best household budget percentages new york times

The Best Household Budget Percentages for Young Adults

Creating a budget is essential for anyone looking to manage their finances effectively. However, young adults often face unique financial challenges that can make it difficult to stick to a budget. In this article, we will explore the best household budget percentages for young adults and provide tips on how to create a successful budget.

As Kelsey Buchanan, a 23-year-old art teacher in New Hampshire, learned firsthand, creating a budget is crucial for managing debt and achieving financial stability. Buchanan had over $100,000 in student loans and was struggling to make ends meet. She knew something needed to give, so she started looking into refinancing her loans.

Buchanan's experience highlights the importance of budgeting for young adults. According to Citizens Bank branch manager Erica Hughes, developing a strict budget early in life is essential for achieving financial stability. 'It's not just about saving enough for right now, but for the long term,' Hughes says. 'You always have to be forward-thinking when it comes to your budget.'

So, what are the best household budget percentages for young adults? According to Hughes, a good starting point is to allocate 50% of your income towards necessary expenses such as housing, food, and utilities. This leaves 30% for discretionary spending, and 20% for saving and debt repayment.

For those with student loan debt, it's essential to prioritize debt repayment. Buchanan advises making small, additional payments to loans whenever possible. Refinancing may also be an option, especially if you have a high-interest rate or multiple loans with different interest rates.

In addition to budgeting, young adults should also prioritize building credit. Buchanan got a credit card and worked hard on building her credit, which eventually helped her get approved for refinancing her loans.

Creating a successful budget requires discipline and patience. It's essential to track your income and expenses carefully and make adjustments as needed. Buchanan kicked her budgeting game into high gear by creating a monthly budget and faithfully sticking to it.

In conclusion, the best household budget percentages for young adults are 50% for necessary expenses, 30% for discretionary spending, and 20% for saving and debt repayment. By prioritizing debt repayment, building credit, and creating a strict budget, young adults can achieve financial stability and set themselves up for long-term success.

Best household budget percentages new york times