes a few months back at home can save absurd amounts of money. For example, say you are bringing in $1,000 a paycheck or $2,000 a month, and your rent is $750. That is already roughly 38% of your fixed costs for the month, and if you move back home for 6 months you just saved yourself $4,500! So, no matter what or how you are currently budgeting just know this; life can be hard sometimes, but as long as you follow a few simple tips you can always boost your bank account.
Thanks again for reading my how to guide on budgeting. As always, please leave some feedback and give my page a follow so you can experience all of my content. I’d love to hear from all of my wonderful readers, so be sure to rate/comment often!