The Ultimate Millenial’s Personal Finance Guide (Part 1: Budgeting)


Dear financially clueless new grad,

Congratulations! You’ve entered the real world. You’re earning a significant chunk of regular income. You want to make sure that income is managed well. But… wait… we were never taught this in school. I’m an econ major and, sure I took an Investment Finance class, but it never really taught me what credit card options were out there or what an IRA was or how to setup my bank accounts!

When I graduated, I had to scrounge several online resources, ask for advice from not so recent grads about how they managed their finances, and even talked to a financial agent at a bank.

Scrounging does not make one a finance expert, but I think I’ve gathered a pretty good chunk of information. Here’s a comprehensive list of things you can start right now to manage your personal finances (+ some additional resources that may help you out). Schools probably caution from teaching this because there are so many preferences that go into personal finance. (They wanna save face). In the end, it all boils down to risk. How much risk are you willing to take? Each item will point to different strategies but these are mere recommendations. You should ultimately be guided by your risk preferences and it’s up to you how extensively you will take these tidbits to heart.

(Psst… This is the 1st part of a 4-part series: 1 – Budgeting2 – Saving; 3 – Investing).


Create a budget and a budget allocation.

This is the #1 thing you must do, so you’re made aware of how much (or how little) money you actually have. There are many ways to budget. More automated kids may want to use Mint and allocate categories from there so it automatically syncs with bank accounts and cards. I prefer to use good ‘ol fashion Excel, following the below steps.

Step 1: Get your monthly income (less taxes.) I recommend breaking your timeframes down to months (e.g. if you have a fixed expense of annual insurance that you pay, divide that amount by 12).

Step 2: Subtract your pre-determined monthly expenses (rent, utilities, phone bill, etc.) The consequent number is how much expendable money you have on a monthly basis. You will do 3 things to this: spend, save or invest.

Step 3: List your spending categories. Mine broadly include “FUN”, “FOOD”, “TRANSPO”, “HOUSING”, “MISC”.

My budget broken down into weeks and months

Step 4: Determine how much you will spend per category vs. keep. If you’re more on the thrifty side (like me) or saving up for something in particular, I suggest choosing how much to save first before anything.

Step 5: With the money you will be keeping, determine how much you will invest vs. save. (More on this in Item #2!)

Step 6: FOLLOW THE BUDGET. Better yet, do better than your budget. Save more. What really helped me was creating a manual budget i.e. I write down all my expenses every week on an Excel sheet. Apps schmapps. The process is more tedious, but the process itself holds me accountable and makes me aware of how much I spend per week.

Step 7: Repeat! I redo my financial budget every quarter or when I get a new income or when I experience a big lifestyle change. Every time I do, there’s new data I can learn from. I get better and better in my allocations as time goes by.

That’s it for budgetting.

Next up, Saving.