Arizona Tribune - Tips for Young Adults Navigating Their First Budget 

Build your budget based on your income after deductions for taxes, insurance premiums and retirement contributions. If your income varies month to month, use an average.

Separate your needs, wants, and savings

Review your bank and credit card statements from at least the last three months. Categorize your spending into three groups: needs, wants and goals. Needs keep your life going, wants to make it more enjoyable, and savings support your future.

Needs include rent, utilities, groceries, transportation, insurance, debt payments and phone bills. Wants can include dining out, subscriptions to streaming platforms, shopping, hobbies and travel. Savings include building an emergency fund, saving money to purchase a house or planning for retirement

Once you've categorized your expenses, you can begin building your budget. A popular framework is the 50/30/20 method:

• 50% of your paycheck for needs

• 30% for wants

• 20% for savings

Now review your spending and see how close you are to these percentages. You don't need to match them exactly, but use them as a guide to help you see where you can make changes. For example, you might see if you can cut back on takeout in order to save more, or research debt consolidation loans to lower your monthly debt payments.

Use budgeting tools that you find easy to understand and convenient. It could be a budgeting app on your smartphone, a spreadsheet, or even a notebook. Set aside a few minutes every week for a check-in. Review how much came in and went out, and prioritize your upcoming expenses accordingly.

Build an emergency fund

Unforeseen home or vehicle repairs, medical bills or a job loss can quickly become a financial burden.

It may help to keep a small fund aside for emergencies or a period of unemployment. Start with small goals, such as one month of your basic expenses, and build your way up to three. Keep these funds in a separate savings account, rather than your checking account used for everyday spending. Automate transfers to this fund on every payday to keep your saving momentum up.

Plan for debt payments

If you're considering taking out a debt consolidation loan, a personal loan calculator can help you estimate how different loan amounts, interest rates and repayment terms from different providers can affect your monthly costs.