In today’s turbulent economic times, you must have a good financial plan to ensure your own financial security.  The best place to first begin to build a strong financial foundation is with a budget. Make no mistake here. Creating a budget will not make you wealthy in itself.  But, with a budget, you can position yourself for financial security and wealth building. Making a budget is the surest way for you to understand and track your spending. If you are spending too much in one area of your life, you can easily track your expenses with a budget and change your spending habits accordingly. 

So where do you start as a twenty something? If you have not made a habit out of budgeting in the past, then it will be extremely difficult for you to begin budgeting now. I could list everything that you should include in your budget, but if you cannot make it a habit to create and track a budget every month, then that list will mean nothing. You need to create and follow a budget now.

Here are a few different ways to budget that have been successful at getting many people into the habit of creating, keeping, and tracking a monthly budget.

Only Use Cash

To use this method, you must first write out a budget on a piece of paper. Then, get some business envelopes and write a budget item on the outside of each envelope.  Place the amount you have budgeting, in cash, into each envelope.  For example, say you have budgeted $200 towards food for a month, which includes groceries, eating out, coffee shops, etc. Whenever you purchase any of those items, use the cash from the envelope marked “food.”  Once you run out of money in the food envelope, you cannot buy any more food for the rest of the month. 

The point here is that actually seeing and spending cash on hand will actually help you to spend less. It is much easier to swipe a credit card for every purchase than to hand over cash.  There is something so much more concrete about spending cash, and each time you make a transaction, you will see that money slip away. 

This method of budgeting (at least initially) is a good way to understand where your money goes, and it helps force you into more sound financial habit. However, this method is not very practical to use your entire life or even for more than a few months. Simply, it will help you get into a good habit of knowing exactly where your money goes every time you spend it. 

Be Old Fashioned – Use Pen and Paper

This is the method that our parents use—something called pen and paper.  Write down your expected expenses and income each month in a notebook or something else that keeps everything tidy and together.  In your budget, be sure to include big-ticket items that you are saving up for.  If you are saving up money for a down payment on a home, be sure to include that in your budget.  Want a new car?  Put it in the budget.  For each of these big-ticket items, look into opening separate savings accounts at an online bank such as ING Direct.  This will help you keep your savings isolated so you cannot confuse where money is going.

The big draw back with this method is making it a habit.  As a twenty something, it is very difficult to continuously track expenses and income.  It might be fun for a month or two, but the novelty of it will soon wear off.  If you begin budgeting with this method, make sure you are completely dedicated to tracking yourself at least a few times a week. 

Welcome to the 21st Century – Use the Internet to Track Your Budget

As discussed above, the main difficulty with creating and keeping a budget is finding the time to continually update where your money is going.  After a few months of enthusiastic budgeting most people lose interest and fall back to their old ways.

So how do you prevent this from happening? Thankfully today there are many helpful tools out there that will put your budget on autopilot (even though you still need to monitor your spending habits).  Try using an online budgeting website such as This is a wonderful tool that links all of your bank accounts, credit/debit cards, and loans together. On Mint, easy budgeting tool will help you set up a budget and will track spending automatically. Every transaction that you make on your credit card will be it tracked and categorized according to your budget. If you go over budget on something, it can let you know with email alerts where you have overspent. is quickly growing into one of the most used Internet budgeting sites.  It works so well because it can link to just about any money related account that you have, including student loans and brokerage accounts.  And do not be worried about your security on Mint.  Obviously, you should not share your account numbers with anyone, but Mint simply connects to all of your internet accounts using the information that you have provided.  It does not share you information with anyone and could not have become the well-trusted Internet resource that it is without strong security systems in place. 

And that is it with Mint.  You simply create a budget, connect your accounts, and see where you money is being spent.  If you are truly serious about budgeting, you should check up on your Mint account a few times every week.  This will help you monitor your spending habits and will help you hold yourself accountable. 


  • Start budgeting now.  It is one of the simplest steps that you can take to begin to achieve financial security.
  • Only spend cash when first starting to budget so you can really understand where your money is going.
  • If you are having trouble getting in the habit of continuing to monitor your expenses, look into using a tool on the Internet to help you out such as

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