Help! I can't afford my lifestyle...

<div class="user-question">How do I budget for a lifestyle I cannot afford? I am a 22F and attempting to keep up with beauty maintenance has become a matter of choices. I also have plans to keep investing in my ROTH IRA and high yields saving accounts while also making payments on student loans. I got a job in public service for a year making $20,400 with a bonus upon completion. I plan on using that bonus to invest in education, however I get a stipend of this pay over the course of 8 months (really 1 year). I am super unfamiliar with budgeting and sticking to it. I have a planner that I use and I absolutely love it. I also save all of my checks from my part time job because I attempt to track my money, but then when the money hits my account I lose all accountability. Can you please give some words of advice to help shift my mindset to a more money productive but still able to pay for things that I would like?</div>

When I was 22, I was much like you and, truthfully, many other 22-year-olds. I was in a weird transitional period between study and full-time employment, with a taste of real money for the first time, but a lack of experience to make the best use of it. Which is okay!

So let’s give your money some direction ⬇️

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Get acquainted with budgeting

A budget isn’t just a finance thing - it’s a clarity thing. It shows you exactly where your money’s going, so you’re not left guessing or stressing.

Some budgets are detailed and hands-on, others are more flexible - but they all have the same purpose: To keep you aware, accountable, and living within your means. It’s about making sure the essentials are covered, and that your spending actually lines up with your priorities.

1️⃣ Figure out what's coming in

Start with your income - how much you earn and how often.  If it fluctuates, you’ve got two options:

• Average it out over the last few months, or
• Use your lowest reliable amount as a starting point.

This gives you a solid foundation to build the rest on.

2️⃣ Track what’s going out

Next, look at your regular expenses:

• Fixed costs - the same every time (rent, insurance, subscriptions)
• Variable costs - change depending on usage (groceries, power, fuel)

If you're looking for a simple way to track what's going out, Tiller’s budgeting templates are a great place to start - they make it easy to see where your money is going and stay on top of spending.

3️⃣ Work out your surplus

Take your income (Step 1) and subtract:

• Your fixed expenses (Step 2)
• Your best guess at variable spending

What’s left is your surplus - money that you can choose to spend, save, or both.

4️⃣ Use separate accounts

Set up three bank accounts to keep things tidy:

• Bills - for fixed and regular costs
• Spending - your everyday swipe-and-go account

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• Savings - where you stash what you’re keeping for later

<div class="frich-tip">Frich tip: here are some of our favorite accounts to stash your savings in!</div>

When your pay lands, split it up. You’ll know the essentials are covered, and what’s left is yours to enjoy (guilt-free!).

5️⃣ Decide your save vs. spend split

Now that you know your surplus, decide how to divide it. Need more flexibility? Save a smaller amount. Want to hit a savings goal faster? Go bigger.

Just be realistic - too strict, and it won’t stick.

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Find a framework that works for you

Now that you know the basics of budgeting, you can start to build a money management plan that works for how you like to earn and play with your money.

1️⃣ Envelope budgeting

Envelope budgeting is a cash-based system where you divide your income into physical envelopes labeled by category - like groceries, rent, or entertainment - and spend only what’s in each. It helps you stay on budget by making money more tangible and more painful to spend. To use it, plan your monthly budget, withdraw cash, sort it into envelopes, and track spending manually. It’s best for people who prefer hands-on money management and want a clearer connection to their finances.

<div class="frich-tip">Frich tip: check out the free PocketSmith guide on envelope budgeting here!</div>

2️⃣ Reverse budgeting

Reverse budgeting is a simple method where you pay yourself first - setting aside savings as soon as your income arrives, then spending what's left however you like. Unlike traditional budgets, it doesn’t require strict categories; it focuses on consistency in saving and gives you freedom and flexibility with your spending. To implement it, set a savings goal, automate regular transfers to a separate account, and manage the rest of your money for living expenses and lifestyle.

<div class="frich-tip">Frich tip: check out the free PocketSmith guide on reverse budgeting here!</div>

<div class="frich-tip">Frich tip: here are some of our favorite accounts to stash your savings in!</div>

3️⃣ 50/30/20 budget

The 50/30/20 budgeting method is a simple way to manage your money by dividing your after-tax income into three parts: 50% for needs, 30% for wants, and 20% for savings. It’s a flexible framework that teaches you to live within your means, prioritize savings, and spend intentionally. To use it, total your income, apply the percentage split, and adjust your spending to fit those limits. It’s ideal for people starting out with budgeting, or anyone who wants structure without overcomplication.

<div class="frich-tip">Frich tip: check out the free PocketSmith guide on 50/30/20 budgeting here!</div>

4️⃣ Zero-based budgeting

Zero-based budgeting is a method where every dollar of your income is assigned a specific job (spending, saving, or investing) so your budget always balances to zero. Unlike other methods, it starts fresh each month, encouraging you to justify each expense in line with your current goals and needs. To implement it, list your income, allocate funds to all expenses and savings until nothing’s left unassigned, and track your spending closely.

<div class="frich-tip">Frich tip: check out the free PocketSmith guide on zero-based budgeting here!</div>

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Inspect your spending habits

Setting a budget is a great start - but if your spending habits aren’t in check, that budget might just be a fancy plan you keep ignoring.

Once you know how much you’ve got left for spending, take a closer look at where it’s actually going. A quick scan of your bank transactions can be eye-opening.

From there, it’s about making small swaps that align with what really matters - and letting go of the stuff that doesn’t.

If you want to take it a step further and get some global perspective, you can check out PocketSmith’s Global Spending Map, which gives you a look into spending habits around the world.

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Change your money mindset

Your money mindset is shaped by your early experiences with money. If money felt safe and talked about, you’re likely to feel confident. If it was stressful or avoided, that can stick too. These beliefs often guide how we handle money as adults - sometimes without us even knowing.

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1️⃣ Revisit your money origin story

Think back to how money was handled growing up. Was it stressful, scarce, or a source of conflict? These early experiences often shape how we feel about money today - sometimes without us even realizing it.

2️⃣ Turn fear into action

Everyone has financial fears. The key is to channel that fear into small, empowering actions - build a budget, start an emergency fund, contribute to retirement. Taking control shrinks fear.

3️⃣ Create positive money experiences

If money has always felt stressful, bring some joy into the picture. Treat yourself to the occasional coffee or fun fund - guilt-free. Positive moments help rewire your relationship with money.

4️⃣ Watch out for over-restriction

Cutting back too hard can feel like control, but it’s often rooted in fear. If you never let yourself spend, even with a healthy balance, reflect on why. Aim for balance, not deprivation.

5️⃣ Practice gratitude and generosity

Money is emotional. Feel grateful for what you have, and give where you can - even in small ways. Gratitude and generosity help shift your mindset from scarcity to abundance.

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Keep learning and improving

Getting good with money isn’t about knowing everything - it’s about staying curious. The more you explore, the more confident you’ll feel. Here are some resources to get you started:

📚 My favorite books:

• Broke Millennial by Erin Lowry: Specifically written for young adults just starting out with money. Talks about budgeting, debt, investing, and lifestyle inflation in a super non-judgmental way.
• Good With Money by Emma Edwards: A down-to-earth guide for anyone who’s ever felt guilty, overwhelmed, or disconnected from their money. Emma ditches the shame and helps you rebuild your relationship with finances from the ground up.
• Atomic Habits by James Clear: Not a finance book, but incredibly powerful for people who lose accountability once money hits the account. It helps build small, consistent habits that lead to lasting change - like sticking to a budget.

🎧 My favorite podcasts:

• It’s No Secret: Interviews with young professionals navigating money, mindset, and investing. Clear and non-patronizing — great for early-career listeners.
• Money With Katie: Irreverent, funny, and informative. Breaks down Roth IRAs, lifestyle inflation, budgeting hacks, and behavioral finance with a Gen Z/Millennial vibe.
• Get Rich Slow Club: An honest, down-to-earth podcast about building wealth the sustainable way. They break down investing, budgeting, and money mindset in a calm, empowering tone that’s perfect for beginners and slow-and-steady planners.

You can never budget yourself out of a crisis, but you can identify what you really value so you can build some wealth without denying yourself life’s little pleasures. You’ve already done the difficult part by taking an honest look at your budgeting habits and acknowledging that they come up short. Now you can start to pad out your money management toolbelt so you can take action and assemble a financial plan that makes sense to you.

Best of luck! -- Chloe from PocketSmith