Make Your Money Work for You: 5 Steps to a Killer Cash Stash

At Optimistic Millennial, we are all about empowering and equipping young adults to become leaders, step into their talents, and contribute to the world. We accomplish this by any means possible. That's why we've asked Bria of Monday Rebel to guest post for you today. She's on a similar mission to help those of us trying to figure out adulthood put our best foot forward. For that, we raise our glass to her. After you've read how to make your money work for you, go check out her website and sign up to get her free materials including "20 Secrets for your 20s" ebook, Career Networking Tips Checklist, 2016 Daily Schedule Printable, and more! Enjoy!


Getting your finances in order is a great incentive to start the new year off on the right foot.

It’s no secret that a lot of 20-somethings (and beyond) aren’t adequately prepared to handle their finances in a responsible way, but there’s no reason why this trend should remain true.

When you form the habit of budgeting your money on a monthly basis, you will see a couple of things happen almost instantly:

  • You will have much more peace about your financial situation. This is not to say you will suddenly receive an influx of money to spare, but you will no longer be worried about paying your Internet bill or feeding yourself. You’ll be able to do both. I know, pretty crazy, right? Understanding where your money is coming from and understanding where it’s going takes a lot of pressure off you. Why? You have fewer decisions to make because they’ve already been made for you. If you’re budgeting your money properly, you no longer will ask yourself if you should grab those new running shoes or get ahead on your student loan payments: the choice has been made in your budget. If you have no money left over for extra expenses (read: Nikes), then you know what the outcome of this scenario is.
  • You will look at your money differently. You may transition from a “poverty mentality” into one of financial freedom and excess. This doesn’t mean you will become materially wealthy; however, your mindset about your cash flow will no longer come from a negative place. A lot of times, it isn’t our lack of funds that keeps us living paycheck to paycheck; it’s the way we view our money. When you take into account everything you must pay for and budget accordingly, you will no longer spend haphazardly and frivolously, and the cash in your wallet or bank account won’t be stretched so tightly.

If you’re intimidated by starting a monthly budget because you’ve failed at maintaining one in the past, don’t stress. This will take only an hour or two out of your day and add many dollars to your savings! To help, I’ve broken it down into just 5 easy steps.

Identify Your Spending Habits

Be honest and kind with yourself in this step. We all know what it’s like to splurge on something we really wanted but didn’t need and sacrificed in an area that we shouldn’t have. If you know you have a tendency to go crazy when it comes to spending, own this. If you don’t, your budget will more than likely end within a week. Once you’ve identified your weaknesses when it comes to money, set up a system of checks and balances for yourself:

  • Tell a friend about your budget; they can help hold you accountable in a moment of weakness. Better yet, encourage them to start a monthly budget of their own.
  • Feel free to reward yourself occasionally. Maybe make some room in your budget (if your income allows) to begin saving up for something special you’ve been admiring. Make sure it’s easily attainable and within a modest price range. No Bentley’s, okay? At the end of the month if you’ve stuck with your budget, use the money you’ve saved to treat yourself. This is a good way to prevent yourself from feeling deprived.

Calculate Your Monthly Income

For most people, this will just be your salary. But for those who have an ongoing side hustle and take in money elsewhere, you’ll want to calculate that in as well.

Additionally, if you make an inconsistent income, simply take an average of your past three month’s income and “guess-timate” your income for this month.

Write Down Your Fixed Expenses and Flexible Expenses

Add up your fixed monthly expenses, but first write them all down. Writing them down will help you to remember even the small items that you may have otherwise forgotten as well as help you see areas where you could cut back. Expenses on this list could include: rent, utilities, car payments, student loan payments, etc. Aim to spend no more than roughly 50% of your total income paying for this category.

Next, add up your flexible monthly expenses such as groceries, shopping, hobbies, gas, etc. Write these down, too. Again, you’re likely to see areas where you’ve been way too extravagant. It may seem odd that I’ve included groceries in this category as I’m sure we can agree that food is a major necessity! However, the amount of money you spend on food fluctuates from month to month as you will sometimes eat out more often one week or instead buy groceries to cook at home for the next week. It doesn’t really matter how much you spend on food; your budget is there to keep you responsible, so just be mindful of going over your allotted amount for this expense. Aim to spend no more than 30% of your income on these items.

Plan Your Financial Goals

It’s important that you budget for your future as well as your present. If you only budget for your current expenses, you will severely limit your ability to grow financially. Your goals for this category can be anything you want, but I recommend including at least one of the following:

  • Get out of debt (pay off student loans, car, credit cards, etc.) Need a how-to guide? Sign up to receive your step-by-step guide here, along with other helpful information on money, life, and adulthood.
  • Build a 3-6 month emergency fund
  • Begin saving for a retirement fund (Yes, it’s entirely plausible for adults in their 20s to save for retirement! Start as early as possible.)
  • Save for a down payment on a house

Whatever you plan to save for, write it down and keep it close, say on your fridge or stuck to your laptop. Seeing your goals (literally) in front of you everyday will constantly remind you what you’re striving for and why your budget is worth it. For these expenses, try budgeting no more than 20% of your total income.

Subtract Your Expenses (Your Goals, Too!) From Your Income

If you get a positive number, this means you have money left over after you’ve taken care of both your fixed and flexible expenses for the month. If you have quite a bit left over, I recommend adjusting your flexible expenses and moving more money to your financial goal budget. In doing so, you could have your student loans or credit cards paid off faster or save up your emergency fund that much sooner. If you have a small amount after the subtraction, you can either leave your budget as is if you’re comfortable or adjust your flexible expenses so that you have more money left over at the end of the month just in case something comes up. It’s your preference.

If you are left with a negative number, it’s time to readjust. Look at your flexible expenses and see what you can eliminate regarding entertainment or dining expenses for example. Another option is to supplement your current income and bring in more cash. Above all, make sure your fixed expenses are being met.

You’ll want to monitor your spending for the first couple of months or so until you feel comfortable budgeting your money. The first few months can be difficult, so don’t get discouraged. You may fail, but dust yourself off and get back at it. To help keep track of your new budget and spending, I recommend adding a money app on your phone. If you’re anything like me, you have your phone on you at all times, so what better way to track your money flow? Personal Capital, Mint, and Pocket Expense Personal Finance are all great options - and they’re all free in the App store! Note: I’m not paid to endorse any of these companies, I just know how helpful it is to have a finance app on my phone that I can check whenever I want.


Author Bio: Bria McKamey is the founder and blogger behind MondayRebel, a lifestyle, career, and educational resource for 20-somethings. MondayRebel is a quickly growing collection of sarcastic life advice and tips for young adults emerging onto the 'live-on-your-own-pay-your-own-bills' scene. Connect with her on Twitter and Instagram.