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

Misconceptions about millennials living on a tight budget and their loose 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 such as SideBy and Mint.

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. 

How much savings do Millennials have?

A suprising fact, millennials in general started saving earlier than other generations, yet despite this, millennials have been found to have less wealth than their parents did at their age. A Bank of America report has found that Millennials began saving for retirement in their 20s, while the previous generation before them began in their 30s. 

This report found that while close to 80% of the respondents were saving, nearly 50% were saving monthly, whether this was for a home, emergency fund or for retirement in the future. A quarter of those who took part had over $100,000 tucked away, that is close to 72 thousand pounds 

But what if you have yet to begin saving? It is never too late to begin saving and with these budget tips for millennials here, read on to learn how to begin budgeting and saving. 


What are some good budgeting tips for millennials?

1. Apps for budgeting and paying bills

The first budget tips for millennials to gain 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 maybe 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.  Pay of credit card debt first 

Another top budget tips for millennials and that is to clear your credit card debit before you begin to tackle any other forms of debt. Other forms of debt can include student finance. By paying off your debts with the higher interest rate, you can be confident that any extra nasties are cleared and that allows them to focus on saving. 

Whether you choose to do this gradually through the 50/20/20 budgeting rule, or in one large lump sum. By clearing your outstanding debt, you can set yourself on a good financial path and put your full focus on steadily saving.


5. Start saving small

When it comes to budgeting and saving money and investing in the future. One of the biggest tips and that is to start small. No matter how small you start, making frequent and regular savings is important. Along with regularly contributing to your savings, you are also creating that habit or adding to your savings. 

If you are saving into a savings account or isa with an interest, those small savings although might seem small will add up over time. 

6. Divide bills fairly 

Another top budget tips for millennials and that is to divide bills fairly. If you are living with a partner or in a shared household, divide bills fairly and evenly. This allows everyone to pay what they owe and gives everyone the opportunity to begin sorting their finances out. 

One important point that should be noted for those wanting to save to increase their credit rating and that is to be wary of joint bank accounts. Opening a joint bank account or taking a mortgage out with someone with a poor credit rating could affect your credit score. Your rating, no matter how high will be ‘co-scored’ when you apply for credit in the future.

To avoid and prepare for the potential effect of combining your finances and that is to individually check your credit ratings before. 

7. 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.


8. 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.

9. Plan for retirement 

With retirement planning becoming more and more important, this awareness for planning for the future is one that is at the forefront of many savers’ agenda. In the UK you automatically benefit from state pension through the contribution of national insurance for 35 years or more. But for those wanting to live comfortably in their later years, a private pension should be considered. There are many types of pension schemes from state pension through to defined benefit pensions.

Why should you start planning for your retirement now? The more money that you can save and put away, the more financially secure you will be and the more comfortable your retirement will be too. 

There are many different ways that you can begin to prepare for your retirement. You can do this by contributing more into your work pension plan, creating a lifetime Isa, and opening a private pension with a higher interest rate that you can put into. Whichever option that you choose, it is recommended that you employ the services of a retirement and pensions advisor who can take a look at your individual circumstances and recommend the best option to help you save for your future. 

10. Stay motivated

Our final of our ten tips for budgeting for millennials and that is to stay motivated. There will often be times while saving can seem like hard work, and you will feel tempted to give up and take your budgeting less seriously. When times get tough, remember that all this hard work is worthwhile and that you are saving for bigger and better things while creating a security net around yourself in case something awful was to happen.


There you have it, our ten top budget tips for millennials. Whether you are intending to start saving an emergency fund, save for your future or for a house, it is never too late to start saving. From clearing up your outstanding credit card debits, to beginning your saving journey by starting small, small and often contributions can have a significant impact. Even investing in durable items that are long lasting can play dividends to your saving budget and ensure that you can continue adding to the savings pot which will only add up over time. 

Have you started saving and budgeting your monthly allowance? We would love to hear from you, so please comment below and share your experience with us.

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