Living with a budget allows you to make the most of your money — you will get rid of wasteful spending and have more money to buy things that you really want. The easiest way to stay on budget is to create one on your laptop or on paper. Start with the basics like rent, food, cell phone bill, savings, etc. Keep working on it until you have one that matches the amount of money you make. Then, write down a detailed list of all of your expenses as they come up so you don’t spend more than you make.

How do I know what I can spend?

It is very important to know how much money you earn or receive every month. The most basic rule of making a budget is not spending more money than you make or you will fall behind with your bills and may begin to owe others.

How do I keep track of my spending?

Pay attention to where your money goes. Keep track of all spending, even small amounts. From there, identify which items are “need items” (food, rent, basic clothing, gas, etc.) and which items are “want items” (movie tickets, sneakers, video games, magazines, etc.). “Need items” should always come before “want items.”

Consider a few things before you spend:

• Take a small amount of cash with you. The less cash you carry, the less you can spend and the less you lose if you misplace your wallet.
• When you go shopping, make a list and do not buy anything not on your list.
• Always research before you buy something not on your list and if the item is more than $50. If you wait a few hours or a few days, you may change your mind about buying it OR you may be able to find it somewhere for much less! Look at other stores or online.
• Consider buying a less expensive brand of the same product. For example, buying used items can save you a lot of money and they serve the same purpose. You can get used clothes, games, DVDs and music at second-hand or thrift stores.
• Consider the use of the product. If you only need to use it once or twice, borrow instead of buy. You may be able to borrow something from a friend, like a movie or video game, or you may even be able to find it at a library.
• You bought it, maintain it! Take care of your belongings so they last longer.

Why is it important to save?

Saving money may not be as much fun as spending money, but it is still important to do. Develop the habit of saving money now while you are young, so you have more money to spend on big things (like a house or new car) at a later time. Small savings account can get big over time! Even putting a small amount of money into a savings account every month will wind up to be a lot later! For example, putting $20 in your savings account every month for 5 years adds up to $1,200! More tips on money management.

Set goals!

Saving money over time will help making large purchases easier. Instead of needing $500 all at once for a television next year, plan to save $50 a month for 10 months and then buy it. You will save yourself thousands in unneeded interest payments.

Cut back, not out!

If you are spending $20 a week on snacks, try cutting back $5 a week. After a year you’ll have $720 to put into your savings account. That much closer to a new computer or a down payment on a car!

What is a budget and how do I budget my money?

As a young adult with limited money coming in every month, it is important that you first spend your money on what you NEED. You need to pay your rent, utility bills, your transportation costs, food, BEFORE you buy things for you may not need. Use a spreadsheet to track what money you earn and your monthly expenses and keep it current every month. More tips on financial planning.

I saw a great deal on a gym membership (or a cell phone, or a cable service, or an apartment), should I spend my money on it?

When you are deciding where and on what to spend your money, be careful about jumping into contracts and purchases when the offer sounds too good to be true. You may find that there are surprises that you did not know about and you did not think to ask about before signing. Read the fine print before you sign anything. Better yet, call the Alliance and ask our lawyers review the deal…before you sign on the bottom line.

How do I pay bills every month?

Most bills can either be paid by mailing in a check, giving your credit card number to the business over the phone, or paying online through the company’s websites. Directions for paying the bill should be included with the bill you have received.

How do I stay organized?

When you live on your own, you are now responsible for keeping track of your bills and other important documents. It could be helpful to create different file folders, each one to hold your different types of papers. For instance, make one folder for your credit card bills and one for your Medi-Cal receipts.