On A Budget? Here’s How To Do It Successfully

Misconceptions about Millennials living on a tight budget and their lose money-spending habits abound online. They have been labelled “lazy, entitled narcissists” and are often accused of “killing industries.” 

Despite the negative portrayal of Millennials as having little care about their future, data shows this generation – born between 1980 and 1997 – is just as discerning about money matters as the Baby Boomers and Generation X who precede them.

“Even though Millennials have had less than 20 years to build their retirement wealth, they are not that far behind many of those who are closest to retirement,” said Dave Ramsey, a leading financial advisor in the US. 

Nearly three in five Millennials have less than $10,000 stashed away for retirement, compared with about half of Baby Boomers who have saved a similar amount and have had half a century to grow their retirement savings, Ramsey said.

Making smart financial choices at a young age, however, entails living within one’s means, especially when money is tight. 

Young people who want to lead a financially responsible lifestyle have a wide array of personal finance strategies and tools available to them – from new forms of investment to money management apps.

For Millennials living on a tight budget, here are five essentials to help you get the most out of your money and enjoy life to the fullest:

1. Apps for budgeting and paying bills

The first step to gaining financial know-how is to set your priorities. Use mobile apps and digital trackers to identify the goods and services you wish to save/spend on then allocate a budget for each, whether weekly or monthly. 

Apps like Wallet or Money Manager help Millennials visualize their money flow and account for loopholes in their budget. Some utility and subscription services also offer billing reminders by email or through mobile notifications to help you stay on track and avoid penalties for late payments.


2. Automated savings

Most financial advisors recommend the 50/20/30 rule for budgeting. This means allocating 50% of your monthly earnings on living expenses; 20% on savings and debt reduction (student loan and credit card); and 30% on leisure or flexible expenses, such as travel, shopping and movie dates. The last item is often where most people blow their budget and eat into the other 70%. 

When you find yourself dipping into your savings or budget for living expenses, it may be time to sign up for an automated savings account. This service instantly takes a percentage off your paycheck and transfers it directly to a separate account where it can earn interest over time. You can assign how much of your earnings will automatically be deposited into this account. 

3. Growing your money

It’s never easy to stay afloat living on a tight budget, paycheck to paycheck. But Millennials who want to escape the cycle of being cash-strapped can always grow their money with simple investments and side hustles. 

Investment – for those on a tight budget – doesn’t solely require financial capital. You can invest time doing activities that will earn you extra cash on the side. For example, if you’re good at graphic design or have a sharp eye for catching errors when proofreading, you can take on freelance projects for a couple of hours on the weekend.

Millennials who want to earn passive income, on the other hand, can invest a fraction of their earnings in stocks. Some companies offer employee stock purchase plans (ESPP) that allow their own workers to buy company shares at a discount.

Investing in the stock market may seem daunting to a Millennial who is only just about to grow their finances, but putting even a little money in blue chip companies can pay off. The important thing is to learn to invest and take a chance once you feel comfortable “letting your money go and letting it grow.”


4. Investing in durable items: gadgets, clothing and home essentials


Anybody can get caught up in the craze over trendy gadgets. For Millennials living on a tight budget and are hoping to save up on personal technology, but who still want top-of-the-line items, buying durable devices from a trusted brand can help them save money in the long run.

A refurbished MacBook, for instance, provides value for money due to its quality and durability. Not only is it cheaper, but it also stays current for years. A refurbished Apple product is cleaned and tested before release. With the hardware in pristine condition, all it takes is for the user to select their OS of choice and the item will be running smoothly fresh out of the box.


Forget fast fashion that easily goes out of style. Instead, build a capsule wardrobe that contains only essential pieces you can mix and match. These include pants that can be worn from day to evening, or a solid color blazer that complements either a smart casual or formal attire. Also invest in shoes, bags and accessories that stay in season and survive the wear and tear of everyday use.

Home essentials

Keeping a happy home means filling it only with objects that, as Marie Kondo puts it, “spark joy” in your life. The best way to live within budget while decorating your home is to limit the number of items that come in and take up space, and to opt for multi-function pieces, such as a Murphy bed that serves as storage or a coffee table that can be extended to become a dining table. Buy only the things you need and find to be meaningful and you’ll be amazed at how much money you’ll save.

5. Staying healthy

Living on a tight budget doesn’t mean short-changing yourself out of a happy and healthy life. It’s all about maintaining a great work-life balance: disconnecting from work when the shift is over, enjoying quality time with loved ones and friends, and savouring a quiet moment amid the chaos of life.

Exercise is a vital part of staying healthy – even when you’re on a tight budget. Invest in a few essentials, such as a comfortable pair of running shoes, as well as a durable yoga mat, exercise ball, or weights. These items won’t cost you as much as a monthly gym membership, but they offer the same benefits when used consistently as part of your fitness regimen.

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