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Do I really ned to budget in my 20s?

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"Ask Brianna" is a Q&A column for 20-somethings, or anyone else starting out. I'm here to help you manage your money, find a job and pay off student loans – all the real-world stuff no one taught us how to do in college. Send your questions about postgrad life to askbriannanerdwallet.com.

Question: I've heard I'm supposed to create and stick to a budget, but that seems complicated and time-consuming. Do I really need a budget in my 20s?

Answer: It is, unequivocally, a good idea to have a plan for how you spend your money. With a budget, you won't spend your whole paycheque – after you've paid rent and bills – on dinners out and Amazon impulse buys. You'll be more likely to set money aside for future needs, like retirement and emergencies.

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Some swear by a certain budgeting app or a painstakingly colour-coded Google Sheet. But budgeting doesn't have to mean tracking every expense and cutting out the little things that make you happy. Even financial advisers understand that can be restrictive and hard to maintain.

"I always equate the word 'budget' to 'diet,"' says Mindy Crary, a financial coach at Creative Money in Seattle, Washington.

Instead, think about budgeting as a way to set goals for the things you want to do in the future, a way to put your money to work. One approach: Get a handle on the expenses you can't avoid; come up with a dollar amount you want to save every month; then spend the rest as you please. Here's what that looks like in three easy steps.

STEP 1: LOWER YOUR FIXED COSTS

"When thinking about budgets, people usually default to thinking about how to cut their everyday consumption," says Hui-chin Chen, a financial planner and co-owner of Pavlov Financial Planning in Arlington, Virginia.

But buying a cup of coffee every day will not bankrupt you. Living in an apartment, driving a car or making a student loan payment you can't afford is more problematic.

Some expenses are easier to trim than others. Federal student loans come with income-driven repayment plans that will let you pay a certain percentage of your income each month to keep your bill affordable. Stick with roommates, and hold off on moving into a luxury apartment building if that would increase your housing costs to 30 per cent or more of your income.

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STEP 2: FOCUS ON SAVING

You don't have to account for every penny you shell out. Another way to make sure you don't overspend is to come up with a savings goal first, then back your way into a budget that allows you to hit that goal, Crary says.

Some of your savings should go to an emergency fund until you've got at least $500 put away for unexpected expenses, such as medical costs or car repairs. Some must go toward retirement; contribute at least enough to meet the employer match on your 401(k), if one is offered, or start to beef up your IRA. The rest can go to a savings account that you'll use to hit other goals like travel or a down payment on a house. The amount you have left over is often called "disposable income," or what you can spend on nonessential expenses, like shopping and entertainment.

"As a starting point, if you have never really thought about it, setting up an automatic deduction from checking into savings is a good way to test out your budget and lifestyle," Chen says.

STEP 3: RE-EVALUATE

If you can't save any money, it may be that you simply can't live on the amount you earn. Consider adding to your income by hitting the LinkedIn circuit in search of a higher-paying job, or look into temporary side gigs in the meantime.

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You can also take a look at last month's bank or credit card statements and consider making changes if there's a particular area of spending that is really out of whack. The changes can be behavioural rather than based on dollar amounts, Crary says: If you went out to eat 15 times, try to go out seven times next month instead.

No month of spending will be exactly the same. You can't always plan ahead for a friend's birthday brunch or a stolen bicycle tire. Focus on maintaining balance instead. Aim to take the stress out of budgeting, and you might find you like knowing where your money goes after all.

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