When people wonder where young adults spend their money, here's the big answer: Buchanan has over $100,000 in student loans. Here's a look at what Buchanan earns, how she spends it, and what she's learned from her good financial habits. Kelsey Buchanan, outside her home in New Hampshire. "It's not just about saving enough for right now, but for the long term." "You always have to be forward-thinking when it comes to your budget," Hughes says. According to Citizens Bank branch manager Erica Hughes, Buchanan is putting herself on the right financial track by developing a strict budget so early in life. It was definitely a time of stress."īuchanan kicked her budgeting game into high gear, creating a monthly budget and faithfully sticking to it. "I realized I was either going to have to ask friends and family for assistance, or I needed to get a second job. "I was a student paying all my own bills," she says. This reality hit her a few years ago, when she realized the money she was bringing in didn't cover her expenses. She knows firsthand the challenge of budgeting for Generation Z. Those numbers could make anyone's head spin, but they wouldn't surprise Kelsey Buchanan, a 23-year-old art teacher in New Hampshire. On top of that, people under 25 typically spend 24% of their pre-tax income on housing. A third of people in their 20s have student loan debt, which averages about $25,000 for those with a bachelor's degree. The average 20- to 24-year-old American earns $576 a week, or $29,962 annually. It's a time when salaries typically are at their lowest and - given the realities of today - debt and housing prices are high. Sometimes even a combination of both methods can be a reasonable and right choice.The first decade of adulthood may seem relatively carefree, but it poses many financial challenges. There is no right or wrong answer here, just pick the method that fits your particular debt situation. Dave Ramsey is suggesting using a debt snowball method in all cases, but I will offer to consider the debt avalanche method as well. “While, again, no percentage is suggested, suggests to throw everything you can at this super important money goal. “The article ends with the debt category, and suggests allocating the money you are able to save on your spending and from boosted income toward paying off your debt,” Kayikchyan said. “These categories are places to prioritize cutting your budget, especially on your way to building financial security and stability.” Debtĭebt is a burden for almost all of us, so it’s critical to make ample room in your budget to tackle it. “For miscellaneous categories about 5% of your take-home pay is recommended,” Kayikchyan said. The blog highlights that the average American household spends $3,568 a year here, or about $297 a month. Here’s where you can (like it or not) look to cut back. Lifestyle or entertainment, personal spending money and miscellaneous are the next categories discussed. Make Your Money Work for You Lifestyle or Entertainment, Personal Spending and Miscellaneous This will be a good strategy for someone who is using food or grocery delivery services.” But in reality, preparing meals at home versus eating out will save you some good money. For the food category, buying in bulk, couponing and chasing deals is one way to save. “Food, along with housing and transportation, is considered the largest item in the household budget. “While there are no set percentages offered here, the article gives some national averages of what Americans spend on groceries each month: singles age 19-50 spend $314 to $337, couples age 19-50 spend around $685 and families of four spend around $971,” Kayikchyan said. The next budget category discussed in the Ramsey Solutions article is food, and surely we all need that! But food prices have risen at the highest rate we’ve seen in decades. “While this can sound a little controversial and opposed to the ‘pay yourself first’ budgeting method, the article emphasizes giving as a great act and being good for everyone, and recommends giving 10% of income,” Kayikchyan said. Charity is an important part of the human experience, and many people want to allot for it in their budgets.
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