How To Budget: A Budget Breakdown for Twenty-Somethings

Learning to budget effectively and allocate our money is one of the most important skills we can learn. This infographic from Spruuce details how your income should be divided as you get it. It’s a fantastic guide for those who have entered work and want to make sure they’re not left short.

It’s also important to remind you that it’s never too early to be looking after your future self. Start saving for retirement early! There’s no guarantee that they’ll be a state pension by the time you get there so you want to take matters into your own hand. If your company offers a matching scheme, even better! Take advantage of this and you’ll be surprised how quickly it grows.

The same is to be said for your emergency fund. No job is guaranteed so it’s imperative to have a back up fund that would carry you through at least 6 months with no other income. Keep that in mind.

If you’re in your twenties then take this opportunity to start allocating your money sensibly. If you start now you’ll be miles ahead than most and able to relax about thoughts of the future!

budget 20 somethings

Source: Spruuce

Text Version:

How To Budget: A Budget Breakdown for Twenty-Somethings

by Spruuce

15% On Transportation

If you’re spending more than 15%, carpool or take public transportation.

30% On Mandatory Spending

Groceries, Bills, Insurance etc. Don’t spend more than $300 per person on groceries.

30% On Rent

If you’re spending more than 30% on rent, get a roommate.

5% Into Emergency Fund

Put 6 months expenses in to a high yield savings account. After you have 6 months saved, add more to your retirement fund.

5% Into Retirement Fund

401k, Roth IRA etc

15% on Discretionary Spending

Shopping, entertaining, dining out etc. This is the first category to cut into if you have debt.

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