How to live on a tight budget in your 20s

Most of us are already living on our own, as in not with our parents, by our 20s. We have a job and are just beginning out paths in our respective careers and getting to know life outside the protective shadow of the familial wing. I myself have been living on my own since I was 18 years old. Now, living on my own at such a young age was fun and exciting, but the path was not without pumps and some serious pitfalls.


It wasn’t until I was 24 years old when I truly understood how to live on a budget. What I mean by that is that I actually sat down and created a very scary Excel spreadsheet of income and expenses in order to get a true idea of how much I was making and spending. Man, was that a rude awakening. It has been three years since I did that initial scary Excel sheet, and I still have it. It is now more evolved and simplified to make my life easier but it is still there, my handy financial wingman.

So how do you live on a tight budget in your 20s? You stop and take stock of how much you ACTUALLY have, how much you’re spending on things you need, want, and see if there is any way to reduce them. For example, when I went through my bills I saw that I was spending a ton on cable. I started out paying a reasonable sum and over the course of the year they must have raised it and I didn’t realize (not cool, cable company!). I called them up and told them I wanted to pay less or I was leaving for another company. As such, we came to a compromise as to the price and the cable package I was to get.


Another trick I live by is using only DEBIT and CASH. I kid you not, I have not used my credit card in months (and when I do, I pay the balance off entirely so as not to drag undue interest on the thing). The reason for the debit card and cash is simple – you feel the money leave your hands/account immediately. Feeling that makes you realize how much you’re spending and makes you question the spending in the first place. Every time I spend some of the money I add it to the sheet I made and keep track of the spending (there is a column for budget and a column for actual spending).

It may seem daunting to constantly keep track and look over your expenses, but it’s the only way you are going to be in aware of how much you are actually spending and learn to be wiser in your spending habits. If you are able, the dream is to actually be able to save some money each month and form some sort of savings account. DO IT! You never know when an emergency, wedding, vet visit or huge electric bill will come your way.