Millennials seem to have everything figured out — at least for the moment. But once the afterglow of college starts fading and that nine-to-five grind begins to lose a little luster, many find money matters more challenging than anticipated.
Luckily, creating a budget isn’t as dry and dismal as it sounds. You get to tap into that well of creativity you’re so proud of and explore the often-baffling concept of “less is more.” Best of all, following just a few easy budgeting tips will allow you to sleep easier knowing that no surprises will ever force you to live on the street.
Make A List
You can’t create a budget without honestly assessing your expenditures — all of your expenditures. After you’ve accounted for the easy stuff like rent/mortgage, basic utility costs, and monthly loan, credit card, and insurance payments, it’s time to look at the other places your money is going.
Start with entertainment and food expenditures. Remember that this does not just include concerts, movies, and the amount you spend at the grocery store. To create a list that is actually viable and helpful, you must document every expenditure, including cable, internet, Netflix, DVD rentals, newspaper and magazine subscriptions, fast food, Starbucks runs, vehicle fuel and maintenance, liquor, other refreshments, and even every vending machine purchase. Be honest, as it makes no sense to kid yourself about how you spend your money.
If you find you’re overspending a lot, consider slashing a few of the big bills in your life. New car payments can take a huge bite out of your income, so consider downgrading to a used car that won’t require any payments (or much lower ones, at the very least). This will also likely reduce your car insurance costs. Perhaps you don’t need that extra bedroom or the luxurious amenities included in your high-end rental. More modest housing can save you a bundle in just a year’s time.
Adult toys such as ATVs, jet skis, gadgets that talk to you, and game consoles are rarely used but cost a lot to haul, operate, and insure. Never forget about rental options for big toys, which are often much cheaper than just buying them outright.
Sweat The Small Stuff
Where and how you shop can make a huge difference in your budget. Instead of buying groceries at an overpriced “status” store, check out some of the bargain markets in your area. While you might have to visit another store for specialty items, your overall grocery bill will be considerably lower, especially if you use coupons or buy high-ticket items when they’re on sale.
Follow the same guidelines when buying wine, beer, and hard liquor. Big box stores like Costco are excellent places to get these items, as well as things like meat, produce, and canned goods. If the quantities are too large for your needs, simply split them with a friend or family member.
Through The Looking Glass
Although you may love your job, you have to picture where it will take you in the next five years. Consider the opportunities it offers and if they will compensate you fairly/enough to grow and prosper. You’ll probably want a newer car, a bigger home, and perhaps a kid or two. If you don’t see yourself getting these things down the road with your current employer, start exploring other options. Don’t quit your job before you have a new one, but always keep your options open.
Your investments should also be reviewed on a regular basis. What was full of rosy prospects six months ago may be now be falling from grace. Be sure to diversify your investments and find a reputable broker who can help you make sound decisions for long-term returns. Be careful not to fall for any get-rich-quick plans, which often go awry.
Debt Be Damned
Credit cards aren’t meant to indulge your urges — they’re meant to be used frugally for unexpected expenses like major car repairs, uncovered medical expenses, family emergencies, and travel for funerals. Use them only as necessary to build your credit, and review the interest rates regularly. There are usually better deals out there than the one you currently have, including ones that let you rack up cashback or valuable points with every use.
Living on a budget doesn’t need to be painful. Look at it as a way to expand your personal horizons, feed your mind, and get to know yourself and/or your partner better.
A reasonably priced bottle of wine purchased on your own and consumed at home costs considerably less than buying one at a restaurant or wine bar. Even the cheese you’d get to accompany it is half the price when you buy it yourself. Watch some cooking shows or buy a cookbook from a bargain bin and create some mouth-watering dishes at home. Have friends over for a home-cooked meal — perhaps a pizza that you make from scratch — and bring out the board games to keep everyone entertained. Hang out in a public park with a homemade picnic lunch and rediscover the joy of people-watching.