Picture this — you’re in your 20s, either fresh out of college or just entering the workforce. You’re living in the city you’ve dreamt about but are barely making enough money to socialize with friends, let alone pay rent, go grocery shopping, or make meaningful progress on your student loans.

woman doing finances

Perhaps the biggest mistake young adults make when planning for their future is not starting to think about it early on. A good first step is to create a budget for yourself. The principle is pretty simple: First, find out how much income you’re earning each month; then, determine how much you’re spending and what you’re spending it on after you pay your rent and utilities. Actively tracking your spending will help you realize where your money is going, so you’re not surprised if you run out of cash. It will also help you identify ways you can cut down on spending in certain categories. Even saving the $5 you spend on coffee on your way to work is a great start.

Planning out your living expenses, credit card payments, and daily life doesn’t have to be stressful. Take the first steps toward a positive financial future with these simple tips.

1. Prepare for expenses you hadn’t considered. In order for a budget to work, it has to account for everything you spend money on. This includes little things like parking lot fees, late-night drive-thru meals, and random convenience-store purchases. Like to go to the movies on the weekend? Add it to your budget. Tend to drop a few bucks on cold brew or pressed juice each month? Include those as well. With personal finance apps, such as Mint, you receive personalized recommendations on where you should cut back based on your current spending habits.

2. Put on a chef’s hat. Cooking your own meals on a daily basis can save you more money than just about any other change in your behavior. Knowing how to make five basic meals (say, chili, tacos, chicken and vegetables, spaghetti with marinara sauce, and a slow-cooked roast with veggies), and having a microwave handy for reheating leftovers, can cut your food expenses in half. An added bonus: Homemade food is almost always healthier than eating out.

3. Turn off all of the lights. Get into the habit of turning off (or even unplugging) lights, appliances, and electronics when you aren’t using them. And consider getting a programmable thermostat to keep heating and cooling costs down.

4. Be smart with your credit. Carry only one credit card, and commit to using it only in absolute emergencies. We’re not saying don’t build your credit; using cash or a debit card for day-to-day expenses prevents you from overspending (and thus helps your savings!). But overusing your credit card allows those pesky budget-busting interest charges to soar. With apps like Turbo, you can look at a holistic view of your financial health, including your credit score and debt-to-income ratio (DTI). This can help you make smarter financial decisions.

5. Explore other venues. Consider all of your transportation options. Do you really need to drive everywhere, particularly if you have to pay for parking once you get there? And with Uber, Lyft, Via, and other ride-sharing services now widely available, city dwellers might even consider ditching their cars completely. The cheapest gallon of gas is the one you don’t use.

What are your best money-saving tips? Share them with us @BritandCo.

(Photo via Getty)