Personal Finance For Low-Income Twenty-Somethings

If you know what you can afford, it is easier to ball-out and flex.


I don’t make a lot of money. I work as a barista for 30 hours a week and it’s enough to pay my bills and not very much else. When you don’t make a lot of money, it becomes very important to know where that money is going in order to make sure you are getting the most value for what you’re spending.

Know Where Your Money Is Going

Tracking your expenses is the first step to see where you can make cuts. I use Mint, an online service that links your bank accounts and tracks your spending for you. I like Mint because it’s hands-off. I don’t have to do very much to get a report of where my money is going. My account currently looks something like this:

Screenshot 2017-10-24 at 10.06.48 AM

What’s great about Mint is that it does an excellent job of analyzing your spending for you. It makes comprehensive graphs and budget guides based on your expenses, and saves you a ton of time. However, there are some of us that like a more DIY approach. For a while I just kept all of my receipts and logged them into a Google Sheet. This is a useful approach if most of your transactions are made with cash, or if there is so much chaos in your life that Mint doesn’t return meaningful feedback. I downloaded a manual income tracker for my phone which allowed me to make my own categories and log my spending manually. It was time consuming, but gave me more control over how I saw my spending.

Make Projections

Once you know how much money you are making, it helps to sit down and predict what you’ll be spending your money on. This is hard to do, especially if you’re starting out and don’t really know how much you should be spending in any given area. It takes practice to know what kind of spending is sustainable. I used to spend a ton of money on coffee and sushi, not necessarily because I was stupid but because I didn’t realize there were better ways to spend my money. After going broke over and over again, I managed to figure out there are ways I can be happy if I think ahead rather then waking up and reacting to my needs that day. Below is what my projected expenses look like.

Screenshot 2017-10-24 at 10.18.03 AM
FYI “Treehouse” is the payment I make for an online service, not rent I pay for canopy real-estate.

The purpose of plotting out projected expenses is to make sure you get your basics covered. Notice that a lot of this is stuff that I know I’m going to be charged for. This way I can see how much extra money I have for incidentals. This month I bought some assorted furniture, which are necessities but one-time purchases, and don’t really make sense to predict. I like to think as projected expenses as my heart-beat. These are the constants that I can expect.

I also make sure I low-ball my estimates for projected income. This is general good practice, because sometimes you are going to call out sick from your job or not make as much money as you anticipated. By saying that you make a little bit less then you actually do, you actually are making smarter decisions about allocating your spending. And extra money feels that much better when it comes. However, if your estimates are too low, you aren’t going to get accurate results.

Start Saving

Saving is a pain, especially if you don’t have any money to begin with. I tried squirreling away funds when I was a bookseller, but I ended up always having to use it for incidentals. If you are living paycheck-to-paycheck, it is worth trying to change your situation in order to get more financial wiggle room. This may mean cutting unnecessary expenses, finding a cheaper place to live, or getting a higher paying job.

I use an app called Qapital for my personal savings. I love this app, because it links to your bank account and automatically saves small amounts of money as often as you tell it to. Currently, it rounds up my change and puts it in a rainy-day account. Whenever I get my paycheck, it puts 5% of it into the same account. Furthermore, whenever I tweet with the hastag #hollerforadollar, the app puts one dollar in my account. There are a lot of fun rules you can set for saving using Qapital, and the app provides for a lot of flexibility. There are similar apps out there (like Acorns, for example) and I suggest doing some research and seeing which one works best for your needs.

A glimpse into Qapital in action.

Onwards & Upwards

Right now I’m trying to figure out the ins-and-outs of my 401(k). I have money left over from a previous employer and am trying to rollover the money into a new account. I don’t know a lot about 401(k), IRAs, or investing, but I’m doing a lot of reading and research to get a grasp on the topic. Personal finance is one of many things that you practice and get good at. Realizing the value of budgeting and thinking about your accounts can help you plan for the future, which is a good enough reason to start today. This way, you don’t have to panic when life suddenly demands $1400 when you only have $10 (this actually happened to me). As a good friend told me, making peace in certain areas of your life creates space for introducing chaos. If you know what you can afford, it is easier to ball-out and flex.

Author: connorthemiller

Connor Miller is a writer, personality, and web developer currently living in Seattle, WA. He spends most of his time reading and writing in cafes around town. You can follow him on Twitter @ConnorTheMiller.

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