Budgeting is a financial skill that everyone needs to learn. Not only does it help you determine where your money is going, it also enables you to ensure that you only spend within your means and save on a regular basis.
"Manage your spending by creating and sticking to a budget."
-Alexa Von Tobel
Here are some things that Gen Y should take into account when it comes to budgeting:
Create a list of expenses
For a generation that tends to do everything themselves, thanks to technology, it’s not enough to be diligent in paying all your bills. List all your expenses every month so you’ll have a clear picture of where your money is going and be able to see opportunities for saving. You have expenses that you can eliminate or reduce so you’ll have extra cash for other things.
Part of budgeting is keeping aside a portion of your money. For many, they save whatever’s left of their income after the expenses. You need to save first and then spend whatever’s left. Do this regularly and you’ll be able to save more.
Use a household budget planner
Millennials usually rely on the internet to look for information. Well, you can do your budgeting tasks online with a household budget planner. There are several websites and apps that offer this online tool.
Learn how to invest
What’s great about being young is that time is on your side. Financially, you can use this time to your advantage by getting started with investing. Nowadays, you don’t need a lot of money to build a diversified portfolio. A financial adviser will be able to guide you about what investments will best grow your money for the long term.
Build your retirement plan
It’s understandable that many in Gen Y will not even think about saving for retirement at this point in their lives but, when it comes to saving for anything, it’s crucial to start as early as possible. Take advantage of the compounding growth that can significantly increase your super.
Do you have other budgeting tips for Gen Y? You can share your ideas in the comments section.