Your second decade promises increased independence, and the freedom of proper adulthood along with its own unique challenges such as supporting yourself, choosing a career, and finding suitable continuing education, just to name a few.

Often, these freedoms and challenges go hand-in-hand, and you’ll find them co-existing. That in a nutshell, is the source of all the excitement and fear of life in your twenties.

But in navigating all the ups and downs of early adulthood, the majority of us will emerge from our twenties with some valuable life skills under our belts. If living within a budget, managing your own rent and big loans, and generally taking care of yourself in a sustainable way are realities you find daunting, continue reading our introductory guide to the art of financial self-reliance, with our guide for twenty-somethings on budgeting and some other vital life skills.

Life In Your Twenties: Expensive & Exciting

When you move out of your family home, you'll have several recurring expenses entirely unfamiliar to you, alongside all the new experiences you’re having.

You'll be cooking for yourself and paying rent for a dorm, apartment, or house with roommates. You'll have regular transportation expenses like used car finance loans, fuel costs, or public transit fees. And suppose you're going to college or trade school. In that case, you'll likely have student loan payments, and need to cover additional education-related costs for textbooks and a personal computer.

Finally, there are the expenses for leisure and entertainment-related activities, and unexpected costs such as auto repairs, new clothes, toiletries, and miscellaneous discretionary spending. You'll need an income source and a budget to manage these financial commitments. But where do you start?

Money Management

You need a spending plan to wisely dictate daily monetary choices based on your personal income and cost constraints. Think of it as your financial roadmap. In your twenties, this is crucial to automate your choices, and help you avoid debt.

Many people are experiencing stress related to the cost of living. A self-imposed agenda gives you a framework for instilling good habits early in life. This allows you to maintain control over your funds and begin to save for the future, where you may have plans to travel, buy a home, start a family, or invest in further education.

Budgeting Steps

So how do you budget exactly? Well, it’s actually as easy as taking three measured steps.

First, calculate your monthly after-tax income. Include contributions from your family, your main job, and side hustles such as freelance or part-time gigs.

Next, list your monthly expenses and categorise them into fixed (such as car finance and student loan payment) and variables (like food, fuel, and nights out) subclasses. An important point regarding costs is to distinguish between "wants" and "needs," the latter being absolutely essential, like living space, as opposed to discretionary, like a takeaway latte.

Then, make a habit of setting financial goals, both short-term and long-term. These might be satisfying a debt, saving for a new laptop, or building an emergency fund. And repeat these steps every few months or in the event that your earning potential or even your financial goals change at all. That way, you can make sure that your budgeting and the purpose behind your budget stays current.

How To Do It: A Simple Framework

One way to budget is to use the 50/30/20 rule. Reserve 50 per cent of your income for non-negotiables like rent, food, and utilities. Allocate 30 per cent for shopping, eating out, or other discretionary costs. The final 20 per cent goes toward savings and debt repayment.

To keep track, use a tool that you're familiar with, perhaps a spreadsheet or a budgeting app. Be realistic and use numbers that align with your current income amounts and lifestyle habits. Periodically review this information and consider where adjustments are needed.

Be flexible and realise that life circumstances sometimes change despite our best intentions. As long as you’re recording your income and your expenses, you’ll have a better positioning on how to handle and adjust to these situations that crop up from time to time, like an unexpected period of employment, or a large family or friend celebration that involves heavy spending.

Young Adult Life Skills

Being self-sufficient means developing the capabilities to look after yourself independently. Whilst college and uni may have offered an introduction to living outside your family home for the first time, learning how to develop your skills for a healthy, productive lifestyle is essential, both for saving money, and for maintaining your overall well being.

Cooking: Learn The Basics & Then Get Creative

It sounds somewhat obvious, but you must learn how to nourish yourself independently. It's not financially sustainable or healthy to rely on fast-food and microwave meals. Invest the time to learn how to cook nutritious yet straightforward meals at home.

You'll save significant money and learn a lot about yourself too. Cooking requires a mix of artistry and technical skill that carries over into other parts of life. Start with basic recipes and buy second-hand pots, pans, and utensils to get going, or ask what spares your family can lend you.

Once you've mastered the basics, try slightly more complex dishes to increase your confidence and repertoire. You can also learn new recipes with videos, joining a local cooking club, or learning from your friend’s signature meals.

Lifestyle: Develop Good Habits Now

Adjacent to healthy eating is practising a healthy lifestyle. Indulge in regular exercise, or weightlifting, or yoga, and make ample sleep a priority to improve your overall happiness and productivity. Developing these habits now will make them easier to maintain throughout your life.

Next, learn about effective communication. Along with public speaking, writing is a vital skill that will bring personal, educational, and professional success, no matter which industry you choose. Join a club or community to actively refine these abilities, both for your professional and personal development.

Juggling full-time studies, a job, and a social life can be hectic and lead to burn-out, so practical time-management skills are vital. Learn the art of prioritisation, setting short-term goals, and deciding which tasks or leisure activities can wait. This will benefit you in all areas of your life.

Stay Resilient

Finally, remember that life will include many setbacks and challenges. This is true for anyone navigating the triumphs and pitfalls of adult life, so know that you are not alone. Always keep a positive outlook and see your failures as opportunities for growth. Don’t let setbacks get you down, they’re a necessary part of maturation. Rely on your foundation of family and friends to learn from mistakes, adapt, and implement solutions.

The truth is that we’re all figuring it out, but with these tips on budgeting and self-sufficiency, you should feel more confident to tackle the day and know how to look after yourself in the tougher times, as well as the great ones.