Being in your twenties means so many exciting adventures to take, and so many fun milestones to meet in your life. But all of that also comes with needing money to fulfill said milestones and adventures…not so fun now is it.
Moving out three years ago, going through post-secondary school, holding a few full-time jobs and now entering a new phase of life (I recently got engaged!), a lot of budgeting has come into play.
It’s definitely not east to balance wanting to have fun in your twenties with trying to prepare yourself for the future, but over the years I’ve picked up some habits that really help with managing money (especially when you don’t have a lot of it!).
Money Saving Tips When You’re Broke In Your Twenties
Know Your Expenses
Number one is to know what you have to pay for every month. Go through your banking app and see what expenses come out every single month.
Think rent, insurance, utilities, phone bill, bank fees, car payment, loan payments. Jot these fixed payments down and then go back and factor in other fluctuating expenses.
Do not forget about expenses like groceries, gas and other spending that you do each month. These are important expenses you need to spend each month but they’re not always going to be the same.
What you should have is a rough estimate of how much you’re spending on these fluctuating expenses each month. This helps to keep you in check not to overspend on these expenses.
Use A Banking or Budgeting App
You know we’re all glued to our phones anyways – might as well take a few minutes out of your week to check your spending!
Having a banking app and checking it regularly really helps keep you in check with your expenses. My bank has an app that tracks all my expenses, breaks them into categories and lets me know when I’m spending more than usual in each category.
This is super helpful to keep me accountable if I’m overspending in some areas. It alerts me when I’m spending more than usual, which helps keep me in line and reminded if I really need that Starbucks coffee or not.
50-30-20 Rule
When it comes to your monthly income, 50% goes towards your bills, 30% goes towards other/entertainment and 20% goes into savings – that’s basically the jist of it.
This rule is super helpful. It helps you keep on track when deciding how much money you can be spending on stuff. It’s especially helpful when moving out or into a new place, because you have to know what you can afford when it comes to your current job situation.
I think it’s also important to have a little spending money – of course you’re gonna want to have some drinks at the bar one night, grab your friend a housewarming gift, or catch a movie once in a while – there’s where your 30% is for.
But it’s also super important to save – 20% too. This money will help in situations where you may lose your job, you’re saving up for a vacation you’re dying to go on, or your future house. Always have a savings.
Cut Out The Expensive Habits
We know we’re all guilty of this, but cutting out those money sucking habits can really help to save yourself some cash. Try cutting back on smoking (hey, it’s better to cut it completely out while you’re young anyways!), skip the daily Starbucks, and just maybe you don’t haaave to get your nails done every single month (DIY it!).
I know these things can make you feel better in the short term, but in reality they’re just continually hurting your financial situation. Switch to E-cigarattes or vaping to help you quit, make the coffee at home and take a go mug, and paint your nails yourself (or have a girls night!) if you need some color. Your bank account will thank you later.
Stop Rewarding Yourself With Stuff That Costs Money
You know, the “I killed that psychology test so I deserve a shopping spree now” sort of thinking? Cut that out. Of course it’s important to acknowledge the triumphs in life (even the little ones!) but they don’t all need to have a monetary value attached to them.
Treat yourself to a nice bubble bath, your favorite home cooked meal or a movie marathon with some friends – things that will cost significantly less money than a shopping spree on clothes and shoes (which you do not need).
There are so many things I wish I had known when I was younger (especially before moving out!) when it came to money, but I’ve slowly been learning along the way.
I’m no financial guru, so if you’re really in a hard financial situation, talk to someone. Your parents, friends, a person at the bank – take control of your finances and see where you need some tweaking. You never want financial strain to be the cause of a relationship or friendship fallout.
I know money management (heck, even making money) is difficult in your twenties – needing 7+ years experience, but also a bunch of education to make the bigger bucks. At 23 there’s not even enough years for that…
And wanting to experience “all the things” because you’re in your twenties and that’s what you’re supposed to do?? It’s tough to find the money to do it all.
Taking control with what you do have and knowing how to manage it is the first step.
How do you manage your money? Have any awesome tips? I’d love to know in the comments below or find me on Instagram (@jamienoonan)!