Managing money in your 20s and early 30s can be overwhelming, especially with the pressures of rent, bills, student loans, and the desire to enjoy life.
There’s also the fact that wages are stagnant, high-paying jobs are scarce, and everything is way more expensive than it was for your parents’ generation. In other words, there’s not a lot to go around. However, that doesn’t mean you can’t still put a little bit away for a rainy day, so to speak. Making a few small, consistent changes can have a big impact on your financial situation — try these on for size.
1. Create a realistic budget and stick to it.
A budget doesn’t have to be restrictive — it’s a tool to understand where your money is going. Track your income and expenses, and set spending limits for different categories like groceries, entertainment, and transport. Apps like cashew or YNAB can simplify this process. Having a clear picture of your finances helps you avoid overspending and plan for your goals.
2. Embrace the 50/30/20 rule.
The 50/30/20 rule is a simple way to allocate your income: 50% for essentials (rent, bills, groceries), 30% for wants (dining out, entertainment), and 20% for savings or paying down debt. If 20% feels high, start with what you can manage and increase it over time. Finding a balance helps you cover your needs, enjoy your life, and still build a financial cushion.
3. Automate your savings.
Set up automatic transfers to your savings account each payday, even if it’s a small amount. Treating savings like a non-negotiable expense ensures you’re consistently putting money aside. Over time, these small amounts add up and provide a safety net for unexpected expenses or future goals.
4. Cut back on unnecessary subscriptions.
Streaming services, gym memberships, and delivery apps can quickly eat into your budget. Review your subscriptions and cancel anything you rarely use or can do without. Even cutting back on one or two services can free up extra cash each month. Make sure you’re only paying for things that genuinely add value to your life.
5. Shop with a list and stick to it.
Source: Unsplash Impulse purchases, especially when grocery shopping, can blow your budget. Always make a list before you go and stick to it. Doing this helps you avoid buying things you don’t need and reduces waste. Shopping with a plan also allows you to take advantage of sales and discounts on items you actually use.
6. Meal prep and cook at home.
Eating out or grabbing takeaways can add up quickly. Cooking at home and preparing your meals in advance can save a significant amount of money. Plan your meals for the week, batch-cook where possible, and pack your lunches. Not only is this more affordable, but it’s often healthier too.
7. Use cashback and rewards programmes.
Take advantage of cashback apps, loyalty cards, and reward points on your purchases. Apps like Rakuten, Honey, or your bank’s cashback programme can help you save money on everyday expenses. Just make sure you’re not overspending to chase rewards — use these programmes on things you were going to buy anyway.
8. Buy second-hand whenever possible.
Thrift stores, charity shops, and online marketplaces like eBay or Facebook Marketplace can be treasure troves for clothes, furniture, and gadgets. Buying second-hand not only saves you money but is also more sustainable. You can often find high-quality items for a fraction of the original price.
9. Limit your use of credit cards.
Credit cards can be helpful for building credit, but it’s easy to slip into debt if you’re not careful. Try to use credit cards only for purchases you can afford to pay off in full each month. If you’re carrying a balance, make paying it off a priority to avoid high-interest charges. Managing credit responsibly helps protect your financial future.
10. Find free or low-cost entertainment.
Having fun doesn’t always have to cost a lot. Look for free events, outdoor activities, museums with no entry fees, or community gatherings. Many cities offer festivals, movie nights, or workshops that won’t break the bank. By looking for budget-friendly entertainment, you can still enjoy life while keeping your spending in check.
11. Negotiate your bills and expenses.
Don’t be afraid to call service providers to ask for better deals. Whether it’s your phone plan, internet, insurance, or utilities, there’s often room for negotiation. Research competitors’ offers and use that information to negotiate a lower rate. A few phone calls can result in savings that add up over the year.
12. Set savings goals and celebrate milestones.
Having specific goals, like saving for a holiday, a new laptop, or an emergency fund, makes it easier to stay motivated. Break your goals down into smaller milestones, and celebrate each achievement. Whether it’s £100 saved or £1,000, acknowledging your progress keeps you inspired to stick with your saving habits.
13. Practice the 24-hour rule for purchases.
Before making non-essential purchases, wait 24 hours. This pause helps you decide if you really need or want the item. Often, the initial impulse fades, and you realise you can do without it. This habit helps reduce unnecessary spending and makes you more intentional about where your money goes.
14. Build an emergency fund.
An emergency fund is crucial for handling unexpected expenses like medical bills, car repairs, or job loss. Aim to save at least three to six months’ worth of living expenses. Start small if you need to — even having £500 set aside can be a lifesaver. Knowing you have a safety net reduces financial stress and gives you peace of mind.
15. Educate yourself about personal finance.
Source: Unsplash Knowledge is power when it comes to money. Read books, listen to podcasts, or follow financial influencers who provide practical advice. Understanding concepts like investing, budgeting, and debt management empowers you to make smarter financial decisions. The more you learn, the more confident you’ll feel about managing your money.
