Millennials have the strongest entrepreneurial mindset, and that’s not a surprise with how easy it is to start your own business nowadays. In a recent survey implemented by Bentley University, 67% of millennials said their goals involve starting their own business, rather than climbing the corporate ladder to become a CEO. With this lifestyle comes a lot of financial responsibility at a young age, and it is important to find and conduct a budgeting strategy that works for you. Having an organized financial system assists in a lifetime of financial independence and control, so beginning this journey as soon as possible is always encouraged.
Let’s start off with the most common financial mistakes – that way, we can configure the best way to go about fixing them:
- Taking on too much debt – not just the student loans, but credit cards! Yuck, too much high interest!
- Not paying close attention to your bank budget and overdrawing.
- Not putting any money in savings.
- Having budget goals that are too strict and leave no “wiggle room”
- Not analyzing your budget regularly.
Where to begin
When you’re just learning how to budget, you always want to analyze your bank statements to figure out what your money is going towards. Once you have a clear understanding of your spending status, it’s imperative to define a game plan for your expenses. There is never a designated timeframe for when to start budgeting. You can begin the process during your time as a college student, or when you graduate college; when you’re coordinating your first job or starting a personal business. You can always analyze your finances at a new point in your life to come up with the right budget for your lifestyle.
How to track your expenses
Great budgeters are first and foremost organized. Having complete control over your financial life takes a large amount of responsibility and being organized ensures your money is tracked in an assistive way. From my experience using Excel, I can confidently say this has become my lifesaver for many years. It’s a very simple strategy! Placing all of your expenses in an editable spreadsheet allows you to plug in your monthly bills, loans and any other additional expenses in sections based on the particular month. If you find yourself on your phone more than anything else, try using an app for budgeting your money!
Ways to save money
This element is crucial and defines your willpower to save rather than to spend. It is important to know when to say no to experiences you can’t afford. If you see yourself giving money to a lot of extracurriculars, or unnecessary items, you’ll eventually find yourself in a deep hole of debt.
- Explore your bank statements to see if you’re paying for any monthly subscriptions you don’t need or want anymore (magazines in the mail, music accounts, movie or tv show streaming networks).
- See if you can lower your monthly loan payments through refinancing your student loans. Student loans will be, or are one of your largest payments, so refinancing to get a lower interest rate will end up saving you a substantial amount in the long run.
- Open up a savings account! When you earn your paycheck, take out a certain percentage of it and place it in a fund that you cannot touch for a few years. You’ll be surprised at the amount of money that you can save by doing this!
If you already have multiple kinds of debt, pay off one small thing at a time to get a feeling of accomplishment and gain faith in your budget. Then work on the big, high-interest stuff. If you don’t have debt, make a savings goal for something you want like a trip or a house, and use that to get your proficient feeling!
Hopefully you’re feeling a little more confident when it comes to starting or managing your budget. Remember: this is not supposed to be a stressful process, so try not to think about your budget so much that it is life consuming– but rather update your tracking on a monthly basis!
For more specific budgeting guides, try these other posts: