#HowToAdult: 8 Tips On Budgeting Money In Your 20s


Being a young adult in the modern generation is not a piece of cake. The financial struggles that people face in their 20s are seemingly larger than the past generations. It includes overly competitive job market (e.g., preferring Masters and PhD), technology costs (e.g., constantly having to upgrade to the latest gadgets), and exhausting student debts.


To deal with these challenges, you must take a frugal approach into budgeting your money. Use these eight tips:


TIP #1: Cultivate Your Mindset


The initial step to build a realistic budget is to perceive things in a different light. Cultivate a mindset that budgeting encourages you to live within your means instead of something that hinders your spending. Basically, you must ensure that you have less cash going out and more coming in.


TIP #2: Practice Saving

TIP #2 Practice Saving

After ironing out your mindset, it is vital to make saving a habit while you are still relatively young. Begin by saving as small as AU$1 or PHP35 daily in a span of a week. Then, add a dollar more than the last week. Here is an example of Jen’s first month of savings:


Week 1 – AU$1 or PHP35 per day

Week 2 – AU$2 or PHP70 per day

Week 3 – AU$3 or PHP105 per day

Week 4 – AU$4 or PHP140 per day

Week 5 – AU$5 or PHP175 per day


Sustain this method for at least two months and be happy to see your savings account balance grow! Doing this will help you absorb the discipline that you need in saving money.


TIP #3: Assess Your Expenses


Before dictating a budget, you must know your cash flow first! Assess your expenses by analyzing previous month’s receipts, bills, and bank statements. Highlight the fixed expenses that you cannot do away each month as well as the unnecessary expenses that you must eliminate.


For people who are living alone, one of the biggest expenses include food. Solve this by learning how to cook. Convince your 20-something self that it is time to learn cooking simple dishes such as Tortang Talong, Omelet, and Carbonara. The Web is full of resources to satisfy your hunger for information.


TIP #4: Determine Your Debt


I was still dependent on my parents until I was 20 years old. It is inevitable to have some form of debt with my limited streams of income. Fortunately, I figured out how to pay it off. I list down my debts and saved up money every month to pay for it. I suggest that you do the same.


Start by making a list of your credit card debts, student loans, and other deficits. Specify each of its balance, payment amount, due date, and payment address. Organizing these information will come in handy when making a realistic budget.


TIP #5: Build A Realistic Budget


Build a realistic budget by combining all your streams of income as well as your all your expenses and debts. Subtract the amount of your monthly credit from your monthly income. Afterwards, figure out how many percentage of your income will go to paying off your debts (e.g., 5%). Spare a portion of your funds as there are categories in numbers 6 and 7.


TIP #6: Make A “Fun” Fund


As I am in my 20s too, I am pumped by the activities that generate entertainment. I believe that playing hard comes right after working hard. I am motivated to be more productive at work by rewarding myself from time to time.

TIP #6 Make A Fun Fund

Reward yourself with a responsible amount of 5-8% of your monthly income. Find interests and hobbies outside of work such as painting, swimming, writing, reading, or cooking. Allocate your budget to these fun activities accordingly.


TIP #7: Allocate Money For Emergencies


Most people in their 20s view themselves as strong, youthful, and indestructible beings. Yes! We are full of potentials but, we are vulnerable too. Unforeseen events can happen in a blink of an eye. So, you have to be prepared.


Put a relatively small portion of your monthly income to your emergency fund. When life hits you with an unexpected turn, you will have a financial cushion. It will also prevent you from borrowing money or from getting bankrupt.


TIP #8: Review Your Monthly Budget


Do a review of your monthly budget over the past three or four months. Recognize what went right and what did not to help you identify your weak spots.


TIP #8 Review Your Monthly Budget


For instance, you probably spent more than you intended on a luxurious wedding gift. Or, you may spend twice as much on a laptop because you did not shop around. Learn from these mishaps and apply what you learned on the next month’s budget plan.


As a young adult, take the time to learn the art of saving, to allocate money for entertainment, and to get on the right track. Observe your healthy budget habits and diminish the unhealthy ones. Good luck!

Anna Agoncillo

Anna is a Registered Psychometrician and a graduate of Cardiff Metropolitan University, United Kingdom. Earning a bachelor's degree with honors in Psychological Studies, lead her to a career of writing and teaching. She is also the author of the new book entitled Psychology of Love, Money, & Life.


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