Financial Milestones You Should Be Starting In Your Early 20s

Create A Budget And Be Realistic About It

A budget tracks where the money goes every month, and individuals without one can end up in debt, broke, or both, including high-income earners. Sometimes individuals make the mistake of trying to squeeze too much into a budget or setting themselves an impossible savings goal. The key is determining what you can realistically afford, not what you wish you can afford.

To create a budget, first determine your final take-home pay, but be careful about overestimating. After this, track your expenses, including all fixed expenses, such as rent, car payments, insurance, utilities, Netflix, and gym memberships. List variable expenses, items such as groceries, gas, and entertainment, next. Once you have done this, list your goals, such as saving for emergencies or vacations and then make a plan to reach these goals. If you can't reach a goal as quickly as you like, look through your budget to determine if there are other areas where you can save.

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