Budgeting For Millennials

When I first graduated from college, one of my major concerns was budgeting like an Adult™. I was following a money health blog (God, I was such a nerd), keeping track of my spending in a notebook and on an app, and had just applied for my first credit card. I felt like I was taking all of the right steps to keep up with my financial health, but I found myself endlessly frustrated because I wasn't hitting my financial goals.

Then I had an epiphany. As much as I loved that money blog (which has since been eaten by a pay-for-play money management service and turned into a glorified email newsletter), it catered to women far, far outside of my tax bracket. For a recent college grad, the percentages and money goals outlined in simple bullet points just weren't going to cut it.

I updated my budgeting system for my Millennial bank account — and voilà, progress.

According to my old notes, a typical household budget "should" be broken down as follows: 25% to housing (rent, utilities, and applicable bills), 15% to food, 15% to childcare, 10% to transportation, 10% to savings, 10% to tithing (lol), 5% to personal things (like clothes, fun, and avocado toast), 5% to medical expenses, and 5% to miscellaneous (emergency funds, that kind of thing).

There are a few things wrong here — first of all, in this economy, rent ALONE accounts for at least 25% of the average Millennial's monthly income. Also, given that most families are waiting until their mid-thirties to have kids now, childcare costs are kind of a moot point. And 5% for medical expenses?! Who has the health insurance for that?! (I'm not even going to mention the tithing thing — as previously outlined, "lol.")

This is my monthly budget page for February of 2018. For a while, I went hardcore. I made charts, I tried coloring in progress bars, I set savings goals and bank account limits in my virtual wallet. For the first three months of 2018, I made a crazy spreadsheet in my bullet journal where one dot-grid equalled $7 and I had to color code every purchase I made in divisions of 7. (Then I realized that was completely crazy, and stopped.) The categories here were nice, but I was consistently spending "wrong" in all of them.

One of the most helpful things I did to help me figure out my spending was put text and email alerts on my credit card and debit card. Now, every time I make a purchase or get a direct deposit for more than $1.00, I get an instantaneous email AND a text message that says, "Hey, you just bought something." For most people, this is nice to reduce credit card fraud. For me, it helps me keep a low-key tally of how much I'm spending. I don't need to calculate all my receipts to know that I'm spending too much if my cell phone's going off every ten minutes.

With everything I tried, it's taken me a long time to iron out my budget, but in the last six months or so I've seen a reasonably static breakdown. If you're operating on a low budget, my spread might help you plan.

30% - Housing/Survival 15% - Food 15% - Transportation 15% - Personal 10% - Savings 10% - Piglet 5% - Miscellaneous

The thing to remember about my breakdown is that it is FLEXIBLE. If I don't meet one of my goals, or underspend in another, I don't need to apologize to my ancestors and sacrifice myself on my own sword. These percentages are fluid, and so are the categories themselves. Some notes:

• In this model, I bundle up a LOT of things into my "Housing/Survival" category. Rent, utilities, my phone bill, my Internet (because I work from home, not because I'm a meme addict), and things like security-deposit-protecting-carpet cleanings all go into this category.

• When I lived in Washington, DC, my food spend was more like 20% of my monthly income, simply because the food prices were exorbitant and the only grocery store within two miles of me was a Whole Foods.

• For transportation, I've budgeted a whopping 15% because I have an exorbitant car payment, car insurance, and no public transit system in Naptown. My gas costs have dropped significantly since I started working from home, but when I was commuting an hour and fifteen minutes across Maryland for a while, they were sky high.

The rest gets a little tricky, since all the costs here are variable. 10% is a lofty goal for savings (I think in the last six months I've averaged somewhere around -17% just because I've been so very, very broke and kept having to pull money OUT of savings instead of putting any IN), and my dog's costs don't always take up a huge portion of my monthly bills. Sometimes, though, when she's up for shots or I need to buy a new three-month supply of food, her bills skyrocket. (See my previous post about puppy PTSD if you need more background on that.)

The most iffy costs on here are personal and miscellaneous. I buy concert tickets like they're boxes of macaroni and cheese at the dollar store. Live music is pretty much my only hobby, and I arrange my life around the next show, the next festival, and the next set of tickets. And in making my first budgets, I somehow forgot how big a part of my lifestyle live music is. I always felt like crap for over-spending on concert tickets and not meeting that particular budget goal when I was under in many other categories. And then I realized — It's not like buying concert tickets was causing me to be late on rent or miss a car payment. I've always made it work. So even though the budget was "broken," it was still working out every month. I just needed to add money to my budget specifically for fueling my addiction, and it would all be hunky-dory.

Once I changed things to be more fluid (considering that my "budget" for myself, my dog, and my savings/emergencies add up to about 40% of my monthly income, they all borrow from or add to each other depending on the month), things got to be a lot easier. And I also FELT better about myself because I wasn't failing to adhere to a random budget I found online — I was meeting the budget I set for myself, and that's what mattered.

If you're struggling with budgeting, the most important thing to remember is that no size fits all. You're probably not budgeting 10% of your monthly income to my dog. Maybe your big spend is designer shoes instead of concert tickets. But unless you're maxing out your credit cards on that next pair of Louboutins, you may not need to sacrifice something you enjoy just to fit in a "traditional" budget.

The way I did all this was by looking at my actual spending every month, comparing month to month for half a year, and making a baseline budget that I adjusted as needed. I stopped beating myself up for buying things on the Internet (who DOESN'T need a pineapple hoodie and sweatpants combo?), I planned for my concert tickets, and I budgeted out exactly how much I could spend on monthly payments when it came time to buy a car.

I still close my eyes and click "purchase now" on the occasional Grubhub order, but I'm doing okay for myself. My lights are on. I have heat. I have a happy dog and two music festivals on the calendar for this year. And as a 22-year-old surviving in this economy, that's pretty dang good.