Budgeting Tips for Young Adults

Young adults may be excited if they get their first job or if they are given an allowance. They may feel more independent and like they have a say in how they spend their money. Money comes in fast and goes out quicker. Alexander Djerassi knows how difficult it can be to hold on to money for young adults. Djerassi has some budgeting tips to help young adults learn to use their money wisely.

Develop Self Control

This is something that can be hard for a young person. Part of being an adult is spending money wisely so now is the time to practice. If a young person sees something they want they should not purchase it right away. They should wait and think if they really need it. If the item costs more money than they, they need to save up for it.

Track Spending

This is an important part to see where money is being spent. A young person can keep their receipts, or they can keep a running log of where their money is going. They will be able to learn their spending habits. There are also apps that can help with budgeting. This will help a young person learn if they are overspending and where the money is going.

Use the 50/ 30/ 20 Rule

This is a system that can help a young person learn to be responsible. This will help them learn how to budget and make sure they have enough money for essentials. Fifty percent of the money should be set aside for bills. This can include the cell phone and car insurance. Thirty percent of the money can be used for wants and entertainment such as going out with friends. The other 20 percent of the money should be put into a savings account. This will help a young person learn how to save for an emergency and make sure they have the money to cover it.

Read About Taxes

Income tax and preparing tax returns is something that adults struggle with. When a person is young, they should learn some information about income tax and how to file. They may be claimed as a dependent by their parents, so it is okay for them to have some help. They should with assistance file their taxes on a software program and learn the different tax terms.

Watch Credit

If a young person is able to get a credit card they can have a good learning experience. They need to learn that the bill will come at the end of the month and it will need to be paid. They can learn the importance of reasonable spending and how much money they owe. If they max out their card and cannot make the payments this can impact them for many years to come. These are some tips from Alexander Djerassi to help a young person with their budget. Once they have money of their own they need to begin to learn how to be responsible with it and use their money wisely.