Being in our twenties is hard. This is the first time you actually get to be an adult, not the fun way of getting to do whatever you want, but the dreadful combination of paying bills, having to save, going to work to make a living and contributing to that 401k. Many of you may feel financially lost and its probably not because you don’t want to take control of your finances, from my experience, most people do not know where to start. Managing your finances for the first time is overwhelming, you now have to worry about the things your parents use to care for like healthcare and if you’re recently out of college, student debt. The sooner you get over the dreadfulness of finances the quicker you will start building good financial habits. These years are crucial times in deciding on what to spend your money on, and you don’t need to sit at home eating noodles and watching tv on a friday night to do it; life is about balance, understanding your financial priorities will allow you to enjoy life while making good financial decisions.
Now that you have decided to take control of your finances, where you start? The answer: Budgeting. You wouldn’t build a home without a strong foundation, thus you cannot create financial plans without a good budget. I have created a Budget Worksheet that will allow you to write down the important things without being overwhelmed. The important things are how much you bring in, how much do you spend on necessities (i.e rent, groceries, electricity), and how much disposable income do you have left after. I understand that we are all at different places financially. While some of you may have just finished school, others are climbing the ladder at your job so the budget worksheet also includes life insurance and retirement/investment savings for those who have them.
This budget worksheet is simple to use. If you are single, not in the relationship way but in the financial way, write down your income. Make sure to include both earned income and other income such as alimony, investments or child support. The second section is about your expenses. These are the most important parts of your budget; how much you bring in and how much goes out. The rest is pretty self explanatory. Fill out where you spend there rest of your money.
Come back to see what to do with your budget worksheet.