Our top tips on how to budget when you're an adult who wants to eat cake for breakfast and buy too many Jaeger Bombs sometimes.
I personally think we’re in desperate need of a new word for “budget”. It just sounds so incredibly dull - and unfortunately, for the most part, it is. But it’s also entirely necessary. Whether you’ve moved home to save money, or are working out in the big wide world, chances are you’re gonna need to budget.
To be clear, budgeting is as much about spending as it's about saving. Otherwise, this article would just be a sentence that says “spend as little as possible”, but that would be rather miserable.
Budgeting doesn’t have to be so gloomy. In the grown-up world of responsibility, budgets can help you get what you need, even basic necessities like food and shelter.
For some people, this might only be £20 a month, but no one wants to feel like they’ve accidentally frittered away their hard-earned cash. Here are some of our top tips to prevent you from falling into a financial pit of despair.
Don’t compare yourself to others
This is kind of a precursor to budgeting - and is also really hard! Obviously, it’d be nice in life to not compare ourselves to others, but this often proves practically impossible. What you do need to bear in mind though, is that both graduate salaries and graduate living expenses vary SO much. So you might not know anyone at all in a similar financial situation to your own. This can be a little isolating, and a little scary.
While the average UK graduate salary is just under 23K, this figure is actually really misleading. For one thing, it doesn’t take into account the graduates who don’t have jobs or are doing something they don’t get paid for - like internships. You also need to remember that averages are tricky. That one guy you know who graduated a year ago and already earns 56K at Santander can really throw the results. Ok, I guess he probably doesn’t find averages tricky or complicated.
It also depends hugely on the sector and location. When finding a graduate job, it pays to do your research. So be sure to work out exactly how much you need to live, otherwise, you could waste time applying to financially unsuitable jobs.
Get a Monzo card
Nope, this is not a sneaky sponsored post, they’re honestly just the best thing. For those who have been living under a rock- a Monzo card is a free debit card that has a companion app. Gone are the days of foraging around for proof of identity and sitting in a depressing bank waiting room, just set it up on your phone.
Any money spent on your Monzo card is automatically tracked, so you can see exactly where your money is going. Monzo also shows the transactions straight away - so no nasty surprises on a Tuesday morning when you’ve been tapping that contactless all weekend. We already know we spend too much on Uber, Mcdonald's and Jaeger Bombs, but it's useful to know how much you’re spending and on what.
Think about what makes you happy
Now, many top economists and maths-type people wouldn’t include this in their list of graduate budgeting tips, but it’s actually super important. Particularly if you’ve started a first job, or are living independently for the first time, and your budget is super tight.
Graduates often have less money and free time than when they were students. Now is the time to think about what’s best to spend your money on in terms of happiness. There’s no scientific method, you just have to do you.
Really think about how much things cost when you budget - if clothes or wine or gig tickets make you happiest - do it! It’s also a good idea to find cheaper ways of doing what you’ve always done, so look out for cheap cinema screenings and free events. However, this isn’t always the best method.
In “My Buy Nothing Year”, Michelle McGagh spends nothing (apart from mortgage payments, basic food, shampoo etc.) for an entire year. About a month into the experiment she describes “That’s when I realised I had been going about the challenge all wrong. I’d been trying to live my old life for free. Instead, I needed to embrace a different sort of social life”.
While this is a tad more dramatic than graduate budgeting, it’s good advice if you suddenly find yourself on a really tight budget. Keep an eye out for cheap and free things to do, maybe things you hadn’t thought of before, or invite people around and cook for them. Put the value of your free time on the social aspect, rather than the activity.
Set Treat Goals
The meaning of “treat” will vary greatly depending on your financial situation, but it’s always good to set a goal. Even if you’re living at home saving for something big like travelling, it’s good to set little goals for treats along the way. It could be £5 for new nail varnish as a Friday pick-me-up, a new jumper on payday, or saving £10 a week for new headphones.
Saving for something is always satisfying, and a good habit to get into. Just think, you might be saving a little each week for new trainers right now, but if you keep it up as your salary grows. In a few years' time, you could be saving for a new car or a deposit on your own home.
Side Hustle
This one sounds like a lot of work, but there are loads of easy ways to earn a little extra dollar. Some options are more obvious, like putting your old clothes on eBay or Depop, or selling old electronics you don’t use. If you’re a creative person, why not set up a little online shop on a platform like Etsy where you can sell something cute?
If you’re feeling really entrepreneurial, and you’re full of good ideas, why not set up a business on the side? You can start really small, and it’s a fun way to spend your time off from work. Loads of really successful businesses actually started out in people’s bedrooms and garages as side businesses.
You can also earn money doing things like proofreading, in the comfort of your own home. The internet is full of people looking to outsource tasks, so have a search! By this we mean, proofreading someone's essay online, don't go to a stranger's house off GumTree to water their plants. Stay safe.
Don’t Listen to Old People, You’re Doing Fine
Last up - don’t get down reading news articles about millennials. Some people in older generations LOVE acting like we're struggling economically because of laziness or love of avocado toast, rather than because they pulled the ladder up.
This can be super disheartening, but keep in mind that a lot of it is just silly journalism trying to get a scoop. For example, one of the most famous surveys claimed that millennials could save over £6000 per year, by simply “cutting down on one night out a week”. For this stat to be accurate, every millennial must be spending £118 on every single night out and going out a minimum of 52 times a year.
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