{"id":17763,"date":"2026-01-14T16:00:48","date_gmt":"2026-01-14T22:00:48","guid":{"rendered":"https:\/\/www.discover.com\/online-banking\/banking-topics\/?p=17763"},"modified":"2026-02-06T12:17:44","modified_gmt":"2026-02-06T18:17:44","slug":"how-to-budget-on-low-income-20s","status":"publish","type":"post","link":"https:\/\/www.discover.com\/online-banking\/banking-topics\/how-to-budget-on-low-income-20s\/","title":{"rendered":"How to budget money on a low income in your 20s"},"content":{"rendered":"\n

Starting your first job after school can be exciting, but it also ushers in new challenges. One of the biggest hurdles is making sure you can cover all of your bills and living expenses with your entry-level income.<\/p>\n\n\n\n

Taking the time to create a budget can reduce stress and set you up for long-term financial success, says Michela Allocca, founder of the personal finance blog Break Your Budget. Sticking to a budget on a low income in your 20s can get your financial life in order with the right mindset for planning.<\/p>\n\n\n\n

Not sure how to budget money on a low income? Allocca explains what a budget is, why it\u2019s important to have one, and how to stick to one\u2014even on a low income.<\/p>\n\n\n\n

<\/a>Why budgeting for young adults is important (especially on a low income)<\/h2>\n\n\n\n

Creating a budget may not sound like the most exciting way to spend time when you\u2019re young and adventurous. But Allocca says that putting in the work now will make it easier to reach your financial goals and avoid money stress in the future.<\/p>\n\n\n\n

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In short, a budget is a spending plan based on an individual\u2019s income and expenses, Allocca says. \u201cIn its simplest form, it\u2019s how you choose to allocate your funds over a certain period of time,\u201d she says. \u201cIt includes the essential expenses that make up your cost of living, as well as your nonessential expenses such as eating out, entertainment, or travel.\u201d<\/p>\n\n\n\n

Allocca believes having a budget is helpful at any stage of life, but it\u2019s especially important in your 20s. \u201cNot only does it provide direction on where your money is going, but it draws your awareness to what you are spending your money on,\u201d she says. \u201cThis level of awareness makes it possible to nip poor spending habits in the bud early on, as well as ensure the money you are spending is being directed toward things that matter to you.\u201d<\/p>\n\n\n\n

<\/a>How to create a budget that works for you<\/h2>\n\n\n\n

Younger people are often looking to align their spending with their values<\/a>, Allocca says, and creating a budget can make your financial dreams a reality<\/a>. When you\u2019re ready to create a budget<\/a>, Allocca recommends taking the following steps:<\/p>\n\n\n

1. Gather information<\/h4>\n

\u201cFirst, start by bringing awareness to your expenses,\u201d Allocca says. \u201cLook back at how you\u2019ve been spending pre-budget.\u201d She recommends taking a look at your credit and debit card statements from the last three months. From there, you can figure out the categories, based on your monthly expenses, that you\u2019ll need to allocate money to.<\/p>\n\n\n<\/div>\n\n\n

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“Not only does [a budget] provide direction on where your money is going, but it draws your awareness to what you are spending your money on.”<\/p>\n