Creating A Smart Budget to Manage Millennial Money

May 16, 2018 in Personal Finances - No Comments - 5 min read
Improve the status of your finance with smart budget technique

Creating a budget is definitely important to manage your money successfully, especially in your 20’s. But most people cringe at the sound of the word, I hope you didn’t do this. Because no matter how bad it sounds, budgets are not as bad as they have been made out to be. It is just a way of knowing where your money is going so that you can freely spend your extra or leftover cash. So from now on, I would like you to think of a budget as a tool that is going to set you free.


A lot of people struggle with managing their money and they are almost always broke. This may lead you to think that it is because salaries of recent graduates are usually small and not enough. But there are ways to make your money work well for you. The key to doing this is knowing where your money is going. This essentially means that you should track your different income revenues and expenses. And this is done in the form of your personal budget. If you only have one form of income, that’s totally okay. You can learn how to increase your income revenues through side hustles in the post about the ultimate side hustles.

Budgeting Basics…

Ok so a general rule of thumb when it comes to budgeting is the 50/20/30 money rule. This rule states that your budget can generally allocate 50% of your salary to expenses or essentials, 20% goes to your savings or investments and lastly 30% goes to your lifestyle. See, budgeting sounds so easy already. However, I wanted to go in depth to help you understand how to structure your budget, and what to include in it.

So a budget general includes a summary of your income and your expenses. And I am going to show you what to generally include in it.


In this section you state all of the money coming into your bank account monthly or for the period your are budgeting for. You may include your salary, any allowance that you receive or monetary benefits from any clubs. Also, if your investments generate quite a bit of money in the form of interest, you could include that here as well.

When I started out, this section only contained my salary and I wasn’t getting much interest from the small investments that I had made. So if that is the situation that you are in as well, there is no reason to worry. That is what I am here for. You can check out the side hustle options that could work for you.

In most cases, the income that you project or plan for, is the one you receive. So deviations from your budget are probably not going to come from this section. The problematic area is your expenses.



This is the important section. Most deviations come from your expenses. But as time goes on, and you have mastered this budgeting thing it will go smoothly. It is important that you know your expenses very well so that you can predict your financial status. If you know how much you will receive and what you will spend it on, you can make a solid plan. And chances are, your broke days will be behind you.

So let’s get into it. You will definitely have Fixed expenses which are the costs that go out every month. You generally know the amounts of this expenses before-hand. Or you can come up with a ball park amount for these expenses. You also have Variable expenses, and as the word says, these are expenses that vary or are a different amount every month. But we won’t let this get in the way of making a budget for them as well.

        Expense Categories …

So firstly,you should categorize your expenses any way that works for you. I recommend that you do it as follows:

Fixed Expenses

  • Housing Expenses: Includes rent, water, electricity, cable, etc.
  • Transportation Costs: Could be your car installment or bus or taxi fare if you use public transport, car insurance, fuel, etc.
  • Other Insurance Expenses: This includes health and home insurance, or even life insurance if you have dependents. You can read up on the importance of insuring yourself in Ways to manage your finances in your 20’s
  • Loans: Very important to create a plan to pay off your debts. Ways to manage your finances in your 20’s suggests a plan that can be used for student loans and credit card debt.
  • Taxes
  • Savings and Investments: This is a big one for me. I treat saving as an expense because it is important to do it monthly. You can do this by setting goals and using saving to achieve them. You can be extreme (like me) and put away your savings before all of the other expenses. I love having savings because it removes the feelings of feeling broke. It’s like “I can’t buy these shoes now, but at least I saved”.

Variable Expenses

  • Food: Include groceries AND an estimation of the costs of eating out. This is important because you can limit the money spent on eating-take outs.
  • Personal Care: Toiletries, Hair, Nails and Clothing. This is definitely my favorite category and one where I usually deviate in. But with discipline and as my budgeting skills improved, I can easily cater for this category without breaking the bank.
  • Entertainment: Another fun category to plan for. This is definitely a variable expense but try and make a good estimate. As time goes on, it will become easier to plan for.


The list is definitely not limited to the expenses that I have mentioned. You can customize it any way to fit your needs. Just remember to include ALL of the expenses that you can predict or plan for. That way you will master planning and organizing your finances. You can make your own budget! See, it does seem like such a dreadful word now, does it?


An Alternative …

Okay now that you know how to create a budget, you don’t have to go through the whole process of creating one for yourself. I have created a free printable budget template that you can also edit to suit your needs.

You’re welcome!

It is VERY important to write your budget down or to type it and print it out. Because when you have done that, then your budget EXISTS. It is not just numbers in your head that you probably will not be able to keep track of. Luckily you don’t need to try to keep track of the numbers in your head. If you want to save yourself the stress, just use the free printable that I created for you. It’s just easier.

Final Thoughts on Your Budget …

Remember that a budget is not a static document, it will definitely change. So it’s important for you to review how your budget is doing and make adjustments to it!

Having discipline is also a big part of managing your finances, so try to stick to the budget that you created as much as possible.

And remember, making a budget and not looking at it is the same as NOT having a budget. We wouldn’t that, especially after going through the process of creating a budget!

Now that you are a guru at budgeting, keep at it and see how it helps you flourish in your 20’s!



Get your finances in tip top shape with this smart budget technique.

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