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17 March 2019

A Millennial Guide to Budgeting in the Real World

Millennial budgeting tips for saving money
Millennial budgeting tips for saving money
Millennial budgeting tips for saving money

Let's be real, adult life is hard. Finances are often one of the toughest parts to deal with, because it's so important and yet we don't really ever get taught anything about money in school, just about trigonometry, which is super useful. People are often quick to flaunt their latest purchases online, but we never really know about the things people can't afford or if they're struggling to get by month by month. The highlight reel that is Instagram can make me feel like I have less money than everyone, which is ridiculous, as I know full well that I am very lucky to be in a position where I have a roof over my head and I don't need to worry about where my next meal is coming from, which I know is the reality for so many out there. Nevertheless the pressure to always have more and do better is increasing because of social media, and as much as I try to ignore what other people are up to and just Stay In My Own Lane, it has kind of become one of my motivations to be good with my money and strive towards a place where I'm much more comfortable

I know so many millennials struggle with money and not feeling enough in that department, so I wanted to share a few of my tips for budgeting effectively and disciplining yourself when it comes to how you spend your money, without being tight. 

Millennial budgeting tips for saving money
Millennial budgeting tips for saving money

Goals
Goals are really important when it comes to finances. You need to know exactly what do you want to achieve. Are you saving for a house? Are you saving to go travelling or a summer holiday? Or are you just really desperate for that Dior bag that you haven't stopped thinking about since 2017? Whatever it might be, we need to be clear about what we want if we ever want to achieve it. Let's face it, is there's no goal, why would any of us bother budgeting and saving?

Cut Out the Non-Necessities and Make an Effort
I really hate when Baby Boomers and Gen X tell us Millennials that the reason we are renting till we are 35 is because we have take-away coffees and avocado on toast. Because it's ridiculous. The reason we are renting is because the gap between housing prices, the cost of living, and salaries in the UK is bigger than it ever has been. 

Anyway, while I'm not saying that you can't buy yourself a coffee, I do think it's good to cut it out if it's something you do regularly, say every morning. If you add up what you could save by just making your own coffee on weekday mornings, and times that by a month, it's staggering how it all adds up, and that could be all going straight into your savings account instead of to Starbucks. It's down to you to choose what little luxuries you're happy to cut out/cut back on, but make sure you use will-power and stick to it if you want to see results with saving.

Deduct, Then Split
(You have to say this in the same rhythm as 'Bend, and snap' Elle Woods' style) This point is one I use to get my head around how much I can afford to spend, and it's worth noting that this works best if you are receiving a monthly salary. Start by writing down your monthly take-home. salary, and then list your set outgoings underneath e.g. rent, council tax, electricity, phone bill, gym membership etc.  All the boring stuff. Then take off your  monthly savings goal, as you need to be putting your savings away before you have a chance to spend them. Then you have your balance leftover. Divide that balance out by 4.5, and that is your weekly budget.

This one can be a bit of a trial and error to see what works for you and your lifestyle. If you're new to saving and not naturally great with money, it's going to be tough. You need to alter your mindset and you can no longer view your monthly income as 'spending money' that's available to you. All that is available is your weekly budget that you allocate, everything else should be put into another account out of reach. It will be difficult at first but you just need to have self-discipline, and as soon as a few months have gone by and you see your savings account starting to stack up, that will motivate you to keep on going. 

Millennial budgeting tips for saving money
Millennial budgeting tips for saving money

Work out a Realistic Timeline
When you've got your goals, and figured out how much you can save each month, then you should figure out how long it will take you to hit your goal. Having a realistic timeline planned out, even If you do deviate from this a little (life happens), will help you stay organised. For me, well, I'm a bit of a control freak and a real planner, so I do like to always have a  bit of a timeline planned out in my head of where I'm headed, and if it isn't realistic to you then it can be really de-motivating. So with that in mind, be sure to avoid any crazy un-achievable targets.

Budgeting accounts
I know there are a few options on the market, but personally I've used Monzo for a couple of years now, and it is such a helpful tool when you're trying to watch your pennies. It's so easy nowadays to spend spend spend, (especially with contactless culture) and before you know it you've spend £70 on food and drinks on a sunny day just, because. If you figure out your weekly spending budget as discussed in the above point, and then top up your Monzo card with said budget every Monday, you're good to go, and you've got your spending limit for the week sorted. The app makes it really easy to check your balance and it also gives you spending reports each month breaking down the areas you spend most of your money, so you can use it to pin point more things that you might want to cut down in the future. It's also really easy to use and safe, with the ability to freeze your card instantly in the app if you loose it, which is obviously handy now and again.

Food Planning
I don't want to say 'meal prep' because that makes it sound like I'm a fitness gal and unfortunately that is not the case. But I know when I don't plan my meals for the week and do my weekly shop to a plan, then I always end up going for the lazy options and spending more money than I need to. I plan my week on a Sunday and buy everything I need. Then when it's written down and I know I have all my ingredients, there is no reason for me to buy lunch at work, or order a takeaway, so it cuts all that extra spending that comes when you want convenience, and you haven't planned ahead. It takes some getting used to and may seem like a load of effort at first, but it's honestly really effective and frankly when we plan our food properly, we save money and there is less waste which is obviously a great perk. 

Millennial budgeting tips for saving money
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Millennial budgeting tips for saving money
Millennial budgeting tips for saving money

I'm no expert but these are all tips that I've made work for me over the years and I think they're all simple enough to adapt into anyone's life. If you have any other tips that work for you, let me know!

K x

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